WEBVTT - Real Economic Growth Is a 2% Number Going Forward, Gross Says 0:00:00.120 --> 0:00:02.920 Brought you by Bank of America Mary Lynch. Investing in 0:00:03.000 --> 0:00:07.840 local communities, economies and a sustainable future. That's the power 0:00:08.080 --> 0:00:12.360 of global connections, Mary Lynch, Pierce Fenner and Smith Incorporated 0:00:12.760 --> 0:00:26.400 Member s I p C. Welcome to the Bloomberg Surveillance Podcast. 0:00:26.440 --> 0:00:29.920 I'm Tom Keene with David Gura. Daily we bring you 0:00:29.960 --> 0:00:34.800 insight from the best of economics, finance, investment, and international relations. 0:00:35.240 --> 0:00:40.760 Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com, 0:00:40.800 --> 0:00:48.120 and of course on the Bloomberg. Joining us now in 0:00:48.159 --> 0:00:50.599 Paris is Jean flu Crich. He doesn't really need much 0:00:50.600 --> 0:00:53.920 of an introduction. Former ECP President and honorary chairman of 0:00:54.120 --> 0:00:56.480 the Group of Thirty. Also with us in New York 0:00:56.800 --> 0:01:00.000 is Villain Bout, Chief Economist of City, Mr Triche, Well, 0:01:00.000 --> 0:01:02.560 come to the program. Thank you so much for coming on. 0:01:03.160 --> 0:01:05.840 Let's assume that the polls are right. Let's assume that 0:01:05.959 --> 0:01:09.640 so we get something like six for President mccron on Sunday. 0:01:09.959 --> 0:01:13.280 What happened next? What kind of message does the President 0:01:13.400 --> 0:01:17.280 mccorn give to France and Europe. I think, first of all, 0:01:17.680 --> 0:01:21.000 we have to wait for the election. As Mr mccorn 0:01:21.040 --> 0:01:25.000 said himself. Of course it's never done in advance. It's 0:01:25.000 --> 0:01:29.800 not a dumb deal. The polls are very positive and 0:01:30.200 --> 0:01:35.440 I think really that Macon will have probably a very 0:01:35.480 --> 0:01:39.240 powerful mandate to reform the country because it was his own, 0:01:39.400 --> 0:01:44.320 you know view, since he started to engage in politics. 0:01:44.720 --> 0:01:47.120 But fancy that it's a man who was not known 0:01:47.360 --> 0:01:49.840 by the French only two years and a half ago 0:01:50.440 --> 0:01:55.880 and is perhaps the next future president and perhaps we'll 0:01:55.920 --> 0:01:59.600 have a majority according to certain survey and poles that 0:01:59.680 --> 0:02:03.280 we have on the parliamentary election. It is absolutely clear 0:02:03.320 --> 0:02:07.680 that if he has this togument date, he will have 0:02:07.800 --> 0:02:10.440 a majority in the parliament in my view, and then 0:02:10.480 --> 0:02:14.160 of course all kinds of reforms that are overdue in 0:02:14.240 --> 0:02:17.760 France could start. So we'll talk about deficits and budget 0:02:17.800 --> 0:02:20.320 fiscal rules in a second. But why do the French 0:02:20.400 --> 0:02:24.079 not recognize themselves anymore in the old parties in the 0:02:24.440 --> 0:02:29.519 classic right versus left, or they have they become too centrists. 0:02:30.800 --> 0:02:38.560 Well again, the damage that a large deal of public 0:02:38.600 --> 0:02:42.680 spendings on top of the average of the G seven countries, 0:02:42.919 --> 0:02:45.600 on top of the average of the European countries, is 0:02:45.760 --> 0:02:50.160 something which is not considered by a lot of of 0:02:50.200 --> 0:02:55.160 political parties as absolutely negative for friends and for job creation. 0:02:55.720 --> 0:03:00.480 So the debate which we had but between mc and 0:03:00.720 --> 0:03:04.679 marian lpen showed very clearly that Macron was attached to 0:03:04.919 --> 0:03:09.720 sound policies, was attached to finance everything that would be spent, 0:03:10.200 --> 0:03:13.919 and was certainly with the intention of respecting the rules. 0:03:14.400 --> 0:03:17.399 And I trust that it is something which is very important. 