Brian Deese

their foreseeable future? Well, thank you for having me, And you know, I thought we were going to start on the uh rosie. Nope, but I should have expected nothing less. I'll join this. I thank you, thank you for having me, and thank you for putting this together. Um, we are, no doubt in uncertain times. But I think that if you look at the US economy my perspective, the most striking feature of the US economy right now is resilience.

The resilience of households and consumer balance sheets, resilience of business and business investment, and globe the resilience of the US economy in in certain global environment. So, UM, we're certainly in a complicated and in many ways unprecedented transition, but I think that there's every reason to have a lot of confidence in the US position in the context of a globally uncertain environment. I'll take that as maybe

you don't know. Well, let me ask you easier question. Please, all right, I'll take any how you want to get think England is and you think the UK is in a in a recession, well, uh, I think the situation in Europe in the UK is very very difficult right now. They face a very difficult situation. Uh. And they are um as I was saying, in terms of the US position, they're significantly more exposed to the energy price volatility UM. And they don't have some of the incumbent strengths that

we have here economically. So I think it is it is and is going to be a tough puer it for the UK and for the European Union. Normally in the United States, when you cut taxes, uh, it's design to stimulate the economy, and that's what happened in Britain. They now cutting taxes to stimulate the economy. But it's had a seems a unfortunate impact on the British economy. Stock markets going down, and people are are very upset about it, or you're surprised about that. I wasn't surprised

with the market reaction. You know, I think that if we, uh, you have to any economic policy has to be in the context of the situation that we are in and in a monetary tightening cycle like this. Uh. The challenge with you know that that that policy aperture is it just puts the uh, it puts the monetary authority in a position of potentially having to move even tighter. I think that that's what you saw in the reaction. And also, you know, I would say it is important, particularly important

to maintain a focus on fiscal prudence, fiscal discipline. It is certainly something that we have been focused on here and uh, you know, the markets take notice. So let's talk about another easy subject. Inflation. Inflation is as high as it's been since I was in government. I managed to get a higher rate than you've gotten so far. But um, I wanted to know, in your view, is inflation now coming down a bit as a result of the FEDS hiking and do you expect the Fed continue

to hike U in the November and December fo MC meetings. Well, the goodness is the second part of your question is the easy one, as you know, because part of respecting the independence of the FED is leaving to this if you expect, look, the market expects that, and and okay, have any wisdom beyond that? I think, Uh. But but if you look at most of the data points over the course the last couple of months, we've certainly seen

headline inflation on a month over month basis slow dramatically. Basically, it's been flat for the last couple of months. That's a function of the fact that we've seen energy prices come down gas prices, uh, and that's offset price increases elsewhere. But I think if you look broadly across the economy, you are seeing a number of places where you're seeing the shift. And this transition happened in in real time. Commodity prices have have come off. You've seen that in

a number of the of durable goods segments. And at the same time, as you know that this this process operates with some lags. And so that's why even as you look over the course of the last couple of months, you've got to really, even at a moment of heightened uncertainty that we are in right now, have to do whatever we can to lift up from individual monthly data points Now, when I went to college many years ago, the standard textbook said that inflation was on average three

or four percent a year. That was relatively normal. For the last twenty five years, we've had two percent inflation, So we've gotten used to two percent inflation. My children have never seen higher inflation. But the FED now says they want to get inflation back to two percent, which is what it was. But why why not three or four percent? Is why does two percent have to be a goal? And how hard is it going to be to get down the two percent without putting unemployment up

the six percent or high higher. You know, A big part of inflation is expectations. UH. And the risk with inflation is not only the immediate impact on you know, purchasing power, but also the risk that expectations get on more get un anchored, and then it gets much more difficult to bring inflation down. So when you ask the question about bringing down to a level, I think one of the most important questions is is the is the is the shape of policy focused on making sure that

we don't lose control of those expectations. That's obviously something that the FED keeps a close eye on. UH. And so you know to your your question of of the process, Look, I am fundamentally optimistic about the American economy, and I'm optimistic that we can navigate through this transition in a way where we come out of this as a country and as an economy in a stronger position than when

the pandemic hit. So so yeah, at core, I do believe that that's that's There's there's no no certainty in any way or no no way inevitable that we are you know, we're going into a down turn for people live in Washington. Politicians, is it more difficult when unemployment is going up or when inflation is going up? Inflation affects everybody. Unemployment doesn't affect everybody, So how do you weigh the political trade off between unemployment going up and

