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Claudia Sahm on Economic Policy (Podcast) · Masters in Business

• 0:02
  Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.
• 0:07
  Speaker 1: This week on the podcast, I have special guests. Her
• 0:10
  Speaker 1: name is Claudia Sam and if that name sounds vaguely familiar,
• 0:15
  Speaker 1: she is the person who invented the some rule, which
• 0:18
  Speaker 1: essentially is a way to identify when you are in
• 0:22
  Speaker 1: a recession in real time. Traditionally, we wait for the
• 0:27
  Speaker 1: official n B e R proclamation. Usually it's a year
• 0:32
  Speaker 1: or so later. They were surprisingly quick to declare recession
• 0:37
  Speaker 1: and it was either March or April um. The some
• 0:40
  Speaker 1: rule essentially gives you a way, by using unemployment data
• 0:45
  Speaker 1: to figure out in real time when you're in a recession,
• 0:49
  Speaker 1: and it's really tremendously helpful. I know Claudia from a
• 0:52
  Speaker 1: number of economic dinners and events I've attended. I always
• 0:57
  Speaker 1: thought she was kind of interesting and wanted to have
• 1:00
  Speaker 1: her on the show, and I just need an excuse
• 1:04
  Speaker 1: to get her on. And then last month she wrote
• 1:08
  Speaker 1: this fiery blog post economics is a Disgrace. I'll link
• 1:13
  Speaker 1: to it on the blog, and and she specifically calls
• 1:18
  Speaker 1: out people by names, she calls out institutions, She talks
• 1:22
  Speaker 1: about sexism, she talks about racism, She talks about misogyny,
• 1:26
  Speaker 1: she talks about bullying, She does not hesitate to name names.
• 1:31
  Speaker 1: And really it was just a blistering blog post. I
• 1:36
  Speaker 1: don't say that very often, UM, for someone within an industry,
• 1:41
  Speaker 1: within a respected institution, to say, hey, this is an
• 1:45
  Speaker 1: utter mess. We better get our acts together soon. And
• 1:50
  Speaker 1: you know, by the way physician heal thyself, it was
• 1:53
  Speaker 1: really something that that caught my eye. UM. Economics isn't
• 1:58
  Speaker 1: the only industry that has these sorts of issues. Between
• 2:02
  Speaker 1: the Me Too movement and what we've been seeing with
• 2:04
  Speaker 1: Black Lives Matter, it's pretty clear that that this is
• 2:08
  Speaker 1: endemic in a lot of institutions and a lot of professions.
• 2:13
  Speaker 1: But it's kind of rare to see somebody who's within
• 2:15
  Speaker 1: that institution calling it out. We also talk wank out
• 2:19
  Speaker 1: about stimulus checks and and recessions and macroeconomic policy and
• 2:23
  Speaker 1: what's being done correctly this time and what should have
• 2:26
  Speaker 1: been run right In O eight oh nine, it's it's
• 2:29
  Speaker 1: good wonky fun. I save all the grievances for the
• 2:34
  Speaker 1: last segment, So if that's not UM floating your boat,
• 2:38
  Speaker 1: you don't have to listen to that. But she does
• 2:40
  Speaker 1: an excellent job explaining what the profession is getting wrong
• 2:43
  Speaker 1: and what it needs to fix. And this includes both
• 2:45
  Speaker 1: policy and research and publication as well as hiring practices
• 2:50
  Speaker 1: and other things. So I think you'll find this very interesting.
• 2:54
  Speaker 1: With no further ado, my conversation with Claudia some vis
• 3:01
  Speaker 1: is Masters in Business with Barry Ridholts on Bloomberg Radio.
• 3:06
  Speaker 1: My special guest this week is Claudia Sam. She is
• 3:10
  Speaker 1: the director of macroeconomic Policy at the Washington Center for
• 3:15
  Speaker 1: Equitable Growth. She was previously a senior economist at the
• 3:20
  Speaker 1: Council of Economic Advisors for the Obama administration. In from
• 3:26
  Speaker 1: two thousand and seven to she was a researcher and
• 3:31
  Speaker 1: section chief at the Board of Governors of the Federal Reserve,
• 3:34
  Speaker 1: where she specialized in macroeconomics and household of finance. She
• 3:40
  Speaker 1: is also the creator of the some Rule, which determines
• 3:44
  Speaker 1: if a recession is occurring in real time. Claudia Sam,
• 3:49
  Speaker 1: Welcome to Bloomberg. Thank you. I'm so happy to be here.
