You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well earlier today, Fed Bank of Minneapolis President Nel cush car he made some comments. He talks about two interest rate increases this year to counter risk posed by inflation. I mean, we're talking so much about what comes next in terms of our economy and our next guest definitely talks a lot about and thinks about our economic future. He's Glenn Hubbard.
He's d d emeritus and professor of Finance and Economics at Columbia Business School. Former chairman of the U S Council of Economic Advisors that was under President George W. Bush. Serves on the boards of a DP, Black Rock, MetLife. He's done a lot, does a lot, including writing a new book. It's out later this month. It's called The Wall and the Bridge, Fear and Opportunity in Disruptions Wake. We're so delighted to have Glenn Hubbard joining us on
the phone from New York City. Dean Hubbard, UM, nice to have you here with us. How are you and happy New Year? Great? Thanks? I hope you're having a good new year's so far, so far, so good, and we want to get into your book, but we feel like it relates to so much of what we try to figure out, what comes next, what should come next. I love to just get your thoughts about today's economic environment. What you think is ahead. Well, it's a great question.
I think in two tracks, you know, in the here and now. The inflation concerns I think are real. I think monetary policy has been behind the curve, and we've spent probably too much time on demand and not enough time on getting supply chains right and supply right. So I think that can still sort itself out. But it's it's definitely a worry. I worry, you know, the sort of the theme in the book as well, that there's some slower moving things that are even more dangerous for
our economy. Big positive changes in technology and globalization that leave many of us quite much better off, but makes some of us worse off in our politics and our economics are effected. So the question is, Dean Hubbard, what are the solutions that you propose to tackle some of these big picture challenges that, by the way, are are much bigger than what we think about. With the omicron
variant or even getting beyond this pandemic. I mean, the genesis of this goes back to before President Trump was elected. Oh sure, we're thinking about decades of change that again have been largely positive for the American economy. We all celebrate technological advance and globalization, but for many individuals in many communities, the news has not been so positive. You know, Chances are what anyone listening to this toke con one
oh one. I hope they liked the course and their professor probably said something like, you know, technological advance, trade makes us better off, and then probably mumbled something because the gainers can compensate the losers. The problem is we
haven't been doing that. And you asked the both solutions, and I think they're big, bold things we can do to to build bridges to people compete in the world, which would be everything from bold support for community colleges and training, uh, support for low wage work in the country, and most importantly, an attitude shift in Washington and in the economics profession that notices these things. It goes all the way back to what Adam Smith would have taught us,
founder of economics. We really really need to help people compete. Well, it's interesting. First of all, music to our ears. I have a degree in economics. I went to Barnard College, worked actually at the business school. Tim has an NBA from Columbia Business School and was there when you were dean. That's why I have to call you dean. I can't even call you. So we're we're all in on this,
you know. I do think about some of the gaps and divisions that we have in our society, certainly um exacerbated by the pandemic, but you know, innovation embracing it. Like not everybody has been able to benefit by all the disruption and innovation out there. Your ideas and what you write about in this book about bridges versus walls, How can that help more people benefit in our society and our economy? Another great question. Here's the problem. Walls
are very seductive. They're very seductive for politicians to tell people I'm going to protect you. I'm going to protect you from trade, or from immigration, or from technological advance. But they the flip side of a wall is I'm also protecting you from all the good things that come from all of that. The right answer to the wall isn't what economists often talk about which is just let the market rip the kind of loss affair, if you will.
The right answer is building bridges. And I think if we focus on a preparing people to compete in the world that is and will be, and reconnect them when they fall out of the economic boat, that's important. You know. Classical economists like Smith always felt that the goal of an economy is mass flourish, is everyone participating. That should be our moral and our economic imperative. We're going to push back on the wall, Dean Hubbard. We just haven't been a minute and a half, and then we'll do
some more news and come back some more. But you know we're talking about you know you do in your book about building bridges. Who best builds those bridges that we need today? Is it politicians? Is a corporate leaders? Who is it? I think it's all of the above. Business leaders have to understand that social support for the system, meaning market capitalism, isn't a given, and business leaders need
to acknowledge that and pitch in. In the book, I talk about examples, UH like George Eastman, of business leaders who built entire communities, UH, largely for their own business, but also to help others. Government needs to begin by just noticing the problem and looking at what worked in the past, like the land grant colleges or the g I Bill. So it's really all of the above. Is there the political will to get that done in Washington, though, Well, the sheep answer would be to say no. But I
say yes. And the reason I say yes is we're having a sterile debate over capitalism versus socialism as opposed to solving people's problems. There is a huge opportunity for a leader, be he or she a Democrat or Republican, to come in and say, you know what, I can make people in communities better off. That's a winner. Dean Hubbard,
good to have you back with us. In the first chapter, you write about a standing room on the event at Columbia Business School just five days ahead of the election of sen I was actually in that room back in You did that event with Professor Ray Horton, who was teaching modern political economy for years. I was in that class also, And this was all at a time when I think a lot of people in hindsight would say that President Trump five days later really surprised a lot
of Americans by being elected. I'm wondering though, because you write that you kind of saw this coming, uh, and a lot of people kind of saw this coming. And the way that the whole portion of the American popular elation was disenfranchised due to globalization. What is the what is the way for us to move forward from that? What is the way to re enfranchise those people? It's an excellent question. I think the issue is to notice
the problem. You know, I can't claim to have predicted President Trump's electoral success, but I do think the slow moving disenfranchisement of many Americans and communities had slipped off the radar screen of many business leaders, many politicians, and dare I say it, even many economists. You know, there's a famous question the Queen of England asked the London School of Economics about the financial crisis? Why did nobody see it coming? And you might ask the same question here.