inflation going up? Which is more difficult for politicians or for let's say, the administration. There's no question that inflation affects everybody, and it affects the if it affects the psyche. And I think that when it it affects a sense, I think also of people's sentiment and a sense in which things are you know, um uh in or out of out of control? And and we see that in

consumer sentiment data. At the same time, we also, as you asked the question about on the political side, as economic policymakers, need to recognize that the way that economists think about inflation and the way that Americans think about inflation often differs. That we have this idea of headline inflation versus core, and economists say, really should pay less

attention to headline because it has food and gas. You asked to typical people what inflation is, it's food and gas, and so you know, understanding the you know, the interplay between the economics and the politics of inflation is is something that we haven't been as used to. So let me go back to the n a C. And NFC was started under UM President Clinton and Bob Rubin was

the first person to hold that job. Can you explain to people what it actually does and what the NBC does stay to day when, for example, who's in the NBC, who's only the n AC What is your job actually

to do? So? UM, the National Economic Council are the job, the mandate, the mission of the organization is to coordinate economic policy across the executive branch and across the cabinet to make sure that the President is getting the benefit of UH making decisions of his entire economic cabinet, and also that the econic cabinet is getting clear direction from the President as well, so that that two ways. So

it's a coordination function UH. On the NBC itself are all of the relevant cabinet members, the sort of core Economic team o MB Council, Economic Advisor's, Treasury, but also Secretary of Labor, Secretary of Commerce, my team. The NBC team is a small team within the White House. That is our job is to do that coordination across the range of economic policiation. Now, you were the deputy in the Obama administration of the ANEC, and now you're the director.

Which NBC worked better the Obama administration one or the Biden one? Well, on the issues that I worked on in the Obama administration, it worked very very well. And the current UH ANYC works very well as well. So it's the subset of the ones I didn't work on. Okay, let's talk about your own background for a moment. I mentioned before you grew up in Boston area, UM, and what did your family do? Were they in business, academics, politics,

important things like private equity that they do that. Uh. My father is an educator, he teaches, uh. And my mother is a civil engineer by training and worked as an environmental engineer. Okay, So you went to Middlebury and what did you study there? I studied political science and economics, uh, internet within the international focus. Okay. And after you graduated,

what did you do? Then? I came here to d C on a fellowship to the Carnegian down Itt for International Peace, and I was doing uh, international economics, international economic development. I had spent the better part of a year in Argentina right before the collapse there. Became fascinated with trade and development issues, and so I spent Uh.

I came here to d C and the Argentine and economy collapse while you were there, No, right after I left, okay, right after Okay, you got correlation and causation, all right. So then you came back to Washington to do what? So? So I I stayed here? I uh, Um, I worked. I sort of shifted from from international policy, economic policy, domestic policy. Then I went to law school, left e C, and I came back here. We went to law school

to be a lawyer or not. I went to law school to UH to know not to be a lawyer, but because because I was fascinated. As I was working on the economic war economic elements, it became clear that most of policy is actually understanding law um in different ways. And so I went. I went to I went with the idea that I would continue to work in policy. But then so you didn't want to practice law ever, wasn't my objective? Okay, So how did you get involved

with the Obama administration? Did you volunteer in the campaign or how did you get involved in the campaign or the administration? So I started working on the two thousand seven two thousand new campaign, actually worked for UH I

had I had the most important experience. I campaigned again camp candidate Obama for about nine months, working for Senator Clinton Secretary Clinton UH and then after they lost, I was fortunate enough to then join the Obama campaign in campaign from what did then Senator Omama say about that? The good news was I was junior enough in the campaign and the Senator I don't think particularly aware of

that of my transition to his. So he got elected, and then you got this position as a special assistant the President of Economic policy. And what was the biggest thing that you accomplished during the Obama administration in your view, My first project upon coming into government was to work as part of the team that did the restructuring of General Motives and Chrysler as well as the finance companies

UM as well. And so that was basically from you will all many of you will recall November December of two thousand eight right through to the summer of two thousand nine. That was that was my over overriding. So after the Obama administration, you join the dark side of money management and you work for black Rock, but in charge of global sustainability. So what does that really mean? What were you doing at black Rock? So two things.

