Jason Furman: The current state of the U.S. economy

Good afternoon and welcome.

I'm Susan Collins, the Joan and Sanford Weill Dean here

at the Gerald R. Ford School of Public Policy.

And it's always a little bittersweet

to have our last policy talks of 2016.

But I'm delighted to welcome all of you here for that.

And I'm also thrilled that we're ending on a very high note.

So it's my great honor to welcome today the Chair,

President Obama's Council of Economic Advisors, Jason Furman.

We're delighted to have you here.

[ Audience Applause ]

Actually before we begin I just wanted to thank you.

You spent the entire day with us.

You have gone to classes, you've met with Ph.D. students,

you've met with some of our faculty.

You've already had a really full day.

Thank you, we appreciate it.

For his policy talks, Jason will reflect on experiences

in the Obama White House and also public policy's role

in reducing poverty which is a really important topic to all

of us especially

as the university has just launched the poverty

solutions initiative.

You can read about Jason's background in the program today.

And so I'm just going to give a very brief introduction.

As most of you know the Council of Economic Advisors

or the CEA provides objective empirical research

for the White House and prepares the annual economic report

of the President.

Jason Furman has served as CEA Chair since 2013 and he served

as you can see in the program in a variety

of economic policy posts previous to that appointment.

He's also known as a really data savvy strategist and also

as someone who is very good at explaining economic concepts

to economists and non-economists alike.

And so I know that many of you

like me have been looking forward

to hearing from him today.

I'd also like to take this opportunity

to highlight his many connections

to us here at the Ford School.

So first of all we have two faculty

who have previously served on the Council

of Economic Advisors, Marina von Neumann Whitman

who I don't think is here with us today.

But our very own Professor Betsey Stevenson who served

on the Obama administration for two years

and also with Jason Furman.

Second, Jason was a student of our very own John Leahy,

the Sinai Professor of Macroeconomics and Policy.

And I'm especially pleased to recognize a Ford School Alum,

Andy Taverna who is the Chief of Staff

for Jason Furman and is with us today.

Andy, we're really pleased and we're proud of all

of the great work you're doing.

So congratulations.

Following Jason's remarks we'll open

to questions from the audience.

And you should have received a card as you came into the room.

We'll have staff who are walking the aisles starting

in about half an hour or so.

And Professor Josh Houseman together

with two Ford School students, Sam Gellar [assumed spelling]

and Farrah Mandich [assumed spelling] will facilitate the

question and answer session.

If you're watching online, please tweet the questions

into us using the hashtag policy talks.

And so with no further ado I am delighted

to welcome Jason Furman to the podium.

>> Thank you.

[ Audience Applause ]

So thank you for that introduction.

Thank you for covering much of the Michigan connection.

But Linda Tesar is senior economist.

My mother's a graduate of the University of Michigan

and always wanted me to go here

and I finally succeeded in doing that.

And so I wanted to spend the whole day here.

And my special assistant is also a Ford School graduate,

Jeff Goldstein, so played a disproportionate role

in the Council of Economic Advisors

in the last several years.

And I don't think that's an accident because this is place

that really thinks about public policy, that's thinks

about an empirically and is grounded in the world

but does it in a manner that's really rigorous and serious.

And so I think you've helped me

and helped the country more broadly

and will continue to do so.

My talk today is going to be pretty broad range.

Actually I was originally going to focus more specifically just

on poverty and decided to broaden it out.

And make that an invitation also in the discussion we have

to discuss really whatever anyone here wants

to discuss including you can ask questions

that are little more political.

And I will choose whether or not to answer them.

So what I want to cover is the recent good in terms

of what's happened in the economy.

Then step back and put that in the context

of the longer term trends that we faced which go

under the analytically rigorous heading of bad.

And then talk about the sources, a decomposition of that in terms

of productivity, inequality and labor force participation.

I'm required to talk about our policies wherever we,

I go but I think it's actually quite important

because they're larger quantitatively I think

than many people appreciate and will be subject to debate

for many years to come.

So I think it's important to understand them.

And then finally I want to talk about issues with sustainability

and resilience going forward.

So this will put a lot of stuff on the table.

Then we can continue following

up on whatever parts you all want to follow up on.

So starting with the recent good.

The first thing I would start with, anytime we want to think

about the economy over the last eight years is where we started.

And we all know there was a financial crisis.

We all know there was a Great Recession.

What a lot of people don't appreciate given we know how it

turned out was just how bad and scary it was at the time.

If you look at household net worth, households lost more

than 15% of the net worth.

If you compare it to the Great Depression it's multiples

as large.

And that's because the stock market decline was the same

as what we had in the Great Depression.

The loss of value of housing was larger

and more people owned their houses.

The collapse in global trade was larger than the collapse

that help precipitate the Great Depression.

The loss in employment was about the same.

And GDP was a little bit more moderate.

And I remember, and I see Michael here as there and scared

at the time, Michael Barr, as well.

I used to look at this chart every day

that tracked the stock market.

And it had the Great Depression at 100

at the beginning, us at 100.

We're basically following right exactly the same path

up through March of 2009.

So it was this enormous and terrifying event.

To look at where we've come since then it's useful to,

you know, if you're assessing whether a drug works

to cure a patient, the thing you'd want to do is look

at a few different patients who have the same problem.

Give one of them one drug

and give another one a placebo or a different drug.

In some sense that's we did.

This hop shock hit a lot of countries

and this shows the United States, Japan,

the United Kingdom and the Euro area.

All of these areas took different strategies.

The United States was the one

that cut interest rates the furthest, most sustained basis

and did the most sustained balance sheet expansion.

This was all done independently in terms of monetary policy.

The United States had the most vigorous fiscal response

in the initial years of the crisis, although pivoted

to fiscal consolidation too soon,

sooner than we would have liked to.

And also did the most

to immediately recognize the problems

in the banking system and recapitalize.

And you look, we reattained our per capita GDP

on a sustained basis before any

of the other major economic areas.

We're growing at about the same or faster rate

than any of them still today.

And this is all done on a per capita basis.

Steal this, sorry, more flexibility.

You, the strongest indicator of what's happened in the economy

and the thing that matters the most

to people is the unemployment rate.

And the dotted lines show you the forecasts

at different points in time.

So in 2010 you felt the unemployment rate was going to,

oops, come down slowly and eventually get to about 6%,

We obviously came in ahead of all of those forecasts

in the slightly more partisan and humorous way to put

that was the famous comment that Mitt Romney promised

if he was elected after four years the unemployment rate

would get to 6%.