• 3:53
  Speaker 1: Tell us about how you found your way to the
• 3:56
  Speaker 1: Council of Economic Advisors for the Obama ministry. Yes, so,
• 4:01
  Speaker 1: by the time I went to the Council of Economic
• 4:03
  Speaker 1: Advisors which was in the summer off. I had been
• 4:08
  Speaker 1: at the Board for several years, so I went as
• 4:12
  Speaker 1: the macroeconomic senior economists. I covered at the White House
• 4:16
  Speaker 1: all of domestic macro and housing policy. So when I arrived,
• 4:22
  Speaker 1: I thought, oh wow, they were like a hundred economists
• 4:25
  Speaker 1: or more at the Board that cover these two topics.
• 4:28
  Speaker 1: And but by the time I went there, I was
• 4:31
  Speaker 1: trained to be able to do that. I started in
• 4:34
  Speaker 1: two thousand and seven as an expert on consumer spending.
• 4:38
  Speaker 1: Over time I got to manage and oversee the staffs forecast.
• 4:44
  Speaker 1: I had been able to do a lot of briefings
• 4:46
  Speaker 1: and writing. So by the time I went to c A,
• 4:48
  Speaker 1: and that is true of everyone that they sent over there,
• 4:52
  Speaker 1: I had the experience to step into that role and
• 4:54
  Speaker 1: it for me it was really refreshing because I was like, oh,
• 4:57
  Speaker 1: I am a generalist. I said, most of my time
• 5:00
  Speaker 1: doing business investment. As I said, no one would have
• 5:03
  Speaker 1: asked me what I thought about business investment, and there
• 5:06
  Speaker 1: was a really rewarding experience. Jason Furman was chair at
• 5:09
  Speaker 1: the time. He is excellent. He worked as so hard
• 5:13
  Speaker 1: in a good way. Jay Campbell was a member that
• 5:16
  Speaker 1: I worked with UH really closely, and I mean really
• 5:20
  Speaker 1: everyone that I worked with, from member to senior economists
• 5:24
  Speaker 1: to junior economists too, in terms like they were just fabulous.
• 5:29
  Speaker 1: My last day adds the Council of Economic Advisors was Brexit,
• 5:35
  Speaker 1: and so uh, I'm really good at picking good times, right.
• 5:38
  Speaker 1: My first forecast at the FED was the start of
• 5:41
  Speaker 1: the Great Recession. My last day at the e A
• 5:45
  Speaker 1: was Brexit. I worked all through the weekend. What was
• 5:48
  Speaker 1: funny is when I got back to the board on Monday, no,
• 5:51
  Speaker 1: it was crickets, Like nobody was going to come ask
• 5:53
  Speaker 1: me what I thought about Brexit. We have a whole
• 5:55
  Speaker 1: team of international economists. So it was a really interesting experience.
• 6:00
  Speaker 1: Ants I'm glad I did it. It really focused my
• 6:03
  Speaker 1: mind on what economic policy could be, frankly should be.
• 6:09
  Speaker 1: And I'll end this piece with just a funny story
• 6:13
  Speaker 1: and how like the journey to the CEA started back
• 6:17
  Speaker 1: in undergraduate So I went to Dennison University, a liberal
• 6:21
  Speaker 1: arts college, and in my intermediate macro class, Dick Lucier
• 6:26
  Speaker 1: taught the class and part of the class was us
• 6:29
  Speaker 1: being like we were economists at the count of Economic Advisors.
• 6:33
  Speaker 1: We had to cut things out of the newspaper and
• 6:35
  Speaker 1: do analysis, and then he role played being the president
• 6:39
  Speaker 1: and we had do presentations. I got to when he
• 6:43
  Speaker 1: um when I was at the Council of Economic Advisors,
• 6:46
  Speaker 1: he came to visit in d C. And I got
• 6:48
  Speaker 1: to take him on a tour of the Oval Office.