One was trying to uh actually do uh financial research to understand what are drivers of long term economic performance that are uh that are financially relevant but that may not be on the mind of traditional investors to you know, give you a concrete example. One of the most uh, you know, persistent measures of financial performance uncorrelated is the rate of change at which a company brings down its carbon emissions, not just the level of carbon emissions, but

the rate of change of doing stuff. And you know, we did a lot of research around that to to find that that's that is in part because it is an uncorrelated UH measure of operational performance. Better management team is actually better manage against that, and so that becomes the kind of thing that you can invest invest against. But it also expands the universe of what investors are

thinking about. So when President Biden was starting to run for president, you knew him when he was vice president. You're in the bomb administration. Did you support him? Where you work in the campaign for UM then Vice President Biden? Or did you work for somebody else? I was for for for for us of that time, I was I was busy. I had a job at a family I would any time that, any time anyone called, I would offer. So when did you actually get involved with the Biden people?

Wasn't after you won the election? Then they asked you to help with the transition. So I did some work in volunteering during to help on the developing some elements of the platform during that came together in sort of his his his general election economic policy. White House staff jobs are notoriously long houred and you have two little children, So, um, how do you manage your time? And how come you have no gray hair as a result of working these

long hours in two administrations. If you if the camera gets close enough, you'll see some uh I Uh, it's it's a it's a it's a it's a constant challenge, and it's it's I don't have I don't have uh particular wisdom or inside into how to answer it other than you know, needing to be extremely efficient with the time that you have, higher great staff and build a great team. Uh. There's I've got an extraordinary uh an ec team and core team inside the White House, without

which I wouldn't be able to do this. And also but it also takes a um an understanding family because no matter how good you are at prioritization, time management, and productivity with your own time, there was always, uh, there was always something that happens and always something that comes up. Your children are young. Um, so you go to PTA meetings and people give you economic advice PTA meetings, so they kind of say, I have an idea for

you when and fighting inflation? Has that ever happened? People are extraordinarily generous with their advice. I suppose uh, you know, somebody wants to write a book about you and so here's what what would you say that you feel you've accomplished or what would you like to have as your legacy. I'm just I'm reflecting on your question and how boring a book it would be. Uh. I guess I would

say two things. One is, I think that we are in a position where we could actually demonstrate that for the United States, doing dedicated public investment over the long term in areas of high productivity research, semiconductors, infrastructure, clean energy manufacturing. Showing that we can actually do that in a way that changes the trajectory of the economy is something that I would love to be part of demonstrating

and part of associating. The second thing for me is I think that one thing that I have tried to do and that I think we have tried to do, is to say that gonna have an economic policy where accelerating the clean energy transition is at the core of our economic policy. It's not that we have an economic strategy and then we think about climate change and clean energy policy. It's actually at the core. I think we are doing that effectively doing that, and that's certainly something

that I hope sustains across time. What is your career advice about how best to prepare for this kind of job. I would say a couple of things. One is, um, I can't encourage strongly enough people anybody who has any inkling towards public service to run toward it and u and engage in it. It's incredibly important at this point in our country right now too, for more people to serve.

I think the second is, particularly if if you're interested in getting into policies, then probably elements of that that that that are also true in the private sector, to which is you know, be humble, be willing to work a lot, and be willing to both not have any expectation or sense of entitlement, but also uh have a lot of aspiration and willing to step to the table. So recently we had the an act pass called the Inflation Reduction Act. I mean, who came up with that name?

Really it's a great name, um I guess so, But but you really think it's going to reduce inflation? It seemed like it was spending a lot of money, and how is the inflation going to be reduced by that? See it's because of the Inflation Reduction Act. Uh So joking aside, I actually think that it's UH. It's it is an appropriate name and UH it goes to the it goes to the structure of of UH. If if I could say that in a in a walkie way, the role of fiscal policy in a period of of

monetary tightening. What you want to do is you want to pro you want to take measures that will lower costs for individuals and do it in a way that lowers the federal deficit. Because if you're lowering the federal deficit at the same time that you're lowing costs for individuals,

then you're actually operating in the same direction. Now that's complicated to do from a policy perspective, but that is exactly what the Inflation Reduction Act accomplish, but doesn't really lower federal debt and and title deficit because I thought it was just lowering it but the lower ware it would otherwise have been, But it's not actually producing a net reduced reduction in the title of debt isn't so we're producing it below where the policy people said it

would have otherwise been right. So the appropriate way to judge any piece of legislation is is it going to reduce or increase the deficit compared to the baseline at the time, and the Inflation Reduction Act will reduce the deficit compared to the baseline by you know, about two hundred and sixty billion dollars depending in the first decade, probably more than a trillion dollars in the second decade.