You know, good thing we didn't have to wait that long.

Probably not entirely accurate economically but captures some

of what happened with the unemployment rate.

Of course, you know, what people have focused

on is not just unemployment but wages.

And there's a standard pattern you expect to see

in an economic recovery.

First you see GDP growth which started in 2009.

Then you see employers being confident enough

to start adding jobs which happened in 2010.

And then they start raising wages which happened in 2013.

And if you look at the pace of wage growth since the end

of 2010, it's 1.4% per year.

That compares to essentially flat wages

in the decades before 2007.

And it's more wage growth in that four year period

than we saw in the several decades cumulatively prior

to 2007.

Now part of that is the strengthening labor market.

Part of that is also that this is adjusted for inflation

and inflation has been low

because the price of gasoline is low.

Although in the initial period

of the increase it's the labor market and in the last part

of the increase it is as well.

If you look at this business cycle as a whole,

at real wage growth, this next chart tries to do something

which gives you comparable periods of time

because wages get moved around a lot by recessions and expansions

and depending on which period you look at,

you can distort that.

But it looks at the peak of the business cycle in November,

And then it compares all the business cycles.

And what you can see is again real wage growth over the course

of this business cycle has exceeded the real wage growth

for any previous business cycle since the early 1970s.

And I should by the way define what this is.

It's in the note in tiny print, decent size print.

This is wages for what are called private production

and non-supervisory workers.

So these aren't managers.

So that 80% of workers and it's roughly the bottom 80%

of workers, and the average for this group isn't that different

from the medium overall.

And in fact if you look at the distribution, I'm switching now

from wages to income, so income is what the whole household gets

and not just, not just from the labor market.

You see that last year you saw income gains at every part

of the income distribution.

The largest gain's at the bottom,

pretty strong gains at the middle.

And the only one of these gains

that isn't the largest ever recorded,

so that's 7.9 is larger than any number ever

and those data go back to the 1960s.

The only one of those bars that's not a record is the one

for the 90th percentile but at 2.9% adjusted

for inflation probably not a whole lot for that group

to complain about either.

So the last thing to give a sense

of the labor market recovery and where we are in it

and where there's still more work to be done

on what I would call a cyclical basis which relates

to aggregate demand in the economy is to look

at the unemployment rate, broadly defined.

And this is a measure called U6.

Sometimes call this I think inaccurately

but sometimes they call it the true unemployment rate.

So the blue bars are the official unemployment rate.

And that shows the percentage of people who are looking

for a job but can't find one.

That average 5.2% before the recession, it's 4.8% now.

The next bar, the orange bar, includes people

who are discouraged, they've given up looking for a job

or people who are marginally attached.

Those are people who basically say they'd take a job

if one came to them but they're not actively looking

for one right now.

That actually hasn't changed very much.

The place where we continue to see a certain amount

of elevation and that indicates

that the recovery isn't complete is the people

who are working part time for economic reasons that,

I don't know what color that is.

That people who would like a fulltime job

but can't find a fulltime job.

That went up really rapidly during the recession

and it's come down pretty steadily since then

but hasn't come back to where it was before the recession.

So that remains an issue that, you know,

additional strengthening of demand would help.

And as does have some issues around the participation rate

which I'll come back to later.

But the bigger issue I'm concerned about is less

where we are in the wake of the Great Recession

and financial crisis and how our economy's recovering from it.

And more about the longer run trends that we've been facing

as an economy and the challenge that it's been posing on,

for the middle class and for families working to get

into the middle class.

And that's this longer term bad.

And I want to present what it is,

present a little bit what I think some of the sources

of it are and then talk about that because it helps inform

but doesn't definitively answer where the remedies are.

So the fact itself is one

that is not particularly difficult to comprehend.

The left bar is the average annual growth rate

of median family income from 1948 to 1973.

The right is 1973 to 2015 and you see an enormous slowdown.

You can do a lot of debating

over these numbers the Sun issues for example,

in households are increasingly small, oops, sorry,

I keep doing this, in the second period.

And so that 0.4 maybe it should be 0.5 or 0.6

if you adjust for that.

This is income doesn't include the expansion

in some government programs and changes in taxes.

If you include that, it helps that second bar a certain amount

and raises it a little bit.

There's a whole debate which we can talk about if people want

to about whether inflation is being mismeasured.

My bottom line is we probably are mismeasuring inflation,

the quality of things people buy is going up in ways

that statisticians don't track.

But that was always true so that 3 should be a bit above 3,

the 0.4 should be a bit above 0.4.

But none of these things are going

to change the magnitude of this slowdown.

There's a lot of different things that go into the slowdown

but I like to think of three major factors that you can look

at in trying to understand it.

The first is that productivity growth has slowed.

Productivity is the amount you can produce

with an hour of work.

And in theory that's how much we could afford to pay you,

that if you make $15 of stuff each hour we could pay you $15

and, you know, everything would sort of add up in the end.

That or you could think of it as just the size of the pie.

So the size of the pie was growing

at about 2.8% per year from 1948 to 1973.

Since 1973 that slowed to 1.8 a year and it's fluctuated,

it was better than that from '95 to 2005 as the internet spread.

It's been worse than that since 2005 in part I think in the wake

of the recession and the impact that's had

on business investment.

At the same time that the pie was growing more slowly the

share of income going

to the bottom 90% has changed quite a lot.

So in that first period it went from,

it was basically unchanged, 2/3 of the income went

to the bottom 90% of households in 1948 and in 1973.

From 1973 to 2015 it's gone from 2/3

of the income to 1/2 the income.

So the pie's growing more slowly.

At the same time it's being divided increasingly unequally.

And then finally and this matter is more recently,

more like in the last 15 years,

is the labor force participation rate.

And I'll come back to this.

But for men, you see it declining

in both of those periods.

For women it's increasing in both of those periods.

But that masks it for women since 2010.

Since 2000, it's been falling

and on men it's always been falling.

So you can think of this as, you know, everyone's wages are going

up more slowly but you make up for it by having two people

in your household work rather than one person work.

That works less well when the labor force participation rate

isn't rising as much.

I did a thought experiment to put some magnitudes

on these different factors.

And I set out to do this without really knowing what it would

show but just out of curiosity.

And I think it's interesting, relevant,

but doesn't 100% answer what's relevant for policy.

And that's this.