• 6:51
  Speaker 1: So to me, it was just this really special connection
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  Speaker 1: from how I fell in love with economics as an
• 6:55
  Speaker 1: undergraduate and then when I got to contribute as an
• 6:58
  Speaker 1: economist to the policy world. Huh. Quite interesting. You were
• 7:04
  Speaker 1: also a section chief the Division of Consumer and Community
• 7:08
  Speaker 1: Affairs at the FED. What does that mean exactly? What
• 7:12
  Speaker 1: is the role of a section chief? Right? So, in
• 7:14
  Speaker 1: my last two years as a fellow Reserve, I was
• 7:17
  Speaker 1: a section in chief for a research section and the
• 7:20
  Speaker 1: Division of Consumer and Community Affair. There were a lot
• 7:23
  Speaker 1: of things unique about that because I had moved at
• 7:25
  Speaker 1: that point out of a quote unquote economics division. So
• 7:29
  Speaker 1: the team that I managed were the only economists doing
• 7:34
  Speaker 1: economic research in that whole division. So to me, it
• 7:37
  Speaker 1: was very eye opening. I worked with attorneys, I worked
• 7:40
  Speaker 1: with policy analysts, and they were all really impressive. The
• 7:45
  Speaker 1: division focuses on low and moderate incomes families and communities.
• 7:49
  Speaker 1: So they were from the very beginning ahead of the
• 7:52
  Speaker 1: game in terms of thinking about diversity and inclusion and
• 7:56
  Speaker 1: racial injustice and educational disparity in rural versus urban. So
• 8:03
  Speaker 1: that that was a really good experience for me. Back
• 8:05
  Speaker 1: to what it means to be a section chief. So
• 8:08
  Speaker 1: it is widely known that the section chief is the
• 8:11
  Speaker 1: worst job or the hardest job, and the only one
• 8:14
  Speaker 1: that comes closed is being a division director. So right,
• 8:17
  Speaker 1: that's the very top of the house, and the section
• 8:19
  Speaker 1: chief is the first manager job the board. Now it
• 8:23
  Speaker 1: didn't when I joined the board, but the board now
• 8:25
  Speaker 1: has very intensive management training for section chiefs or anyone
• 8:30
  Speaker 1: who starts as a group manager, which is like one
• 8:32
  Speaker 1: level down. So anyone who's supervising goes to a manager
• 8:38
  Speaker 1: boot camp. It was like three months, every other week,
• 8:41
  Speaker 1: three hours, uh, and that was really good. They brought up,
• 8:44
  Speaker 1: brought in external consultants. I learned a lot from that.
• 8:48
  Speaker 1: I learned a lot from my team, especially the research assistant,
• 8:51
  Speaker 1: in how to be a good manager. Now, it won't
• 8:55
  Speaker 1: surprise anyone, and this isn't just at the board. You
• 8:58
  Speaker 1: get promoted because you're good at doing the job you
• 9:01
  Speaker 1: started with, like I was I've made Section chief because
• 9:04
  Speaker 1: I'm a very good economist and I could lead my
• 9:07
  Speaker 1: team on their economic policy work. That didn't mean I
• 9:11
  Speaker 1: knew anything about being a manager, and they don't teach
• 9:14
  Speaker 1: us that in the PhD doctoral programs, and often they
• 9:16
  Speaker 1: teach us what not to do as a manager. UM
• 9:19
  Speaker 1: So that was a really hard year. That was like
• 9:22
  Speaker 1: my impostor syndrome year, on par with that year in
• 9:25
  Speaker 1: two thousand and eight when I was like, oh my gosh,
• 9:27
  Speaker 1: I'm supposed to forecast the US economy in crisis. So
• 9:30
  Speaker 1: it was a very different time and I handled it
• 9:32
  Speaker 1: weight better than two thousand eight. But it's a tricky job,
• 9:36
  Speaker 1: and it's one where the board helps us do a
• 9:39
  Speaker 1: good job now. But if you don't do a good job,
• 9:42
  Speaker 1: you can not only have a team that's not effective
• 9:45
  Speaker 1: at doing policy work, you can really damage people. And
• 9:49
  Speaker 1: we don't want to do that because that doesn't help
• 9:51
  Speaker 1: any We're going to talk more about that and how
• 9:54
  Speaker 1: the UM field, especially the academic programs, not only do
• 9:59
  Speaker 1: they not teach management, they really don't teach writing. They
• 10:03
  Speaker 1: don't teach a lot of skills that would be helpful.