And importantly, it does it in ways like you know, probably the simplest way to understand is the provision that allows Medicare to for the first time, negotiate for better prices for prescription drugs. That will mean that Medicare is spending less money on drugs. That will lower federal spending, but it will also lower the cost of drugs to Medicare recipients and also to recipients in the private market,

since Medicare is such a large purchaser. Okay um. In the Inflation Reduction Act, a lot of the taxing increases that the President had previously proposed the Build Back Better Act did not get in. There are those tax increases off the table for the remainder of the Biden term, or you're not precluded from uh those are those uh, those are policies the present thing thought made sense was would have supported if they were in the legislation and

continues to support going forward. And I will say, even for all the things that weren't in there, one of the reasons, to go back to your previous question why that bill reduces the deficit and actually helps in reducing inflation across time, is that what is in there, for example, is a new minimum tax book minimum tax um for the largest corporations, those with over a billion dollars and earnings. I think that that's the kind of reasonable, common sense

tax reform that makes sense. It does mean that some people will pay more in taxes, but certainly that kind of base broadening reform, there's a lot of there's a lot of important sensibility to it. On the day that the Inflation Reduction Act as signed, record high inflation numbers came out. So did you ever consider maybe adjusting the schedule of the signing ceremony or was it something you you said that who told the president the numbers were gonna be that high that morning and and maybe you

should change the signing ceremony. I think that that number and others go to how people are experiencing inflation today because one of the principal reasons why that headline number was basically flat. Was because in the month prior gas prices had calmed down by a very significant amount, and that is really important for typical Americans UH monthly balance sheets. But it also is important because it's it's one of

the most visible price signals in our economy. Now you're two in years into almost two years into this administration, UM, and you expect to stay for another two years I think, which it's a long UM two years, so you're not worn out and you could see doing this for another two years at least, if not more. I've got no plans to leave, and I've got my head down and certainly fully fully absorbed in the work we're doing. So in the next two years, let's suppose you control Congress.

What is you what you'd like to do most in economic policy in the next two years. What would be your highest goal other than getting inflation down and unemployment keeping a reasonable level? Is there another type of Chips Act or some other major piece of legislation that you want to get through? Look, I think there's UM. There's a number of priorities that that UH I would love to see us make more progress on. UM. I'll answer

your question. But as a decide, the first and most important thing that that we're gripped by and focused on now is effectively implementing this historic set of legislation that we have accomplished. The implementation of this to your point about chips and otherwise, the effective implementation across the board is going to make a difference, a big difference in terms of uh, the broader economic impact. But look, I think we need to make more progress on tax reform.

We made some steps here, but it's uh. Showing that we can as a country effectively fund our prior orities and also bill fairness into the tax code is important. It's important for trust, it's important for strengthening our democratic institutions. We need to make more progress on underscoring that issues that often get referenced as care or the care economy are not social issues, their core economic issues. They're a core to our labor force, uh, their core to our

productivity as a country. And there's other issues that are now you know, coming to floor, like housing and housing costs. The fact that we have persistent under supply of affordable housing in this country is a policy choice decades in the making. We could do something about that, and now is a really important time to do that given the period in the monetary policy cycle. There's a number of places where we can make progress, places where there is

a lot of actual bipartisan support. So UM and I would, I could, I could go through a much longer list if you think time. So what's the greatest pleasure of your job and what's the worst part of your job other than interviewing like this, But what's the greatest pleasure and what's the greatest um less pleasurable part? So, you know, having gone out and being in comp administrations, by far, the greatest pleasure is the people you spend so much time with them, but also the quality of people that

can come. You know, a white house is it's a in a sense, it's a terrible place to work. It's very hard and all the like, but it's also a place where you know, the the the you know, the reservation price or a wage that you would pay is negative because you know, everybody wants to come and and and and have an opportunity. So you can attract great people, diverse people with diverse backgrounds and extraordinary things to bear. So you make um friendships, uh and and bonds with

people and so that's at core the best. What's the worst part, the best part, I think the most challenging part is that your time is never your own. That's something kind of is something you you have to be prepared that something always can happen, and usually something does happen. Thanks for listening to hear more of my interviews. You can subscribe and download my podcast on Spotify, Apple or wherever you listen and s