The first row here is the question what

if total factor productivity, which is a key component

of the productivity, had grown at the same rate after 1973

that it grew before 1973?

So we didn't have the productivity slowdown

that we had.

The answer is that, but then you distributed it

at the same increase and inequalities.

So it didn't, inequality didn't get any worse because of this

but didn't get any better.

The answer is that incomes would have been 65% higher

in 2015 or an extra $37,000.

The second thought experiment was let productivity growth slow

as it did in reality but let's freeze the share of income going

to the bottom 90% at the roughly 2/3 that it was in 1973,

so you don't have any increase in inequality,

than incomes would have been 19% higher or $10,000.

And finally what if the female labor force participation rate

had continued increasing after 1995 rather than peaking

and starting to decrease?

The answer is 6% or $4,000.

I can tell you the lesson I draw from this.

One is, you know, it's not

like this $61,000 was available to us.

That some of the things that happened

in the post-war period were the one time effect of innovations

that we made to fight World War II that we ended

up commercializing like the jet engine, nuclear power.

But some of it I think probably should be a wakeup call

for policy.

That we also invest in more infrastructure and research.

We did a whole range of things then on productivity

and there's no reason we couldn't continue to do now.

So I don't think, you know, we could have had $61,000

if we made different choices but I think it's well above zero.

The second lesson I draw is all three of those is large numbers.

I mean, 37,000 is larger than 10,000

but 10,000 a decent amount of money too.

So I think it motivates all of these.

If you were overly, if you were obsessed exclusively

with inequality, you should maybe look at this

and think ah-ha, productivity growth actually matters

when the pie isn't growing that quickly.

It's hard to have sustained wage and income gains.

But if you were, you know, just cared about growth

and had never thought about inequality, you know,

you should think 10,000 is a decent amount.

The last thing of course is it's not just what they're cause

in decomposition of the slowdown is, for policy we need to know

which of these we can solve.

So maybe the whole fault is productivity

but we don't have any policy that can raise it.

Inequality may not have been very responsible

but we may have huge policies that can deal

with that or visa versa.

And I'll try to talk a little bit about that

and I don't fully know the answer.

But to some degree the biggest takeaway I take

from this is we have quite a big problem in terms of incomes.

It probably has a lot of causes

and it probably has a lot of solutions.

And I wouldn't obsess over trying

to find the one magic bullet, I'd obsess over trying

to leave no stone unturned in doing something about it.

So I want to dig a little bit deeper into some of the causes

of these different things.

Productivity, the most important thing to know especially

about the recent productivity slowdown is just how global

it is.

And this just shows you the G7.

Every G7 country has seen its productivity slow over the last,

productivity growth slow over the last decade.

And it's also true of the rest

of the events the economies with one exception.

The United States has had the best productivity growth,

which I show you because a bunch of the other things we're going

to be the worst at, so I wanted to have at least one thing

that I was positive about in contrast to everyone else.

And yeah, now part of the slowdown as I briefly alluded

to before, I think it's a consequence of the recession,

the impact the recession had on business investment

and business investment is an important part

of productivity growth.

And you can quantify that just in the mechanical way

across these seven countries

and we could certainly talk about that.

But there's some other things going on as well.

I think one may be demography.

That to be a little self-promotional there's a

certain amount of research

that I personally find extremely compelling.

That society is more productive to the degree it has a lot of 41

to 49 year olds in it, might be 40 year olds

but 49 year olds in it.

And our demography has gotten somewhat older population

and that may be playing a role

and that may be something that's happening in Japan.

And then there's something

that I think has gotten too little attention

and is a little bit puzzling

and potentially a little bit troubling which is the decline

that we've seen in the dynamism of firms.

A lot of productivity growth isn't a firm figuring out how

to do something better, it's a new firm coming along

that does it better and displacing the old firm.

Or maybe a new firm coming along and challenging the old firm

so the old firm needs to get better at it.

But we've seen firms entering at a slower rate.

They've exited at about the same rate, slightly lower.

And as a result the average firm age is older,

the average firm size is larger and this is consistent

with other evidence

that competition has declined in the economy.

You also see something similar going on in the labor market

and there's a lot of different ways to show this.

This shows from the employer's perspective when you create jobs

and when you destroy jobs has also been trending down as long

as we've collected the data.

But it's also true that people move less from job to job.

Move less from place to place.

Move less from, you know, industry to industry,

etc. And this plays a role, I think not just in productivity

but also potentially, and the next thing I'm going

to talk about, which is inequality.

So inequality, this is another one

where the United States is number one.

And not just higher than everyone else in terms

of the share of the top 1% but also has seen a faster increase

in inequality for the top 1% than other countries.

There are two general classes of explanations for this.

The one that has gotten the most attention

and that I think captures a lot of what's going

on is a competitive explanation.

And that goes under the heading of two things happening.

One, the demand for skilled workers has gone

up because you have things like computers that compliment people

with skills and substitute for people with less skills.

So you want more skilled people.

At the same time we had a lot of increase in education

in the '30s, '40s, '50, '60s, as we expanding high school,

created and expanded subsidies for college.

But that that came to an end

and that now educational attainment is increasing

but it's increasing at a slower rate than it did before.

So the combination of less supply of skilled people,

more demand for them has meant that the price of skills,

or here the college earnings premium has trended up.

We have also looked CEA at another class of explanations

which go under a noncompetitive explanation.

And this relates to first of all changes in bargaining power,

so the idea that in every employment contract there's

some surplus.

And that way it gets divided depends

on the respected bargaining power

of the two sides in that contract.

And the graph you see here on the right, on the left,

shows you there was a big increase

in unionization starting in the '30s that coincided

with a big increase in the share

of income going to the bottom 90%.

And then you've seen that in reverse since the 1970s.

Now the causation probably runs both directions

as you have manufacturing that lends itself both to good wages

and to unionization as manufacturing goes away,

that makes both of those go away.

But there's a decent amount of literature

on a union wage premium as well.

And the other thing is the real value of the minimum wage peaked

in the late 1960s and broadly speaking has declined

since then.

The reason you see such a jagged picture is we've never adjusted

it for inflation, never indexed it

to inflation on a regular basis.

Every now and then we raise it, then we let it decline

for a while, then, through inflation,

then we raise it again.

I've also with Peter Orszag

and then some others have been speculating

about another hypothesis for inequality that may not jump

out at you immediately from this picture.