So I do think we need a new attitude to it among economists and in Washington, to notice, to push, and to come up with real solutions. How has the pandemic You're already writing this book and you note that um and then the pandemic hit. How has that impacted your thinking? And you're writing, well, the pandemic, of course, you know, makes it clear that there's not one single labor market. There's some individuals who use technology to work at home. There are many Americans for whom that's not
a real possibility. And not just the pandemic today, but the future. From artificial intelligence and machine learning to the adaptation of the economy to fight climate change, these are all things that suggest really big structural shifts about to happen, and we really need to get ahead of them in a way we didn't get ahead of earlier technological changes or globalization. You know, we talk a lot about incentives, and we talked about market incentives. We learn a lot
about incentives in business school. And I'm wondering what the incentives are for policymakers to actually make these types of changes, because I think many people could argue that a lot of them look short term, right, two years an election cycle, six years perhaps, or four years for presidents. What are the incentives here for for policymakers. Well, I think many policymakers think this is all just too hard to do. It's easier just to throw out words like let's build
a wall. The problem with that is it's not too hard to do. In the middle of the Civil War, Abraham Lincoln launched the Land Grant, Colleges, Homestead Act, Transcontinental Railroad. I think that was a pretty tough time for decision making. Is World War two was coming to close. We certainly did the g I built for welcoming service people coming home,
so we can do this. I think a politician who figures out that these sort of structural fixes actually help a lot of people probably finds political goal, not just economical. You have a great line in your book. An overarching lesson for economic policy is the greater the benefits of disruption from openness, the more gainers should compensate losers. Because disruption innovation, right, we certainly don't want to stop it.
It has created some incredible things, but people, industry, things are impacted people, individuals, right, and we need to not just ignore that well, and and to not ignore it means to notice it, you know, comment in the book, My wife has always said this great categorization of the world into two groups, economists and real people. She always reminds me that, you know, economists to think about all these benefits of things, but we never really process what's
happening to a lot of individuals and communities. Politicians are real people, but they need our help in noticing this. Why do we keep ignoring and like kind of leaving behind big swaths of our society. Well, I think things happen slowly. I don't think people intend to do it, but over time, by not noticing and taking bold action,
we do. And for those who say, well, you know, we can just turn back to a standard neoliberal mindset and Friedman or Freedrick Hiac, I would say, I just don't think there's the social support for a market economy if we don't help people more. And it's not a radical thing to say. It goes back to Adam Smith and classical thinkers. In some sense, we got to go home again. So what do you make of what China
is doing right now? They are very much, as you know, cracking down on industries, really looking about kind of redistribution of wealth or are making sure that are trying to it seems have greater parts of their society, you know, enjoy some of the wealth creation that's happened. What do you make of what they're doing? Yeah, I think it's tough in an authoritarian economy like China to do what they're trying to do. The goal shouldn't be simply to
redistribute wealth. The goal ought to be to help everybody participate and flourish. Don't see much of that in what China is trying to do, and lamentedly, whether it's talking about Republicans or Democrats. In the United States, not a lot of that either. We do have some programs that could be modified and hands beefed up to to do better, but I'm not hearing that discussion in Washington or would
they jam for that. As a former chair of the Council Economic Advisors under President George W. Bush, you've certainly had uh the year, not just of the president but also later of candidates running for president. Dean Hubbard, I'm wondering if you were advising President Biden right now, what advice you would give to him. Focus on helping everybody participate in our economy. That's not just an economic statement.
It's about dignity and flourishing. So tangibly, that means supporting work, supporting people's ability to connect to the economy, and if somebody loses his or her job from a structural change, help him get another one. I think that's a lot better. If I wouldn't define what I would mean by do back better, it would be that well, certainly a lot for us to think about. We really appreciate your time
on good luck with the book. Glen Hubbard Din, Emeritus Professor of Finance and Economic Serve at Columbia Business School. His new book out, The Wall and the Bridge, Fear and Opportunity in disruptions wake. It is out later this month.