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Joining us now, and I've really been anticipating this is Glenn Hubbard out of Florida with just terrific academics and frankly giving energy to Columbia University's business schools there Dean for so long. He's doing different things now. But I'm going to cut to the chaser. Paul's got lots of FED questions. Glenn, I am absolutely thunderstruck and crushed that you're not on the short list to be chairman of
the FED. Have you ever talked to the Secretary of Treasury about your commitment to a more conservative economic ethos?
Well, thanks for having me, Tom. I think the President's got a good short list for the FED. I look forward to the choice. This is probably the most challenging time to run the FED that I could ever imagine.
So that was diplomatic that on exactly. You learn to do that when you're Dina Colombia.
Exactly, Glenn, how do you view here the FED? Here? It's in a little bit of it a position it has doesn't necessarily find itself very often, which is, you know, really under some political pressure from the White House here? How do you view the FED these days.
Well, I think there's a short run and a long run challenge. The short run challenge is the one in the news, which is what do you do about rates? You have inflation that's too high, you have a job market weakening. I think the case for a lot of rate cuts is pretty weak. To the extent that they're worries about employment. Many of those are structural, they're AI, They're changes that really are beyond the Fed's purviews. I
think the Fed's watchful waiting makes sense longer term. The challenge is how do you keep an independent FED in the presence of political pressures? And I think while the FED needs to be independent, it has made mistakes. Trump is not entirely incorrect, and so the next chair will have to do some reforms.
So you mentioned AI, Glenn, it's certainly been a key key narrative of this market over the last two to three years as companies step up their spending here. But what are the impacts do you think on the US labor force? There's a lot of consternation out there.
Well, I think it's too soon to tell. I mean, basically, AI can either substitute on the one hand, for workers, or it can compliment workers' skills, and we're seeing both of those in the labor market. It won't surprise you to know economists completely different in what their views are on AI. I think in the long run AI is going to displace many jobs but create many more jobs. Where I think people may be surprised is on market
valuations and who wins from AI. Just like we learned in the Telco boom in the nineties, a lot of the first movers lose money, but ultimately it raises productivity. We may well see.
Weekly let's go there, I mean, I mean Glenn hlbrid with us folks for the whole of you worldwide on YouTube and all of our radio affiliates in America. Thank you for joining this morning. Glenn, you're teaching at Columbia or frankly at your Central Florida and you have to discuss productivity. We're blind right now to where productivity is in twenty twenty five. When won't we have an understanding of this new productivity?
Well, it's a great question, Tom, and the honest answer is it takes time. So if you look at previous waves of what economists called general purpose technologies like electricity, or mainframe computing or the internet. They took a decade or more to really ripple through productivity. And the reason is it takes time for businesses, for individuals adapt. I think it'll take less time this time, so it may be within five years. But we shouldn't be expecting it overnight.
Okay, But Paul and I've had this in many conversations. It's just brilliant work. Can you to Richard claried for his support of the show. Glenn Hubbard A long ago, in globalization, we broke a bargain with the clothing labor of the Carolinas. We said, we're going to retrain you. We're going to do this. Are we going to do the same thing with AI where we go sort of AI globalization and we break the labor bargain with all those people pushed out of jobs.
I'm super worried about this point. It is the political economy question of our time. If you look at the past three or four decades, technological change is actually number one then globalization. We didn't retrain people. We were too slow moving. AI is going to happen faster. I do worry about it. I hope the administration will become more focused on how do you come on?
I got tied at one minute left, Glenn, let me cut to the chase. The elites are from the fancy schools up north. Granted you did so well in the South. You went to Harvard. There's like three zip codes out near Palo Alto. There's the northeastern zip codes. You're one of the few people we have who viscerally gets the South. What's your message to the elites about not doing a redox that busted globalization of years ago?
Well, two things. One, there's smart people and innovative ideas everywhere. We need applied research centers everywhere. We need to help place us left behind. And second, our politics depend on this. If we want to embrace AI and all it brings, we got to get this right.
Glennahlberd, thank you so much. Great. Should I get off my soap box now? Glenn Hulbert, thank you so much, Always and forever with Columbia University.