• 10:06
  Speaker 1: So but we'll come back to that. What also makes
• 10:10
  Speaker 1: you a little unusual as an economist is you are
• 10:13
  Speaker 1: pretty active on Twitter and you maintain an active blog,
• 10:17
  Speaker 1: as do I. Why are you uh using these platforms?
• 10:23
  Speaker 1: Tell us what an economist gets out of participating in
• 10:27
  Speaker 1: social media. So I joined the platforms Twitter. The blogging
• 10:33
  Speaker 1: came later. Uh my gateway quote unquote drug to economic
• 10:37
  Speaker 1: social media was commenting on economic blogs like marginal Revolution,
• 10:42
  Speaker 1: money illusion. Um, that was really how I dipped my
• 10:46
  Speaker 1: toe in the water there Twitter. I spent time on it.
• 10:51
  Speaker 1: The reason I went to Twitter was because after I'd
• 10:54
  Speaker 1: had some difficult periods at the board and also was
• 10:58
  Speaker 1: trying to figure out how are all these smart, caring colleagues, Like,
• 11:04
  Speaker 1: how are we missing it that the recovery from the
• 11:06
  Speaker 1: Great Recession is going to be really slow? I like,
• 11:09
  Speaker 1: our staff forecast was consistently too strong, and I and
• 11:13
  Speaker 1: there were others were consistently saying, what are you thinking?
• 11:17
  Speaker 1: There's no way we have families that are absolutely decimated
• 11:21
  Speaker 1: from this recession. And so for me that moment and
• 11:25
  Speaker 1: then reflecting back, remember I showed up in the summer
• 11:28
  Speaker 1: of two thousand and seven reflecting back, and I was like,
• 11:31
  Speaker 1: how did we miss this right, Like, there's all these
• 11:34
  Speaker 1: people and that was a moment where I said, Okay,
• 11:39
  Speaker 1: maybe it's because we don't have enough diverse voices, we're
• 11:43
  Speaker 1: not connected enough to reality. And well Twitter has got
• 11:48
  Speaker 1: a lot of diverse voices, right, So I went on
• 11:51
  Speaker 1: to econ Twitter. I like to as it would be
• 11:55
  Speaker 1: apparent to anyone who knows me, I like to talk
• 11:58
  Speaker 1: to people. I like people. I like people that are
• 12:00
  Speaker 1: a little prickly. I mean, I'm a macro economist, right like,
• 12:04
  Speaker 1: so I went there to hear from people who don't
• 12:08
  Speaker 1: they're not inside the building, and frankly, it's probably a
• 12:10
  Speaker 1: good idea, Like some of them would be absolutely horrible
• 12:13
  Speaker 1: macro forecasters at the board. But that was for me
• 12:16
  Speaker 1: very important. Now that was my upside. No one at
• 12:21
  Speaker 1: the board saw that as an upside, right, and I
• 12:24
  Speaker 1: was a walking downside risk within a very short time
• 12:29
  Speaker 1: of being on Twitter. It's very good about it. I
• 12:32
  Speaker 1: don't talk about monetary policy, but I was linked to
• 12:35
  Speaker 1: things on the board's website like Bernankee gave us speed
• 12:39
  Speaker 1: and Da Da Da Da. So I got found out
• 12:43
  Speaker 1: by public affairs because I was driving traffic to the
• 12:47
  Speaker 1: board's website and yeah, and it was bad. And I
• 12:51
  Speaker 1: got called to an off site coffee that was basically like,
• 12:54
  Speaker 1: what is wrong with you? You were the only staff
• 12:57
  Speaker 1: economist talking about economics on Twitter. And the reward for
• 13:02
  Speaker 1: that is I had all of public if not all,
• 13:04
  Speaker 1: I had Michelle Smith and several other public affairs people
• 13:08
  Speaker 1: following me on Twitter when I would do something that
• 13:11
  Speaker 1: they felt was a miss step. Even I've never broke
• 13:15
  Speaker 1: like ah, I never talked about um information that wasn't
• 13:19
  Speaker 1: public like forecast information. But I would get within a
• 13:23
  Speaker 1: half an hour a call from my division director or
• 13:25
  Speaker 1: via my boss saying you got you can't do that.