0:03:17.880 --> 0:03:20.840 Mr Uche, good morning from New York. As we look 0:03:20.919 --> 0:03:24.160 at this sea change and the culture, the generational change 0:03:24.560 --> 0:03:27.600 in France, can we get a France that's a little 0:03:27.600 --> 0:03:32.480 more fiscally responsible? You and Mr Deutsenberg and ECB had 0:03:32.480 --> 0:03:35.720 to worry about a France that would spend too much money, 0:03:35.720 --> 0:03:38.520 where the government was too big, too big for all 0:03:38.600 --> 0:03:43.040 of France. Can they get more responsible with the President mccron, 0:03:43.680 --> 0:03:45.839 I think so. Frankly speaking, it's a pleasure, of course 0:03:45.880 --> 0:03:48.840 to it to talk to you, I really think so. 0:03:49.040 --> 0:03:53.480 I think that the message that Macon gave was that 0:03:53.560 --> 0:03:57.320 we have to respect the rules. Of course, he's Cody 0:03:57.360 --> 0:04:00.200 Molso for reform, and I think he's right. It's link 0:04:00.240 --> 0:04:02.520 for a Ministo of finance of the AU area. I 0:04:02.640 --> 0:04:05.560 myself and in full agreement with that is coding for 0:04:07.080 --> 0:04:11.280 new reforms as regards also the budget of the euro 0:04:11.400 --> 0:04:15.240 Area that would be created. But respecting the rule, we 0:04:15.280 --> 0:04:18.080 have the stability and both back and it is important 0:04:18.120 --> 0:04:23.760 of course that France applies in his own interests. It 0:04:23.920 --> 0:04:28.160 is not a question of you know, pleasing partners. It's 0:04:28.200 --> 0:04:31.160 a question of being sure that we do all what 0:04:31.240 --> 0:04:35.720 we can to create jobs and and grow. And I 0:04:35.760 --> 0:04:40.719 think that we can be reasonably confident that there has 0:04:40.760 --> 0:04:45.159 been a change in the overall position of public opinion 0:04:45.200 --> 0:04:48.239 in France. But we will see, and nothing is done yet. 0:04:48.760 --> 0:04:52.919 What can we do about a better trade policy for France, 0:04:53.000 --> 0:04:56.039 not only trade with the rest of the continent, but 0:04:56.160 --> 0:04:58.400 trade with the rest of the world, and even I 0:04:58.480 --> 0:05:01.240 may suggest trade with the United in Kingdom. What can 0:05:01.279 --> 0:05:06.840 be a new trade policy for France? Well, as you know, 0:05:06.960 --> 0:05:13.080 the trade policy is influenced by each particular government, of course, 0:05:13.120 --> 0:05:16.000 but is done at the level of the Single Market 0:05:16.160 --> 0:05:19.679 and of the Area and of course the European Union 0:05:19.720 --> 0:05:23.359 as a whole. So from that standpoint, I expect France 0:05:23.760 --> 0:05:28.000 to be open, of course, as was said very very clearly, 0:05:28.400 --> 0:05:31.880 to global trade, and of course you open trade that 0:05:31.960 --> 0:05:36.320 being said, of course, with the appropriate influence for the 0:05:36.440 --> 0:05:39.880 deals to be fair. And it is clearly what what 0:05:40.000 --> 0:05:43.760 has been said. It seems to me very very openly 0:05:43.880 --> 0:05:47.919 and frankly in particular in the debate but also in 0:05:48.000 --> 0:05:52.760 the various declaration of the candidate paper. Right, the reforms 0:05:52.760 --> 0:05:56.080 are strong. But what has changed since alone promised the 0:05:56.120 --> 0:05:59.799 same fiscal rule changes back in is you're really ready 0:05:59.839 --> 0:06:02.200 to sit down at the table and say, you know, 0:06:02.279 --> 0:06:04.440 let's start from scratch and think exactly what we want 0:06:04.480 --> 0:06:08.080 to do on fiscal Well again, we will see exactly 0:06:08.440 --> 0:06:11.240 what is the policy of the new president and of 0:06:11.279 --> 0:06:14.000 the new government, because we will leve also a government, 0:06:14.000 --> 0:06:16.039 so a lot of things have to be done. What 0:06:16.279 --> 0:06:19.480 is clear is that there is a very very powerful 0:06:19.640 --> 0:06:24.080 will on the side of the new possible French government 0:06:24.080 --> 0:06:27.080 and president, and on the side of the German partners 0:06:27.160 --> 0:06:30.720 also and the other partners in Europe to discuss and 0:06:30.960 --> 0:06:34.919 not to discuss our need to settle the present, but 0:06:35.080 --> 0:06:37.440 also to have a view of