Golf with Hoover Fellow and Chairman of the President’s Council of Economic Advisers
For those who don’t know, Boskin was Chairman of the President’s Council of Economic Advisers under George HW Bush. He’s currently a senior Fellow at the Hoover Institute and a frequent contributor to the Wall Street Journal. He’s a rock-star in the boring world of economics – so I had fun.
We spent a little time chatting about reading putts and making a good turn through the stroke, but more time talking about how he and Alan Greenspan managed through the savings & loan crisis and the inherent limitations of the government to effectively manage the economy using monetary policy.
Four+ hours with a brilliant economic mind, in the sunshine with a beautiful walk around the Stanford Course, was pretty incomparable. Here’s a quick synopsis of how to fix our current economic malaise (he was also intrigued by a business leader’s perspective on uncertainty, regulation, and challenges operating in our current economy… but I will share what he thought, not me):
1. Transparency – have the Fed signal rate targets, and also publish quarterly their actions in the open markets (will they be reducing the Federal government’s balance sheet, be buying mortgage backed securities, etc). Remove the guessing and game playing that inhibits rational and decisive action by business and investors.
2. Reform Entitlements – peg Social Security benefits (at today’s real levels) to CPI (consumer price increase/inflation) not to wage growth. That alone will make the burden on SS manageable. Also, reform Medicare to a system of premium coverage and not repayment. Fundamentally, keep health care coverage in the private sector but manage to take care of the neediest in our society.
3. Glide Path – set reasonable goals, and longer-term targets to a ‘glide-path’ to recovery. This includes lowering taxes, allowing for a modicum (maybe more than just a tiny bit) of fiscal spending to grow employment. Do it, however, with a long-term goal that is set in stone and requires a super-majority (e.g.. 2/3rds or 3/4ths of Congress ) to change that mandate for a balanced budget. Don’t try to get there over-night (like the tea party wants), as that will be too much of a shock to the system, at a time in the economic cycle when we need stabilization and growth. Also, stick to the path. Don’t let short-term and myopic legislators sacrifice our future for short-term political gain.
4. Consistent, Clear and Fair Taxation – a progressive system is indeed fair (rich should pay more) but remove loopholes and make up a taxation system with only three brackets, like: 10%, 20%, 30%. Also, remove loopholes so that the base is larger and then consequently be able to lower corporate tax rates so that the US is no longer the second highest tax burden in the developed world.
5. Efficiency and Cost Reductions – generally, it’s pretty unnerving to hear just how inefficient the government is from someone who has been on the inside. It’s a reason TARP, HARP, HAMP and the stimulus initiatives all failed; the government is definitionally bureaucratic and slow and poor at innovating, allocating resources and being nimble. For example, by privatizing technology for the Federal government, we can save $1Trillion over the next decade. By consolidating the 48 programs that exist at the Federal level to spur job growth (and i think we just added the 49th, with a new green jobs initiative agency) into one agency led by a job czar we could actually spur education, job retraining, hiring and incentives to businesses to actually hire domestically. Scary when you think that we are moving in the wrong direction, by privatizing healthcare, student lending, the auto-industry and putting significant chunks of the economy at the mercy of people who have never had to look into employees’ eyes and do lay-offs, or hire, or respond to innane regulatory changes.
I have probably messed up the majority of Boskin’s positions (sorry Mike), but incredible interesting to chat and think about ideas… instead of watching from the outside in frustration at what is currently happening in Washington DC.