• 13:28
  Speaker 1: You gotta do you know. And so there was this
• 13:31
  Speaker 1: aspect of surveillance, which I get, Like Michelle Smith, public
• 13:35
  Speaker 1: affairs at the Board has such a hard job, and
• 13:39
  Speaker 1: every once in a while I stepped in their lane.
• 13:41
  Speaker 1: I never meant to like, how how dare you promote
• 13:45
  Speaker 1: something that we've hidden in public view on our publicly
• 13:49
  Speaker 1: accessible website. Yeah. No. And when my last year at
• 13:53
  Speaker 1: the FED, and I really thought, because Howell like loves Twitter,
• 13:58
  Speaker 1: right when he was a brand a governor, I was
• 14:00
  Speaker 1: in his office with another economist he wanted to understand
• 14:03
  Speaker 1: like labor markets superstar effect. We went and talked to
• 14:06
  Speaker 1: him at the end of the meeting. He looked at
• 14:08
  Speaker 1: me and he's like, oh, yeah, you had a really
• 14:10
  Speaker 1: big day. And I'm like, well, duh, I'm here, you know,
• 14:13
  Speaker 1: breathing a governor and he's like, no, it's Smiths retweeted
• 14:17
  Speaker 1: you on Twitter. I over I know no, because I
• 14:22
  Speaker 1: was like, you're on Twitter and you followed Noah and
• 14:26
  Speaker 1: you were on Twitter during the day, right. So I
• 14:29
  Speaker 1: was just blown. When he became chair, I thought, oh,
• 14:32
  Speaker 1: Twitter is gonna be okay. Yeah, that was wrong. Um.
• 14:37
  Speaker 1: So I got in trouble two more times because Poal
• 14:40
  Speaker 1: read one of my tweets and asked about it and
• 14:42
  Speaker 1: he shouldn't be learning anything from my tweets, so I
• 14:44
  Speaker 1: was told. And twice I got in trouble for linking
• 14:47
  Speaker 1: to the distributional financial accounts on the board's website because
• 14:50
  Speaker 1: they didn't want attention drawn to it. And I was
• 14:52
  Speaker 1: always like, you know, the board's website is the best
• 14:54
  Speaker 1: place to put information you don't want anyone to see. Um,
• 14:58
  Speaker 1: but that's hilarious. I love the board. I understand much
• 15:03
  Speaker 1: better than I did in the beginning why what I
• 15:06
  Speaker 1: was doing could be problematic. And I never never wanted
• 15:11
  Speaker 1: to be the person who brought down the bed right
• 15:15
  Speaker 1: or cause immense stress. I was just having fun, and
• 15:20
  Speaker 1: like I said, I was trying to learn from people
• 15:23
  Speaker 1: who weren't like anybody else that was in the building.
• 15:26
  Speaker 1: That's so funny that, by the way, bringing down the
• 15:28
  Speaker 1: FED is Judy Shelton's job. It's not Clodius Tom's job.
• 15:31
  Speaker 1: So we can leave that, we can leave that to home.
• 15:34
  Speaker 1: I'm coming now, I know. That's why I'm sticking my
• 15:38
  Speaker 1: two bits in. And by the way, my economics gateway
• 15:42
  Speaker 1: drug was Brad DeLong, the economist from Berkeley, and he
• 15:47
  Speaker 1: was one of the earliest academic bloggers, just musing in
• 15:52
  Speaker 1: public on a blog and discussing economic data. And it
• 15:56
  Speaker 1: was so refreshing compared to the sort of stayed releases
• 16:02
  Speaker 1: from BLS and even back then the Wall Street economists
• 16:06
  Speaker 1: were very, very tame, and to have someone come out
• 16:09
  Speaker 1: and just like boom, here's what's wrong with the data
• 16:14
  Speaker 1: analysis was really a refreshing change of pace. Yeah, and
• 16:18
  Speaker 1: I will say there are two things that I really
• 16:21
  Speaker 1: like about Brad DeLong on Twitter, Like I liked him
• 16:23
  Speaker 1: off Twitter. I've learned a lot from him. One he
• 16:26
  Speaker 1: is an economic history why he has a good grounding
• 16:29
  Speaker 1: in economic history, that's not the only thing he works.