the future and of 0:06:37.560 --> 0:06:40.360 the reform that are at stake and of the new 0:06:40.440 --> 0:06:43.760 course of action for Europe as a whole. So from 0:06:43.800 --> 0:06:47.400 that standpoint, I think that we are in circumstances that 0:06:47.440 --> 0:06:50.600 are probably the best since quite a long period of time, 0:06:50.839 --> 0:06:53.719 because you remember at the very beginning of the Alarmed 0:06:54.080 --> 0:06:59.000 Mandate there was not not such a close relationship potentially 0:06:59.040 --> 0:07:02.280 close relationship beween Germany and France and the other partners. Well, 0:07:02.360 --> 0:07:04.359 let me bring in our partner from the Netherlands with 0:07:04.480 --> 0:07:08.520 us Jan Clauche today, Folks is Villain Pouder. He is 0:07:08.560 --> 0:07:10.840 professor of the London School of Economics and the course 0:07:10.880 --> 0:07:14.200 head of all economics at City Group. Professor. Question from 0:07:14.280 --> 0:07:19.880 Mr Trichet, Please yes, Tricia, France still spends well over 0:07:20.040 --> 0:07:24.800 fifty GDP in the public sector. With all the talk 0:07:24.840 --> 0:07:28.440 about pension former Raby market reform, that number has to 0:07:28.520 --> 0:07:33.200 get much closer to for France to become a dynamic economy. 0:07:33.360 --> 0:07:35.680 Do you see any chance that there will be a 0:07:35.680 --> 0:07:39.360 coalition in France that will not be frustrated by the 0:07:39.400 --> 0:07:43.560 losers of such a drastic reduction desized the public sector. 0:07:44.040 --> 0:07:47.840 Is there any hope that the France will not look 0:07:47.920 --> 0:07:50.720 like Scandinavia and the public spending but more like the 0:07:50.720 --> 0:07:55.160 Euro Area average. Well, we again, I think that you're 0:07:55.200 --> 0:07:58.920 absolutely right. This is one of the dimension of reform 0:07:58.960 --> 0:08:01.840 which is very important. Diminished the public spendings and the 0:08:01.840 --> 0:08:05.320 proportion of GDP, which are much higher than the average. 0:08:05.800 --> 0:08:09.000 And second we have also these structural reforms and the 0:08:09.080 --> 0:08:13.840 liberal market appropriate reform, and we also have the cost 0:08:13.880 --> 0:08:16.640 competitiveness of the country, of course, of the economy. But 0:08:16.760 --> 0:08:20.280 on the first point, I think that this idea that 0:08:20.360 --> 0:08:24.120 it is of course a progressive march in the direction 0:08:24.240 --> 0:08:28.280 of diminishing public spendings and the proportion of GDP, as Sweden, 0:08:28.680 --> 0:08:32.360 for instance, did a number of countries proved that it 0:08:32.440 --> 0:08:35.920 was possible. Of course, it cannot be done overnight. But 0:08:36.080 --> 0:08:42.120 the winners in such an orientation are the unemployed, because 0:08:42.240 --> 0:08:45.560 it's absolutely clear that the weight of this uh public 0:08:45.600 --> 0:08:50.160 spendings is much too high and hamper the appropriate competitiveness 0:08:50.160 --> 0:08:52.840 of the economy. So the winners will be the unemployed, 0:08:53.480 --> 0:08:57.480 young people and also all the unemployed in France. Thank 0:08:57.480 --> 0:09:00.560 you so much for now the former recently Prince angel 0:09:00.640 --> 0:09:17.000 and Bowker, Bloomberg, Surveillance, David Gerr and Tom Keene. Of course, 0:09:17.080 --> 0:09:19.720 much to talk about here. Jim Glassman and Bill gross 0:09:19.720 --> 0:09:22.719 will join us, and always Alan Krueger joins us from 0:09:22.760 --> 0:09:26.439 Princeton University, and Alan, we must take a moment on 0:09:26.520 --> 0:09:29.800 the passing UH in the last day. The death of 0:09:30.120 --> 0:09:36.400 William Bauma of Princeton University absolutely definitive, the giant of 0:09:36.520 --> 0:09:41.000 what I would call entrepreneurial economics. His book, his textbook 0:09:41.040 --> 0:09:45.839 with Alan Blinder, is truly classic. Uh. What did he 0:09:46.000 --> 0:09:50.240 mean for the students of Princeton University. I was mesmerized 0:09:50.600 --> 0:09:54.559 at how gentle and yet how distinct in assertive his 0:09:54.720 --> 0:09:59.200 lecturing was well. Obama was a giant in the field 0:09:59.240 --> 0:10:02.719 of economics, and he was truly a renaissance man. He 0:10:02.840 --> 0:10:06.599 was five years old. He moved at the end of 0:10:06.679 --> 0:10:08.959 his career from Princeton to n y U. So it's 0:10:09.000 --> 0:10:13.599 more a loss for the Yuan. That's true for n 0:10:13.720 --> 0:10:17.439 y U. But he is forever associated with your in. 0:10:19.120 --> 0:10:22.040 He was Uh. He was at Princeton forty two years. 