As the Economy Screams

The Fed just dropped the fed funds rate by 75 basis points — the largest such move since 1984. No matter what the issues were yesterday, it is clear that the economy — domestic and global — is what will be the biggest political issue today and tomorrow… at least for a while. So for this New America event, our Economic Growth Program and Next Social Contract Initiative brought together economic policy advisors to the various political campaigns.

Steven Clemons, Director of the American Strategy Program at New America, moderated the discussion and subsequent Q&A, which explored the challenges facing the U.S. economy and the wide range of responses being floated by the leading presidential hopefuls.

The following are highlights of the event, while an MP3 audio recording of the full 95-minute event can be downloaded below and video can be viewed at right.

Austan Goolsbee

“If we make the investments we need to in our educational system, in energy
policy, in technology… we can maintain our place as the richest most productive
country in the world.”

“[The subprime crisis] is rooted in the problem
of middle class economic anxiety and the lack of savings.”

“To address these issues, in the short run we need middle class tax relief.”

Leo Hindery

“We have a circumstance now where we have a massive credit crisis. It is so
unfair to put this on the backs or on the names of women and men of lesser means
and call it a subprime crisis. We have a pervasive nation wide, increasingly
global credit crisis.”

“It’s not seventy five percent of Americans who
have found themselves living in stagnant conditions economically. The number is
closer ninety percent. The wealth in this country has accreted to the top ten to
the top two percent in unprecedented fashion.”

“This economy needs a kick in the pants, and it needs it right now.  It needs in a way that will excite the consumer crisis of confidence and of credit that exists in this country today.”

Kevin
Hassett

“Why is it that the stimulus plans can be caricatured as borrowing from the Chinese that we can drop
out of helicopters? How is that going to fix the long run problems of our
nation? Well I would argue that it isn’t the right thing to do. And that’s what
Senator McCain firmly believes.”

“[John McCain’s] view on stimulus is tied into his view that we have to start taking steps in the direction of fixing our long run problems. We should try to restore the competitiveness of U.S. corporations.”

Gary Gensler

“Energy policy is critical not only for the economy, but also for energy
security. Right now we are running close to 900 billion trade deficits a
year. How can we expect to bring that down when if we don’t get energy security
and have more dependence on natural resources here, and that means more green
jobs and promoting alternatives to uses of oil.”

“[Hillary Clinton’s] program of about 110 billion dollars… [is] around the issues of housing, energy and jobs, to help promote and be specific to those three areas.”

Participants

• Austan Goolsbee
  Senior Economic Advisor, Barack Obama for President
  Robert P. Gwinn Professor of Economics, University of Chicago Graduate School of Business

• Leo Hindery
  Senior Economic Advisor, John Edwards for President
  Managing Director, InterMedia Partners, L.P.

• Kevin Hassett
  Senior Advisor, John McCain for President
  Director of Economic Policy Studies and Resident Scholar, American Enterprise Institute

• Gary Gensler
  Senior Advisor, Hillary Clinton for President
  Former Under Secretary of the Treasury for Domestic Finance
  Former Assistant Secretary of the Treasury for Financial Markets

• Craig W. England
  Economic Policy Advisor, Mike Huckabee for President
  Managing Director & President, England & Co.
  Former Principal, Legg Mason Investment Banking Group

invited