Yale on the Election and the Economy

http://www.futureofcapitalism.com/2012/11/yale-on-the-election-and-the-economy

Yale University marked the election with a panel discussion moderated by the president of Yale, Richard Levin, about the economy. The one hour, 57 minute YouTube video is here and embedded below. FutureOfCapitalism suffered through it so that you can skip it. It amounted to a four-on-one debate, in which the one participant who took a more free-market approach, Aleh Tsivinski, spoke for a few short moments, while the four participants from left field dominated the discussion. Highlights, or lowlights, depending on how one sees it:

Michael Woodford, the John Bates Clark professor of political economy at Columbia University, at about 31 minutes in, calls Republican proposals to explore a gold standard or audit the Federal Reserve "perverse," and speaks of what he calls "the advantages of allowing neutral technical expertise to be deployed rather than putting it all up for debate in Congress." (What other "complex" government issues than monetary policy, one wonders, would Professor Woodford prefer to remove from Congressional control and place instead in the hands of purportedly neutral technical experts?)

John Geanakoplos, the James Tobin professor of economics at Yale, recommended that the government should have forgiven principal on subprime loans. "We've practiced in Europe and here a kind of fiscal austerity," he said. (Only in the Yale economics department are Obama's trillion dollar-a-year deficits "austerity"!)

William Nordhaus, Sterling Professor of economics at Yale and president-elect of the American Economic Association, said that the United States needs "more, not less fiscal stimulus over the next year or more." He said, "we need fiscal stimulus, not to cut spending." He called (see 1:04 in the video) for a carbon tax and said Congress should allow the Bush-era tax cuts to expire for upper income taxpayers. He said America should also "curb military ambitions and spending."

Robert Shiller, the Arthur M. Okun professor of economics at Yale, mocked Romney economic adviser Kevin Hassett as the co-author of the book Dow 36,000. He called President Obama's proposal of an "American Jobs Act" that would include money to finance infrastructure and hire teachers, firefighters, and policemen, paid for by increasing income taxes by 5% on millionaires, "a great idea." He said it was "a beautiful piece of legislation" that "would have done a lot." "This whole idea that Obama has no plan is really not true," Professor Shiller said.

The most reasonable voice, to my mind, was Professor Tsivinski, who said, briefly, that the candidates should focus on economic growth, which he said would be slowed by debt, taxes, and overregulation. "Maybe we're having too much government," he said.

President Levin hardly spoke at all, but he had made his own views clear in his speech on August 26, 2011, when he declared:

Consider our current economic condition. Since January 2009 it has been clear that there is only one way to prevent a deep and prolonged recession and avoid persistent high unemployment. We needed then, as we need now, a massive fiscal stimulus in the form of direct job creation, not tax cuts. And we needed, at the same time, to make a commitment to reduce the federal budget deficit dramatically over a period of years — not immediately, since that would prolong the recession, but predictably. We finally faced the question of deficit reduction this summer. But the ideological rigidity and parochialism of members of Congress moved the dialogue away from the big picture and paralyzed us with rigid and simplistic formulas — no tax increases, no increase in the debt ceiling, no cuts to Social Security and Medicare.

by Editor  |  Nov 5, 2012 at 11:49 am Related Topics:  Education, Federal Reserve, Politics, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list