But the story is not that, the way you divide the pie

between labor and business, which is what the minimum wage

and unions are about, but also how some businesses have become

increasingly successful.

Some have become less successful.

The successful ones share their success

with the employees and visa versa.

So the way to think about this is reduction in competition

in the economy, which I mentioned before.

I mean some firms can be super successful.

So I think of Google, Pfizer and Goldman Sachs.

The issue in those firms isn't

that their managers get paid a lot more

than their line workers, everyone who works

for those firms no matter what they do gets paid better

than the same occupation working at a firm

at say the 25th percentile.

And you see this massive dispersion in returns

and an increased persistence of those returns,

so they don't seem to be accounted for by risk

that could also be playing a role in inequality.

The third factor is one that we've spent a lot of time

on at the Council of Economic Advisors,

Betsy Stevenson helped us do a lot of the work

for the first two years of our thinking on it

and we've continued to puzzle over it since then.

And I think people will continue to after it.

And this is because labor force participation

in part I think has gotten less attention than it should.

In part because it's played this role in the slowdown of incomes

but also because it goes beyond just incomes

because there's something to work

that really affects your dignity, your participation

in society and a lot of evidence that when people are

out of the labor force for sustained periods of times,

at least a much higher level of pain, of pain medication

and other opioids, of impacts on their children

and a range of other outcomes.

So in terms of labor force participation the big picture

fact is that it was increasing for decades.

It peaked around 2000 and it's been decreasing pretty much

steadily ever since.

This aggregate though masks, it's been stable since 2013 Q4,

and I just note that because that's when I,

roughly when I started in my job.

But this masks what's going on for a lot

of different subgroups.

And there's issues with what's going young people,

with old people, but I'm going to focus again on the group

that I'm a proud part of which is in this case is 25

to 54 year olds or what,

I didn't invent the term, is called prime age.

So for prime age men their labor force participation rate peaked

in the early 1950s and has declined pretty much steadily

ever since going from 2% of men out of the workforce to 12%

of the men out of the workforce.

But the labor force participation rate is the

percentage of people who either are in a job

or actively looking for a job.

So if you're not in the labor force participation rate it says

you've given up.

And if you look most of the people

who aren't participating haven't worked at all the previous year.

So these are people who are pretty much

out of the labor market, out of the economy.

So it's been declining since the 1950s.

For women you saw this big increase

and that's what caused the overall increase.

But that stopped around 2000 and has declined since then

and there's a huge gap between the trend we were on

and what has happened since then.

It's instructive to look at, you know, who this is.

And just for men in the 1960s your participation

in the workforce wasn't particularly dependent

on the amount of education that you had.

For the most part around 95, 96% of people worked regardless

of the amount of education they've had.

Labor force participation has dropped for every group

but it's dropped most precipitously for people

with a high school degree or less.

If you look at women the patterns a little

more complicated.

But since the decline began

in 2000 it looks roughly like this as well.

I think it's also instructive to look

at the United States compared to other countries.

And you may not be able to read the names

of all the other countries but the main thing

that you should be seeing here is that the United States

which is the red one is way to the right.

Which means our labor force participation rate

for prime age men is roughly tied with Italy's,

ahead of Israel's and behind every other country.

And for women the countries that we're ahead of are countries

that are culturally different

in their norms towards women working.

Countries like Italy, Korea, Mexico and Turkey

and we're behind all of the other countries.

The other thing here that this graph shows is the dots are

where countries were in 1990.

So the gap between them is the change since 1990.

For men our decline is the second largest of any

of these countries since 1990.

For women if you look almost all the dots are

down below the bars.

So, most countries have seen the percentage

of women participating in the workforce increase since 1990.

Japan is particularly striking.

It's the country right next to us and that's where in 1990,

that's where they are now.

Then you look at the United States, that's where we were

in 1990 and I can't hold my hand still

but if I could that's where we are now.

It hasn't moved at all.

We've tried to look at a lot of explanations for this.

Demand, a supply of labor doesn't seem to explain a lot.

It's not that people are married to someone else working

so they don't need to work.

Disability insurance has played a role but a very small role

because it hasn't increased that much.

Demand has played a role the same thing

and it has reduced the demand for less skilled workers,

for adults in lower relative wages for them

and lower amounts of work.

But I think part of the answers also to be found

in our institutions because all

of these economies had the same shock in terms of reduction,

demand for less skilled workers.

It hit the United States harder.

And what's interesting about that is you look

at different measures of our policies for labor markets,

a hundred is, you know, this is percentiles.

You compare us to other OECD countries

and we have the least labor market regulation.

We have the least employment protection.

We have among the lowest minimum wages

and among the lowest degree of unionization.

So the classic orthodox recipe for what you do

to have a well-functioning labor market we have.

And in a sense that was always the bargain we thought we had.

We're willing to tolerate more inequality

but we'll have really flexible labor markets that won't get

in the way of everyone getting a job.

What we've done quite badly is nationwide paid leave

where we're at the zeroed percentile

because we don't have it and everyone else does.

Expenditures on active labor market policy, so this is things

like job search assistance or training, that we spend 2%

of GDP, that's lower than everyone but Chile and Mexico.

Our childcare subsidies are low and we have a high tax

on people returning to work.

I think looking at that set of institutions

and challenging some of the previous notions we had

about labor market flexibility and understanding the need

for supportiveness is part of the answer here.

Wanted to just quickly put down on the table some

of our policies because it's not

like we've just been sitting here describing the set

of problems for the last eight years and not trying

to do anything about it.

Now of course our policies are less than we wanted to do.

And in almost every one of these the answer was to do more.

But want to put them down on the table relatively quickly.

The first is the fiscal expansion I mentioned earlier.

The recovery act is shared GDP is the blue part of that bar,

that's what we passed at the beginning of 2009.

What is often underappreciated is that after

that we passed 12 subsequent fiscal expansions for things

like payroll taxes, tax credits for infrastructure, housing,

unemployment insurance,

etc. Those increases the recovery act shrank

so we averaged about 2% the GDP for those four years.

And then there were automatic stabilizers.

You add this all up and it was on par with the fiscal response

to the Great Depression and larger than what you saw

over this period of time for any

of the other major economies in the world.

The Affordable Care Act, people, economists spent lots

of time worrying about whether something was causal

or not causal and diffs and diffs and regression

and discontinuities, etc. Unreasonably comfortable

with the decline we see after the dotted line there

which represents 20 million people being a causal result

of the Affordable Care Act.