0:10:22.320 --> 0:10:26.319 I interviewed him tom in two thousand one UM in 0:10:26.400 --> 0:10:29.520 the Journal of Economic Perspectives, which I tweeted out yesterday 0:10:29.679 --> 0:10:31.400 in case people wanted to read. He was truly a 0:10:31.440 --> 0:10:36.160 remarkable man, remarkable career, made lasting contributions to economics. I 0:10:36.320 --> 0:10:39.199 was inspired by his words. A humility was wonderful. He 0:10:39.360 --> 0:10:42.400 was a master student at LSC and Lionel Robbins. I 0:10:42.480 --> 0:10:44.720 believe I may be wrong in this, but I believe 0:10:44.760 --> 0:10:48.840 the story is Robbins, the giant of Elisi, personally intervened 0:10:49.120 --> 0:10:52.240 to make him a PhD candidate. He was so good 0:10:52.440 --> 0:10:56.400 at speaking well. In this interview he told that story 0:10:56.440 --> 0:10:58.559 where he first applied and they had never heard of 0:10:58.600 --> 0:11:01.120 City College. So he was turned down, and he applied 0:11:01.120 --> 0:11:03.520 a second time and Ladle Robbins intervened. He said, this 0:11:03.600 --> 0:11:05.559 man really wants to come here, and the end of 0:11:05.640 --> 0:11:07.959 three weeks they had him joined the faculty. Yeah. I 0:11:08.040 --> 0:11:11.200 mean that was the giant sense of it. His spirit 0:11:11.280 --> 0:11:13.000 to me, and there's so many things, but almost cost 0:11:13.080 --> 0:11:16.480 disease and the rest of it, and works Tobin and others. 0:11:16.600 --> 0:11:21.240 To me, it was his fearlessness about don't forget the entrepreneur, 0:11:21.600 --> 0:11:25.000 which dovetails into your work on labor economics. How did 0:11:25.040 --> 0:11:30.400 he describe where the entrepreneur fits in to price and firm? Well, 0:11:30.720 --> 0:11:34.400 his contributions and industrial organization, I think we're quite significant. 0:11:34.760 --> 0:11:36.920 The work he did on contestable markets where you have 0:11:37.000 --> 0:11:41.120 a natural monopoly, yet you still want government regulation so 0:11:41.240 --> 0:11:44.840 that you have the degree of competition that's optimal um 0:11:45.320 --> 0:11:50.440 and that enabled I think many many firms to develop 0:11:50.520 --> 0:11:54.000 new technology because often the technology was the barrier to entry. 0:11:54.840 --> 0:11:57.800 He worked on ways for firms to collaborate on R 0:11:57.880 --> 0:12:04.199 and D without colluding, uh to um monopolize the market. UM. So, 0:12:04.360 --> 0:12:07.400 I think every American is benefiting from the work that 0:12:07.520 --> 0:12:10.520 he did. The work he did on cost disease, which 0:12:10.520 --> 0:12:12.800 you mentioned is relevant today for healthcare reform. You know 0:12:12.920 --> 0:12:15.400 he was involved in in the mid nineties and the 0:12:15.440 --> 0:12:18.760 Clinton health care effort, and he explained that the reason 0:12:18.800 --> 0:12:21.280 why healthcare costs are growing so quickly is that there's 0:12:21.320 --> 0:12:25.679 been faster productivity growth outside of healthcare. UH. And when 0:12:25.760 --> 0:12:28.439 impact of his model or implication of his model is 0:12:28.480 --> 0:12:30.760 that the government services that are provided, which tend to 0:12:30.800 --> 0:12:33.240 have slower productivity growth, are going to become more costly 0:12:33.320 --> 0:12:38.079 over time. William Bauma did, of course speak soon to 0:12:38.200 --> 0:12:41.679 Alan Blinder of Princeton, who was so associated with a 0:12:41.800 --> 0:12:46.400 professor Obama's effort and education Alan