• 16:32
  Speaker 1: And he does a lot in macro space. To his blog,
• 16:35
  Speaker 1: I mean he was like live tweeting World War two
• 16:38
  Speaker 1: or you know, I mean like it would have it
• 16:40
  Speaker 1: showed a side of him that was like not like
• 16:44
  Speaker 1: an economy that you wouldn't have seen this in an
• 16:47
  Speaker 1: economic seminar. The other thing that Brad does on Twitter,
• 16:51
  Speaker 1: which is very rare, is that he engages with people,
• 16:56
  Speaker 1: like he will reply to tweets. Have I looked on
• 17:00
  Speaker 1: from Paul Krubin's Twitter feed, and I Paul like does
• 17:03
  Speaker 1: so much in terms of communicating economics and pushing us
• 17:07
  Speaker 1: to think and pushing a broader audience. He never replies
• 17:11
  Speaker 1: to tweets, like never, So I like Brad that he
• 17:15
  Speaker 1: engages like I like to engage. So that to me
• 17:19
  Speaker 1: is like econ Twitter can be a special place, but
• 17:22
  Speaker 1: it's hard if it's a lecture and not a conversation. Huh.
• 17:27
  Speaker 1: Quite fascinating. So let's talk a little bit about fiscal stimulus.
• 17:32
  Speaker 1: You know, when we look back at the financial crisis
• 17:34
  Speaker 1: of oh eight oh nine. The vast majority of that
• 17:38
  Speaker 1: response seemed to be coming from the Federal Reserve and
• 17:41
  Speaker 1: a monetary ast response, not a fiscal stimulus compared to
• 17:47
  Speaker 1: this one, How would you do a side by side
• 17:51
  Speaker 1: comparison between two thousand and eight and on a fiscal basis.
• 17:58
  Speaker 1: So I have done a lot of work thinking about
• 18:02
  Speaker 1: how compares to two thousand and eight, And the reason
• 18:08
  Speaker 1: for that is I had a very unique experience at
• 18:12
  Speaker 1: the Board in terms of understanding what happened in two
• 18:16
  Speaker 1: thousand and eight and the years after that. And it
• 18:20
  Speaker 1: may is the encounterintuitive. So I covered consumer spending at
• 18:25
  Speaker 1: the Federal Reserve. I didn't advise on monetary policy. What
• 18:31
  Speaker 1: my job was to do was say, Okay, what's going
• 18:33
  Speaker 1: to happen, what is happening for families and they're spending
• 18:38
  Speaker 1: in the economy. To do that during the crisis and
• 18:42
  Speaker 1: during the recovery, I had to understand and have an opinion,
• 18:46
  Speaker 1: expert opinion on what is fiscal relief doing or fiscal
• 18:49
  Speaker 1: stimulus doing in the economy. Because then the Board in
• 18:53
  Speaker 1: the monetary policy, they work around the edges. They need
• 18:57
  Speaker 1: to know what we think is happening in the economy,
• 18:59
  Speaker 1: and part of that is what is Congress doing? And
• 19:02
  Speaker 1: so not only did I follow the data in real time,
• 19:07
  Speaker 1: I would update my forecast as the data came in.