At the same time we've seen an enormous slowdown

in per enrollee spending.

We've seen it both in private insurance

and we've seen it even more starkly in Medicare.

And that has translated for people.

If you look at overall premium growth

in the decade before the Affordable Care Act it was 5.6%.

In the years after it's been 3.1%.

If you look just at what workers contribute

to their premium plus their out of pocket costs,

their deductibles, etc. the slowdown has been even larger.

Now this has a lot of different causes.

It's not just the Affordable Care Act but there's a number

of ways in which the Affordable Care Act contributed both

by changing reimbursements in Medicare

and through delivery system reforms,

many of which have been mimicked and adopted

by the private sector.

At the same time minimum wage, we have not raised minimum wage

at the federal level in this administration.

We've certainly tried very hard.

But when we launched the strategy

for a higher federal minimum wage we were very conscious

that congress might now go along.

And so we made a real effort to make states to act,

to get localities to act and to get employers to act.

And if you look at that blue bar [inaudible] think the minimum

wage could go a lot higher.

You still see that decline relative to where it used to be.

But we've at least at the state level, including states

like Michigan, prevented the erosion of the minimum wage.

There's a large academic literature that's looked

at what happens in neighboring counties or neighboring states

when one raises the minimum wage, one doesn't.

At CEA we've reproduced that analysis and found that states

that have raised the minimum wage

since 2013 have seen a large increases in earnings growth.

I'm sorry, this is for retail, leisure and hospitality workers,

whereas job growth hasn't been different.

If you looked at the trend before the increase

of the minimum wage it's about the same and you look

at higher income workers, the trend is about the same.

So this does seem consistent with what we thought before

that reasonable increases in the minimum wage result

in higher earnings and don't result

in reduced job growth or hours.

We've seen, thanks to James Cavall [assumed spelling]

who I've done a lot of work with on this topic,

over the years a big increase in support for higher ed.

This is in the form of Pell expenditures

and this has an impact on that competitive explanation

of inequality in the long run.

If you look at after tax income inequality the,

this shows you the percentage change in after tax incomes

as a result of the affordable [inaudible] act

and the tax changes we've had, this is the largest shift

in income to the bottom 99% as a result of tax policies

of any administration since at least 1960.

And it's the largest dollar investment in inequality

since the Great Society in the late 1960s.

So that adds up to be quite large.

And the ACA's a really important part of that inequality story.

Now none of that needless to say is mission accomplished

but almost all of that is in the vein of things we need

to do more of like minimum wage, college

and a more progressive fiscal system.

Wanted to end by saying that all of this matters.

But, you know, there's nothing

that hurts incomes more than a big crisis.

And so sustainability is real important.

You don't want to prop up incomes today

at the expense of the future.

And wanted to say, you know, one thing that a lot

of economists are worried about now is that if you look

at past recessions we've responded to them

by cutting interest rates by five or six hundred points.

Interest rates now are really close to zero

which makes it pretty card to cut them by five

or six hundred points.

And with what Linda did at CEA is consistent with the idea

that this, while interert rates might rise they might continue

to be pretty low.

And so our scope

for conventional monetary policy may be more limited

in the future.

To me that says we need to make sure we're engaged

in robust fiscal policy in the future,

that we're ready to do that.

The fiscal situation has improved.

Two thousand eleven the debt was rising more

than it's rising now.

That's in part because of changes we've done to taxes

for high income households because, oh,

if you've [inaudible] the number before 2011 you'd see the

Affordable Care Act brought this down even more.

But debt is still rising as a share of the economy.

In my judgement this isn't some immediate urgent threat

to our economic growth next year, but it's something

that over time would chip away at our growth and chip it away

at our ability to engage in the fiscal policy that we need

and so it should be dealt with over the medium and long term.

Thanks too, so I can give credit to everyone in this room

that played a role in all of this, Michael Barr,

on the financial sector is more resilient.

And you look at tier 1 common equity [inaudible] sort

of how much of cushion you have if you lose money

to make sure you don't go bankrupt

and that's considerably more robust

than it was before the crisis.

But there's still risks in our financial system.

And then finally all of these are some things moving

in the right direction but more work remains to be done

and this is no exception.

It's a pretty amazing thing if you look at carbon emissions,

for a long time they were increasing.

They've been decreasing for some time now.

And the decrease got pretty steep.

Now part of that steep decrease was the recession,

just not the world's best way to solve climate change.

But it's continued on balance since then and we estimate

about half of it is due to policies.

The baselines have come down a lot.

We are, commitment is to get to that gray bar

which is what we've promised

under the Paris agreement to get to.

If you just continued policies based on the last estimate

from the EIA we wouldn't quite get there.

We need to some additional policies, although some

of the estimates since then suggest

that the baseline would come

down further absent policy changes,

which we can talk about in the Q&A.

So in summary I think we have made a lot of progress

in the last many years.

I don't think you want to throw out or deny that progress

because I think that progress contains in it the lessons

of what we need to do going forward

which in many cases is a lot more of what we've done

over the last eight years.

But I don't think you want to look at that progress and say

that we've solved the problem.

A couple of years of decent real wage growth doesn't make

up for decades of subpar wage growth.

And the fact that the participation rate has been

stable under my tenure as CEA Chair doesn't make

up for the 10 percentage point decline

in the decades before the country was fortunate enough

to have me as CEA Chair.

So I think there's a lot more to do going forward.

Obviously some of that is making sure

that one doesn't go backwards on some of the things I talked

about but a lot more room or need

to go forward on them as well.

So, thank you.

[ Audience Applause ]

[ Pause ]

>> Thank you again Mr. Chairman for joining us this afternoon.

My name is Sam Gellar, I'm a second year master student

at the Ford School here with an interest on housing,

transportation and public finance.

>> Hi and I'm Farrah Manich

and I'm a second year MPP student here.

And my interests lie primarily in economic policy

and sustainability policy.

>> Great, we have a ton of questions here to get through.

We'll see how many we can tackle.

But.

>> There may not be room for more questions but I should say,

have us do the topic I just talked about

but if people have broader issues or, you know,

personal advice that I don't, advice for,

have to do that too, but.

>> Excellent.

So the first question from the audience is what state

and federal education policies do you see

as potential mechanisms for addressing some

of the systemic issues with productivity,

labor and inequality that you identified?

>> So I think education is really important

and is disproportionally important relative to the number

of unique insights I have into it.