Krueger very quickly here 0:12:46.679 --> 0:12:51.480 Obamacare trump Care. Does it matter to our listeners? Well, 0:12:51.520 --> 0:12:54.240 I think it matters to all Americans. Certainly matters to 0:12:54.320 --> 0:12:56.959 the twenty four million Americans who would lose their health 0:12:57.040 --> 0:12:59.800 insurance under the bill that passed the House yesterday. But 0:12:59.880 --> 0:13:02.480 it matters, uh to everyone else, because it will affect 0:13:02.520 --> 0:13:06.160 our costs um And you know, the estimates are for 0:13:06.480 --> 0:13:09.160 a large number of Americans the net cost of health 0:13:09.200 --> 0:13:11.719 insurance would be situately higher under this bill. Do you 0:13:11.800 --> 0:13:14.520 presume on first blush that the CBO scoring will be 0:13:14.640 --> 0:13:18.440 remarkably like the previous CBO scoring. I don't see how 0:13:18.480 --> 0:13:20.280 it could be all that different, and what I understand 0:13:20.320 --> 0:13:23.079 that the bill they're quite similar. Yeah, let's come back 0:13:23.120 --> 0:13:25.000 Alan Krueger with us. Thank you so much for those 0:13:25.040 --> 0:13:28.920 comments on Professor Bama. That's one of those special things 0:13:28.960 --> 0:13:32.440 about surveillance, folks, is our guest quality is so good 0:13:32.480 --> 0:13:37.000 that when someone dies within the realm of economics, financial investment, 0:13:37.040 --> 0:13:39.839 it's amazing the perspective we hope to deliver to you 0:13:39.920 --> 0:13:43.240 when we hear uh this news. If you have kids, 0:13:43.600 --> 0:13:46.400 this is the most important conversation of the day. Alan 0:13:46.440 --> 0:13:50.319 Krueger is at Princeton University and he has been eclectic 0:13:50.440 --> 0:13:54.000 writing on terrorism, has acclaim with David Carter on the 0:13:54.080 --> 0:13:57.160 minimum wage, and Professor Krueger. Here's a single sentence. I 0:13:57.280 --> 0:13:59.920 take it from Jeff go over to the Washington Poe 0:14:00.160 --> 0:14:05.160 Professor Krueger finds of male prime age labor force dropouts 0:14:05.559 --> 0:14:08.800 say they took pain medication the day prior. Your work 0:14:08.880 --> 0:14:11.839 on opioid is not a lot of political broather. It 0:14:12.000 --> 0:14:16.239 is careful and accurate analysis of the drugs and dropouts 0:14:16.559 --> 0:14:20.040 in America. What's the policy prescription to get us away 0:14:20.120 --> 0:14:23.760 from heroin and the opioids that are destroying so much, 0:14:23.840 --> 0:14:27.720 particularly of the Midwest. First of all, I think I 0:14:27.800 --> 0:14:29.920 might use that as a title for a paper that 0:14:30.000 --> 0:14:34.840 I'm writing, Dropouts. We'll take the surveillance royalty from that place. 0:14:35.880 --> 0:14:39.800 Brookings will hand that right over to you. Um. You know, 0:14:39.880 --> 0:14:42.120 there's not an easy answer. There are I think many 0:14:42.160 --> 0:14:45.120 components the answer. The first is to prevent the problem 0:14:45.160 --> 0:14:47.600 in the first place. And if we could keep people 0:14:47.600 --> 0:14:49.560 in the labor force, that we can keep them engaged. 0:14:49.640 --> 0:14:51.720 If we can keep the unemployed searching for a job, 0:14:51.800 --> 0:14:54.760 If we can help those who are on the margins 0:14:54.760 --> 0:14:57.320 of the labor market to even volunteer so that they 0:14:57.840 --> 0:15:01.480 are learning new skills and staying engaged than networking, I 0:15:01.560 --> 0:15:04.560 think that's one important step to prevent the problem from 0:15:04.600 --> 0:15:08.400 growing where the problem exists, especially for those who are 0:15:08.400 --> 0:15:13.400 on disability insurance and receiving medicare. Something like forty of 0:15:13.560 --> 0:15:16.640 them receive opioid prescriptions during the course of the year. 0:15:17.440 --> 0:15:19.600 I think we need to use rehabilitation, we need to 0:15:19.680 --> 0:15:23.280 use treatment, We need physical therapy. But the jobs do 0:15:23.600 --> 0:15:26.840 you have in your history going to Lynden, Lyndon, Maines, Johnson, 0:15:27.400 --> 0:15:30.800 frank and Dolor, Roosevelt and others. Is there a incentive 0:15:30.880 --> 0:15:37.160 prescription to create investment for lower education goods producing jobs 0:15:37.440 --> 0:15:39.840 in America. They're not going to go to Princeton. They're 0:15:39.880 --> 0:15:43.000 not gonna work for pick your accounting firm or legal firm. 0:15:43.160 --> 0:15:45.360 They're not going to do radio here in New York. 0:15:45.840 --> 0:15:49.080 Where does that policy prescription come to help people in 0:15:49.200 --> 0:15:54.000 West Virginia, Ohio, Kentucky and westward. This is why it's 0:15:54.040 --> 0:15:57.040 a tragedy. We weren't able to invest more in infrastructure 0:15:57.080 --> 0:15:59.440 in America. We need to rebuild our roads and our 0:15:59.480 --> 0:16:02.920 highways bridges. President Obama tried for eight years to ramp 0:16:03.040 --> 0:16:06.720 up in and I wish him luck and succeeding in 0:16:06.760 --> 0:16:08.480 that because I think that will help our country and 0:16:08.560 --> 0:16:12.120 I think it will improve our competitiveness in the future. 0:16:12.240 --> 0:16:15.240 And just as importantly, help this demographic that you're discussing. 0:16:15.840 --> 0:16:17.640 When you when you look at the field of economics 0:16:17.680 --> 0:16:21.480 and the field of policy today, make a Venn diagram 0:16:21.560 --> 0:16:24.080 of politics and policy, how much crossover is there? Having 0:16:24.160 --> 0:16:26.960 gone through this fight recently here over healthcare reform, you 0:16:27.040 --> 0:16:30.160 talked to doctors, you talk to people in health insurance, 0:16:30.160 --> 0:16:33.760 talk to people at health companies, healthcare companies. There's a 0:16:33.800 --> 0:16:36.280 sense that policy isn't driving it. How do you get 0:16:36.320 --> 0:16:38.680 back to a point where the conversation in Washington is 0:16:38.760 --> 0:16:40.880 less focused on the politics and more on the policy. 0:16:41.200 --> 0:16:43.800 Well today, the overlap in the Venn diagrams is an 0:16:43.840 --> 0:16:46.400 old set. And I once went back and I went 0:16:46.440 --> 0:16:48.000 through all of the issues I worked on when I 0:16:48.040 --> 0:16:50.680 worked for President Obama, and I reviewed what evidence did 0:16:50.760 --> 0:16:52.960 we look at, what type of evidence was it relevant? 0:16:53.440 --> 0:16:57.600 And it was quite an impressive list. The current administration 0:16:57.720 --> 0:17:01.200 seems to be intimidated by experts. Experts aren't always right, 0:17:01.240 --> 0:17:03.560 but I think we do have something to add. I 0:17:03.600 --> 0:17:06.840 think it's unfortunate the way that President Trump has criticized 0:17:07.119 --> 0:17:12.560 federal statistics. The impartial civil servants who toil away earned 0:17:12.720 --> 0:17:15.000 too little. In my view, they're overworked. In my view, 0:17:15.359 --> 0:17:18.600 they do the best job they can. Yet attacking the 0:17:18.720 --> 0:17:23.560 unemployment rate, um other economic measures I think is very 0:17:23.640 --> 0:17:29.120 counterproductive and I think it's uh symbolic of the disdain 0:17:29.760 --> 0:17:33.359 for using evidence and policy development. Thomas a very important 0:17:33.400 --> 0:17:35.560 question about young people and drug addiction. How about just 0:17:35.960 --> 0:17:39.320 stepping back from that more broadly, Uh, you teach you 0:17:39.359 --> 0:17:42.160 to college, you you interact with a lot of young people. 