So there's others in the room, I mean, it's probably true

of every question that's going to be asked here.

But probably more true here in both directions.

If you look at us, at the United States and you look

at the number of years people were in school

which is obviously an imperfect measure of education,

it was rising at I think about .4 years every 5 years.

Now it's rising at about .15 years every 5 years.

So it's rising at 1/3rd the rate.

There are two margins that you could improve that on.

One is start people in school earlier.

And if you look at the share of three and four years,

so I'm trying to look

at who asked the question, but that wasn't you.

If you look at the share of three and four year olds

in school now I'd say we're 22nd in the OECD.

And, you know, countries like Chile and Mexico

that aren't nearly as rich

as the United States have a higher fraction

of their students in school.

So there's room to expand on that margin.

I don't think there's any overly cheap way to do that.

I don't think, you know, you could talk about reform

for preschool or whatever else, I think a lot

of it is we just spend a lot of money on it

and certainly don't spend a lot of money to help families

who have a hard time affording it go to school.

So we just need to expand the subsidies.

And by the way that has a side benefit

of the labor force participation issue I was talking

about of enabling, making it easier for parents,

disproportionately mothers to work.

We could also expand the number of years at the other end

in terms of college and the number of people both going

to college but also a big emphasis that we've had

in the administration on college completion.

And that when people get there making sure they are staying

in and completing.

That also is to some degree a function of money

and the subsidies you have a college.

And there's a whole set of ideas around that.

But I think it's also things that we did an expansion

of income based repayment

that James literally was the mastermind of

or the main conspirator in getting it done.

That says if your income isn't as high as it was,

your debts get deferred and then ultimately forgiven.

That's still more complicated than it should be.

There's places like Australia, which I've learned from Betsy,

is where all interesting polices happen.

At first I thought Betsy by the way was really insightful,

smart person because she always had examples

from other countries of how policies work.

And then I realized they were all Australia.

But anyway.

The, but more automatic the way it happens there.

And then in between K thru 12 I suspect, you know, there's a lot

that could be done in terms of reforms.

But I'm not as knowledgeable about them

so I'll leave time for more questions.

>> So the next question we have is do you think universal basic

income will be a necessary response

to jobs lost to technology.

And if so, how far away are we from meeting this policy?

>>> So my answer to the question is no.

And let me explain why.

First of all a universal basic income, it's a little bit hard

to define because everyone who likes it wants to be in favor

of something that sounds big and exciting.

They never quite tell you what it is

but I assume it means universal which means everyone gets it.

I assume it means basic which is just sort of a certain amount

of money that's almost flat and that it's income

which means that it's cash.

It has two flaws as an idea.

The first flaw is the basic premise itself.

I don't think our problem is that we have

so much productivity growth that it's going

to replace everyone's ability to work

and there won't be jobs for people.

First of all we don't have enough productivity growth

right now.

But second of all even if we do,

remember that picture I showed you

of labor force participation rates in different countries.

Switzerland has almost everyone participating in the workforce.

Italy has a low labor force participation rate.

That's not because in Italy they have really great robots

that are doing jobs so people don't have jobs.

And in Switzerland they're stuck doing manual labor

and like making the cuckoo clocks themselves.

The problem is that they have different labor market

institutions and they have different policies.

And I think that matters an enormous amount,

by 10 percentage points or more in terms of the fraction

of the people that are working.

So I don't think technology tells you what fraction

of your population can work, I think your policies do.

And universal basic income to me is giving up on the idea

that people can work which I think is both analytically

wrong, is inconsistent with hundreds of years

of technological progress.

And is a problem in the world where a lot of the, you know,

esteem people get derives from their job,

not just from the dollars that they have.

The second problem

with universal basic income is I think we have a limited ability

to sustain revenue in the United States.

To either sustain our current revenue levels

or sustain additional revenue levels.

And I think we need more infrastructure.

We need more investment of basic research.

We need to more fully fund some low income programs

like housing vouchers that we know work well.

We need a more, we need also to deal

with our existing obligations even before we talk

about those new ones like social security and Medicare

which are going to rise as a shared GDP.

So I think if you took a lot of money and gave it to people

on a flat basis who made $60,000 a year, that means you'd have

to do less of all the other things I just said or you'd have

to cut a bunch of well-targeted programs

for low income households.

So I don't love it as an idea.

>> In your opinion how significant has the growing

racial diversity in the workforce affected inequality

and participation rates?

>> In some ways you've seen in incomes a reduction

of disparities by, and I showed you the top 1% doing well

relative to others.

But if you look at, you know,

the black white earnings differential

or labor market opportunities now compared to, you know,

decades ago, that has improved.

If you look at labor force participation,

Hispanic men participate at higher rates than white men,

although black men participate at significantly lower rates

and then the unemployment rate is higher for African Americans

and for Hispanics than it is for whites.

So there's still a substantial amount of disparity

and inequality by race.

I think that's an important dimension to look at

and understand the problem.

To some degree some

of the solutions don't necessarily have race in them.

So if you look the Affordable Care Act

for example African Americans are much higher ratio

of health uninsurance than whites.

The Affordable Care Act didn't have any provision

for African Americans.

It had a provision for people

who had a hard time getting insurance and you look

at the result of it,

the uninsured rate decline much more dramatically

for African Americans than it did for whites.

I showed you the overall.

You look at the recovery act that again

for the most part was a macroeconomic policy

and the unemployment rate for African Americans

and Hispanics fell more quickly than it did for whites

because we're sort of all familiar

with the first fired in the recession.

But it also as you strengthen the economy can be helped.

So I think some of it is a useful prism and it's important

to understand discrimination and the role

that that's played in labor market.

But some of the solutions are broader ones as well.

>> So you mentioned that the administration's response

to the financial crisis was correct

but that we pivoted too soon.

Can or should we correct this now and if

so what will the effect be on inflation?

>> So, you know, the too soon was we,

it launched something called the American Jobs Act

in the fall of 2011.

And we called for about a $500 billion second round

of stimulus.

We ended up getting about 150 billion of that 500.

And then at the end of 2012 we didn't want the payroll tax cut

to go away.

We didn't want extended unemployment insurance benefits

to go away.

And those both went away.

So you had these two different places where we either wanted

to have affirmative new policies or we wanted

to continue our existing ones

and not have them go away so quickly.

So that created more a fiscal headwind

than we should have had.

Monetary policy partially compensated for that.

They saw what was going on with us.

They realized we weren't doing everything we were supposed

to do.

And they helped, you know, make up for it which is part

of what has limited the consequences.

In terms of where we are now I don't think we're all the way

recovered but I think we're most

of the way there in a cyclical sense.

Structural sense we still have this big challenge

in terms of incomes.

But our unemployment rate, our part time, all of that is most

of the way there, it's not all the way there.

I think additional demand would be welcome and helpful

but I don't think we need a huge amount of it to come

from fiscal policy at this stage.

I think a little bit of it would help.

I think it would be especially useful

if it was not just fiscal policy for the sake of demand

but it was something like infrastructure that was helping

to build up our supply and our productive capacity

over time and in the future.

If we did a lot of fiscal policy there's a chance

that that would mean, you know, more inflation.

But there's also a chance that the fed would see that,

offset it, and we'd have higher interest rates

and a different mix of the way we were getting

to the same level of aggregate demand.

So I think for the most part we're in a world now

where monetary policy will offset a decent amount

of fiscal policy but not completely.

>> It seems quite possible

that the next administration will see a substantial increase

in the deficit.

What do you think are the economic consequences both

in the short and long term?

>> In terms of the approach that I think I would take

to the deficit is, the most important is do no harm.

And then the second most important is to start

to make some progress over the medium and long run.

So we in the beginning of 2009 restored something called

statutory pay-go that said any change you made to tax

or spending you had to fully offset.

And we pretty consistently applied

that to everything medium and long run.

We didn't apply it to things like the recovery act

that were designed as temporary emergency provisions.

But when we did the Affordable Care Act I can't tell you the

amount of pain we went in because it didn't just need

to pay for itself over the first decade but need

to over the second, third, fourth,

and then there was this bill that amended it

that also needed to do the same thing.

And we went to great strides to make sure that it would do that.

So I think unfortunately there has, you know,

the rules around statutory pay-go were repealed

when republicans took control of congress.

And they don't abide by the same, you know, you need to pay

for everything while you do it.

The paying for everything while you do it has the advantage

of not making the problem worse.

I think that's for the most part sufficient in the short run

but in the long run we're going to need to actually deal

with the long run deficit.

So if it does go up over the next couple

of years that's something I'd be concerned about.

Not predicting a crisis that would result from it,

I think we have a lot of people that want

to lend the United States money and lend us money quite cheaply

and I don't think that's going to change.

But I mean interest rates will go up but they won't,

I don't think they'd change in some dramatic fashion.

But I think it more chips away at our national savings,

chips away at our ability to either invest

or to fund our investment domestically which the benefits

of future growth would go to repaying our creditors rather

to us and put us in a worse position over time.

>> Some contend that it's getting harder

to accurately measure GDP and GDP growth due to increases

in technology or whether or not this is the right measure

for economic well-being in general.

What do you make of this claim?

>> It's always been hard to measure GDP.

Robert Gordon has a book on the rise and fall of American growth

and has great examples of the statisticians.

I think did include cars until something like five years

after Ford introduced the Model A car.

And, you know, just missed all

of these quality improvements and expansion in it.

And it's really, I mean there are statisticians

that do a great job.

They're among the best in the world.

But it's really difficult to figure

out if something costs more this year than last year is it

because that thing is better than it was last year

in which case GDP went up.

Or is that someone wanted to raise the price of it

in which case it didn't.

I think there's a bit of evidence

that there may be more parts of our economy

where that's harder today than in the past.

But a lot of the, but there's things

that go the other direction too.

So, you know, one of the places that's hard is

in computer hardware.

We don't make a lot of computer hardware.

So insofar as we're making an error

and measuring quality growth in computer hardware,

that was a bigger deal 15 years ago when we made more

of it here than it is now.

And 1995 to 2005 which some of the people in this room remember

that period, that period began with if I made a social plan

and my friend didn't show up, I went and found,

I'm sorry 1995 to 2005.

In 1995 if I made a social plan with a friend

and didn't show up, I'd go find a pay phone

and call my answering machine and press a bunch of buttons

until I could get to the message.

By 2005 I had a cell phone and I had email

and I had a whole bunch of things.

So there was lot of progress in that decade.

And we actually, a lot

of it didn't show up in the statistics.

In some ways maybe more was missing from the data

in that decade than the decades since then

and the [inaudible] people have done that's shown that.

So I think we've always had an issue.

My guess is that issue's always gone in one direction.

So that's what I said before

that income growth used to be faster than 3.

Today it's higher than 0.4.

I'd shift them both up with huge amount of uncertainty

by about the same amount, maybe one a little bit more

than the other, but not radically change

in the conclusion.

In terms of GDP's wellbeing, absolutely it's not wellbeing

but it's pretty, and Betsy has done a lot on this,

it's pretty well correlated with it

that richer countries people tend to be happier

and having more GDP helps alleviate a lot of problems.

It tends to lead to higher incomes.

It puts you in a better position to engage in public programs

to help either share the benefits of the society

or invest more in your growth and reduces even just the amount

of fighting over scare resources.

So it's not at all sufficient.

We need to look at a wider range of things.

And I was focusing not on GDP but median household income

which I think in some ways captures it even better what

you want.

But that's pretty related to GDP and pretty important to people.

So I don't think on a quarter to quarter basis and worrying

about the macroeconomy, I think the GDP is not

such a terrible thing to look at.

>> Do you feel the Obama administration failed to develop

or publicize effective policies

to address middle class stagnation

and rising inequality?

Would better communication have stemmed the probability

of what some consider a demagogue winning the most

recent presidential election?

>> No comment on the last part.

The first part, you know,

President Obama has said exactly that before.

And I always have mixed feelings when I'm sitting

with my colleagues because I'm like oh, so it wasn't my fault,

it was the communications director's fault.

If only she had done a better job it would all be fine.

And that feels to me, I don't know, overly self-indulgent

and probably not a fair conclusion to reach.

I don't know, it's very hard to break through on stuff.

You know, I've had a lot of experiences where someone's

like you should only give a speech where he says blank.

And I'm like yeah he said that in every one

of his last eight speeches but it wasn't covered

on the evening news so you wouldn't know about it

and I don't blame anyone for not reading speeches

from beginning to end, so.

Some of this is hard to break through on

and hard to communicate about.

Some of it, you know, I showed you that graph at the beginning

that showed you the United States ahead of Japan

and the UK and the Euro area.

You know, but that's grading on curve.