0:17:42.160 --> 0:17:44.720 How does the labor market look for the young men 0:17:44.800 --> 0:17:46.600 and women who will be graduating school here over these 0:17:46.640 --> 0:17:49.399 next few weeks. I think the job market has clearly 0:17:49.480 --> 0:17:51.840 picked up over the last seven years, and I think 0:17:51.880 --> 0:17:55.000 we're seeing many manifestations of that. One is that more 0:17:55.080 --> 0:17:57.119 students are going directly to work instead of on too 0:17:57.160 --> 0:18:01.280 graduate school. Uh. First. For older workers, however, I think 0:18:01.280 --> 0:18:04.520 they're still struggling. And where we're seeing I think, uh 0:18:05.240 --> 0:18:09.639 tremendous difficulty are workers in their fifties early sixties who 0:18:09.680 --> 0:18:11.879 lose a job and they're finding a lot of difficulty 0:18:11.920 --> 0:18:15.560 getting a W two traditional job. And many of them 0:18:15.600 --> 0:18:18.680 are hanging up their own shingle, which can have some benefits, 0:18:19.000 --> 0:18:21.879 but they're not necessarily prepared for being their own boss. 0:18:22.640 --> 0:18:25.760 In hindsight, when you look at tax revenue as a 0:18:25.880 --> 0:18:29.159 percentage GDP. And let's not get carried away. It's the 0:18:29.320 --> 0:18:32.800 chart is clear, folks, it's elevated, but not that much. 0:18:33.840 --> 0:18:37.680 We're taxes raised too much within the era of Obama. 0:18:38.200 --> 0:18:41.840 Could they tweak it a little bit lower? Well, you know, 0:18:42.640 --> 0:18:45.359 I think taxes should be as low as possible, but 0:18:46.119 --> 0:18:48.640 high enough to pay for the services that the public demands. 0:18:49.160 --> 0:18:51.440 And the public demands a lot of services. But trend. 0:18:51.520 --> 0:18:54.359 If I'm a Republican sitting here like the two congressmen 0:18:54.400 --> 0:18:57.760 I interviewed in Washington, the fact of the matter is, Professor, 0:18:57.840 --> 0:19:00.720 we're off trend. We're We're right, we're elevan needed were 0:19:01.240 --> 0:19:03.720 We're certainly not in an outlier position to create to 0:19:03.760 --> 0:19:05.920 our history. And Tom, the proof of the pudding is 0:19:05.960 --> 0:19:08.320 in the economic recovery. You know, people said that the 0:19:08.359 --> 0:19:11.240 tax increases, that Obamacare would destroy jobs. Well what about 0:19:11.280 --> 0:19:13.359 those fifteen and a half million jobs that were created 0:19:13.400 --> 0:19:18.399 over the last taxes to create more jobs? Saying I 0:19:18.600 --> 0:19:21.160 get get Mike, can you get Mike red Hat please 0:19:21.280 --> 0:19:23.480 bring it in here, you know. But by the way, Tom, 0:19:23.520 --> 0:19:25.640 I fought for years for corporate tax reform. I think 0:19:25.680 --> 0:19:28.879 our corporate tax system is very uh inefficient. So can 0:19:28.960 --> 0:19:31.960 we say that Krueger and Trump are on common ground here? Well, 0:19:32.200 --> 0:19:33.920 I think we're in common around and that we say 0:19:33.960 --> 0:19:36.119 that we should have corporate tax reform. Now, the nature 0:19:36.160 --> 0:19:38.200 of the reform is a bit different, and I think 0:19:38.240 --> 0:19:42.280 we can reform our system and remain revenue neutral. What 0:19:42.400 --> 0:19:45.080 did you make of the one pager, as it's called, 0:19:45.160 --> 0:19:48.520 the White House handed out after a hundred days in office, 0:19:48.600 --> 0:19:51.440 the plan the principles for tax reform. Uh. You know, 0:19:51.520 --> 0:19:54.040 you say there's this commonality of you and the administration 0:19:54.080 --> 0:19:55.760 being in favor of corporate taxes from did you see 0:19:55.760 --> 0:19:58.639 anything in the detail? I'm not gonna say it with 0:19:58.680 --> 0:20:01.840 granular detail in the detail that sheet where you think 0:20:01.920 --> 0:20:04.520 that the administration has head in the right direction? Look, 0:20:04.600 --> 0:20:07.040 that was rushed out, and I felt sorry for the 0:20:07.600 --> 0:20:13.480 professional career employees at the Treasury Department. Um, it's not 0:20:13.640 --> 0:20:16.760 the type of work product they're accustomed to producing. UM. 0:20:17.280 --> 0:20:20.200 I think, Uh, the idea of lowering the corporate tax 0:20:20.320 --> 0:20:23.320 rate and getting rid of some of the preferences that 0:20:23.400 --> 0:20:25.440 we have to pay for that, I think that makes 0:20:25.440 --> 0:20:29.040 a lot of sense. Tax rate for past through companies 0:20:29.080 --> 0:20:33.960 I think would be extremely abused. So I had a 0:20:34.000 --> 0:20:37.240 lot of concerns. Um, there were no budget numbers that 0:20:37.359 --> 0:20:40.160 came along with the proposal, which