You know, anyone sitting out there isn't comparing to those.

They're saying, I can't remember what the number is

but we're four or five percent ahead

of we were before the recession on a per capita basis.

That isn't great.

We should have had faster growth.

And they're not satisfied with it.

So, you know, I think there's some legitimate reasons,

I think there's a lot

of legitimate reasons people are concerned.

And there have been a lot of legitimate improvements.

And we've tried and I think it's hard, I don't know,

didn't fully answer your question,

but maybe that's evidence of the premise being correct.

>> So trade agreements are predicated on the belief

that winners will gain enough in surplus to be able

to compensate the losers for their losses.

Are we doing enough to insure that these transfers

of surplus are happening?

If not, what should we be doing?

>> So I think we should be doing more to share benefits.

And in some ways the fiscal changes I showed you

over the last eight years are a huge change.

You see a nine percentage point increase

in the tax rate from top 1/10 of 1%.

And an 18% increase in the after tax income of the bottom 20%.

So I don't think, you know, nothing has happened,

a decent amount has happened.

But we should be doing more to help people,

to help people especially not just in terms of incomes

but finding jobs through search, through training,

through assistance for housing and for mobility.

As well as something we've proposed called wage insurance

which when you take a new job if it doesn't pay as much

as your old one would pay you some of the difference

in terms of compensation.

I'm positive that trade causes diffused benefits

and concentrated costs, that's very well documented

and a reasonably obvious thing.

I'm much less sure that trade contributes to inequality.

Trade does contribute to, may contribute to inequality

on the production side where it's part

of what has maybe favored more skilled workers and enabled them

to earn more relative to less skilled workers.

But I don't think we should sneer at thinking

about the consumption side of the equation.

And tradeables and manufactured goods are a larger fraction

of the consumption bundle of low income households

and moderate income households and high income households.

And so on the consumption side it's played a big

role otherwise.

And put another way, if I asked anyone in this room

to design a policy to reduce inequality,

your idea probably wouldn't be that if you had a backpack made

of nylon or some other manmade fabric it would have an

A backpack made of leather, it would have a 10% tariff.

And a backpack made of cotton that would have a 6% tariff.

And those numbers are a little bit wrong

but they're close to right.

You know, and you also wouldn't have,

if you had a stainless steel spoon that you wanted to buy

that you would pay I believe it's a 10 or 15% tariff

on all stainless steel spoons made abroad.

But this is, and this one is literally true

and exactly right, if you want to buy a silver spoon

for your child that is tariff free.

So I don't think, I think that's a really crazy way to think

that you should deal with inequalities

through a patchwork set of tariffs that were set

in random ways by lobbyists for a variety of industries that,

you know, raise prices for the things that people pay.

So I think we should do the compensation.

I think we should be concerned especially

about the concentrative loss.

I think we should be really concerned about that.

But I'm less convinced about the inequality.

>> So knowing what you know now and knowing

that President Elect Donald Trump will be taking office

in two months, how would you approach economic policy

differently for the Obama administration

if you could do it all over again?

>> All of it, no.

You know, the one, this is

like I would have answered the same way without, you know,

[inaudible] on this one I might even have been more worried

in that regard just politically not economically.

That I am worried about not

where we are cyclically right now.

I think we're in good shape in terms of the rising rate

of wages I showed you, consumers are confident,

they're spending a lot.

So I'm not worried about a recession tomorrow.

What I am worried about is there will be some bad thing

that happens in the global economy or the U.S. economy

at same date at some point in the future.

That we have less monetary ammunition to deal with it

and so fiscal policy has to play a bigger role.

What I'm worried about is there's a lot of controversy

over that role for fiscal policy.

And I told you in 2011 and '12 we were blocked

from what we wanted to do.

I wish when we did the recovery act that maybe we had put

in place more automatic things.

So when the unemployment rate goes up you get to stay

on unemployment insurance for longer.

When the economy goes down it hurts state budgets,

state contract and that hurts the economy.

We should automatically raise the amount

of Medicaid money that states get.

That, you know, maybe we even look at other things on the tax

and spending side that improve what are called the automatic

stabilizers, things that happen automatically in a recession.

And what's nice about those is there's a real complementarity.

If you give money to people when they need it,

it helps them smooth their consumption and insure

at an individual level against shocks.

And because they're smoothing their consumption they're

spending more and it helps the overall economy.

So I think that's something

that if we had done probably would last forever,

would help us deal with recessions better in the future.

You know, other things you can't, you know,

if I had known Donald Trump was going to be President

or I'd known Hillary Clinton had been President, in either one

of those cases I would have wanted

to pass the Affordable Care Act with 50

or 60 votes in the senate.

Depending on how it's done you can change the Affordable Care

Act so there's nothing you can do.

You know, maybe I regret it wasn't a

constitutional amendment.

But, you know, in fairness I didn't think

of that at the time.

I guess you could have skipped the whole Supreme Court thing

too if you had done it as a constitutional amendment.

So the more I think about that, yeah, maybe I'll make

that my idea for what we should have done differently.

>> This will be the last question.

What are you plans for after January 20th?

>> I, you know, love working

on the policy issues that I've worked on.

I started out as a graduate student in economics.

And I think John Leahy who was my advisor could tell you,

I think I was pretty much as narrow as anyone else

who was a graduate student.

And then I sort of accidently ended up in Washington

and discovered that I liked a wide range of policy issues.

I like to combine a little bit of politics and economics

to figure out how you can navigate to get something done,

not just what the pure best idea on paper was.

And I liked talking about and communicating those ideas.

I've had the best job in the world to do that set of things

for the last 3-1/2 years.

So I will have to go off and find the second best job

in the world that allows me to do the same things.

But I'll but, you know, writing, researching, thinking,

speaking about, etc. the types of issues

that we've all been talking about today.

I just will have like four people

in the audience rather than all of you.

So thank you for being here today.

>> Thank you very much.

[ Audience Applause ]

>> Thank you Jason, that was indeed very wide ranging.

It was also very substantive so we very much appreciate that.

I'd also like to thank all of you for joining us today.

While this is the last policy talks

of 2016 we do have a pretty strong line up for 2017.

So I encourage you to take a look at our website.

And we hope to see you again next semester.

We also hope that you'll stay to continue the conversation

and enjoy some refreshments out in our great hall.

There is a reception there so please stay and join us.

And please join me in a final round of thanks to Jason Furman.

[ Audience Applause ]