is which is kind 0:20:40.160 --> 0:20:43.840 of remarkable. Um, how is one supposed to consider a 0:20:43.920 --> 0:20:47.960 proposal which would probably, you know, add trillions and trillions 0:20:48.000 --> 0:20:51.040 of dollars to the deficit without having the administration do 0:20:51.160 --> 0:20:52.960 that type of analysis. I don't know how they could 0:20:53.000 --> 0:20:56.800 in good faith say that this is their proposal, that 0:20:56.840 --> 0:20:59.119 they haven't done that type of analysis. And if they 0:20:59.160 --> 0:21:01.040 did that type of an elsis, why wouldn't they share 0:21:01.040 --> 0:21:03.119 it with the American people so we could evaluate it. 0:21:03.600 --> 0:21:05.000 Let me get back here to job stay in the 0:21:05.160 --> 0:21:07.200 last couple of minutes we have with you. I spoke 0:21:07.240 --> 0:21:09.040 with the Secretary of Commerce Earliver this week, and he 0:21:09.160 --> 0:21:12.399 was very proud to talk about the efforts the administration 0:21:12.520 --> 0:21:15.400 is working on when it comes to training. Going back 0:21:15.400 --> 0:21:17.320 to that meeting with Chancellor Lamerko when she was at 0:21:17.320 --> 0:21:19.480 the White House, the trip that Devanka Trump, daughter and 0:21:19.520 --> 0:21:21.680 advisor to the President, took to Germany to meet with 0:21:22.119 --> 0:21:24.920 German executives to see how they train workers and keep 0:21:24.960 --> 0:21:27.800 workers at those companies. Is that a step in the 0:21:27.920 --> 0:21:30.040 right direction? Do you think what's been the biggest hurdle 0:21:30.119 --> 0:21:33.679 to getting training programs built into our corporate structures here 0:21:33.720 --> 0:21:35.960 in the U s. As they are in Germany. I 0:21:36.040 --> 0:21:37.760 think it is a step in the right direction, But 0:21:37.920 --> 0:21:40.879 Germany also mandates that companies spend a certain share of 0:21:40.920 --> 0:21:43.160 their budget on training, and I don't see the current 0:21:43.160 --> 0:21:46.480 administration interested in that type of an idea. Also, in 0:21:46.520 --> 0:21:49.920 the president's budget outline wasn't really a budget proposal. He 0:21:50.040 --> 0:21:53.320 cuts job training. So I think there are many things 0:21:53.359 --> 0:21:55.160 we can do. I would like to see a much 0:21:55.240 --> 0:21:59.680 better school to work training program where students who are 0:21:59.840 --> 0:22:01.840 not at the time college bound they might be college 0:22:01.880 --> 0:22:05.399 bound later on, can apprentice with companies, can learn skills 0:22:05.440 --> 0:22:07.800 while they're going to school. I think that strengthens both 0:22:07.840 --> 0:22:10.520 their school work and their ability to navigate the job market. 0:22:11.600 --> 0:22:14.080 Alan Krueger, thank you so much, particularly for those kind 0:22:14.200 --> 0:22:17.919 comments on his colleague at Princeton, William BAUMO now at 0:22:17.960 --> 0:22:29.640 New York University. Uh uh. This day brought you by 0:22:29.920 --> 0:22:33.600 Bank of America Mary Lynch, dedicated to bringing our clients 0:22:33.720 --> 0:22:37.840 insights and solutions to meet the challenges of a transforming world. 0:22:38.359 --> 0:22:42.200 That's the power of global connections. Mary Lynch Pierce Federan 0:22:42.280 --> 0:22:51.800 Smith Incorporated Member s I p C. There's something new 0:22:51.880 --> 0:22:55.239 from Bloomberg. It's called Lens. 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Learn more at Bloomberg dot com, slash lens, 0:23:42.800 --> 0:23:46.639 Chip Lastsman of Northwestern and JP Morgan with us today. 0:23:46.920 --> 0:23:50.600 We're just speaking with Alan Krueger about the death of 0:23:50.720 --> 0:23:54.960 William Boma of Princeton University in New York University and 0:23:55.080 --> 0:23:58.960 his professor. Krueger. Of course, Riley mentioned his work is 0:23:59.119 --> 0:24:02.320 front and center in your work and Frankie, the work 0:24:02.359 --> 0:24:06.560 of every politician in Washington on healthcare. It's called bombs, 0:24:06.840 --> 0:24:10.920