• 19:10
  Speaker 1: This is a very unique UH expertise and experience for
• 19:14
  Speaker 1: a macro economist to have. Academics do not do this
• 19:18
  Speaker 1: right and people at the board do and I learned
• 19:21
  Speaker 1: very well. So in addition to that, I started a
• 19:25
  Speaker 1: research program with Matthew Shapiro, who was my advisor at Michigan,
• 19:30
  Speaker 1: and Joel Slemrod, who's also a professor there. They had
• 19:34
  Speaker 1: a prior research program studying the changes in tax withholding
• 19:40
  Speaker 1: the two thousand one rebates they had me joined this product,
• 19:44
  Speaker 1: this research program of THEIRS in two thousand eight. We
• 19:47
  Speaker 1: did research and ran surveys on the two thousand eight
• 19:51
  Speaker 1: tax rebates, the two thousand nine and ten Making Work
• 19:55
  Speaker 1: pay tax credit, and the two thousand eleven and two
• 19:57
  Speaker 1: thousand twelve payroll tax cut. Fast forward to last year,
• 20:03
  Speaker 1: I contributed to a volume called Recession Ready that the
• 20:07
  Speaker 1: Hamilton's Project of Brookings and Equitable Growth Right Now Work
• 20:11
  Speaker 1: oversaw the volume. I had a chapter on individual payments
• 20:16
  Speaker 1: that would happen automatically in a recession. I from my
• 20:21
  Speaker 1: expertise that it's got to be big direct payments to
• 20:25
  Speaker 1: household This little divvy debby changing with holdings. This is
• 20:30
  Speaker 1: not a good way to find a recession. It doesn't
• 20:33
  Speaker 1: help families fast enough, and they don't even know what
• 20:36
  Speaker 1: happens like still stimulus, Like I don't know much about politics,
• 20:40
  Speaker 1: but I know enough to know that probably won't help
• 20:43
  Speaker 1: you a lot in terms of saying, you know, Congress,
• 20:46
  Speaker 1: the President saying we help the American people. So I
• 20:50
  Speaker 1: took my forecasting expertise, my research knowledge, and the research
• 20:56
  Speaker 1: knowledge from a lot of other people who work in
• 20:59
  Speaker 1: this space. One of the things that the board because
• 21:01
  Speaker 1: you don't put your forecast together. You don't walk into
• 21:04
  Speaker 1: the boardroom and say, I think this is the right
• 21:08
  Speaker 1: thing to do, or this is the right way to
• 21:09
  Speaker 1: think about the economy. And here's my research paper, right
• 21:13
  Speaker 1: like you come in with here's my paper, here's three
• 21:16
  Speaker 1: other papers, here's how they agree, here's how they disagree,
• 21:20
  Speaker 1: like and so these were again skills that a lot
• 21:23
  Speaker 1: of economists don't have. But that's what I've put into
• 21:26
  Speaker 1: my chapter. And in addition, I said, we know the
• 21:30
  Speaker 1: two thousand eight in particular, worked really well, like that's
• 21:34
  Speaker 1: the way to do it. And and then the add
• 21:37
  Speaker 1: on was me thinking about, well, how will we do
• 21:39
  Speaker 1: that automatically? And the reason that I had it automatic
• 21:44
  Speaker 1: and I had also my proposal in a severe recession,
• 21:48
  Speaker 1: not every recession is severe, but in our severe recession,
• 21:51
  Speaker 1: those payments would happen automatically on a repeated basis until
• 21:56
  Speaker 1: the unemployment rate came down. And that was born out
• 22:01
  Speaker 1: of a very painful experience, because I have a very
• 22:04
  Speaker 1: emotional reaction to the macro economy. It came from a
• 22:07
  Speaker 1: painful experience in two thousand and twelve when the payroll
• 22:10
  Speaker 1: tax cut stopped and there wasn't anything else that went
• 22:15
  Speaker 1: to a large number of families, and the unemployment rate
• 22:19
  Speaker 1: was still high. So I knew from fiscal policy that
• 22:23
  Speaker 1: they stepped away. I mean, they're the politicians. I'm not,
• 22:26
  Speaker 1: but they made a decision that it was time to
• 22:30
  Speaker 1: stop the fiscal relief and in fact they cut back
• 22:33
  Speaker 1: on government spending that had a lot of damage the economy.
• 22:37
  Speaker 1: Are last recovery was very long, but that's actually a
• 22:40
  Speaker 1: bad sign in some ways because it took us so
• 22:43
  Speaker 1: long to get the unemployment right down. And that was
• 22:47
  Speaker 1: the fiscal policy stepped away, and frankly, monetary policy did
• 22:51
  Speaker 1: not step up enough in the recovery. Like they didn't
• 22:55
  Speaker 1: save Main Street, they saved Wall Street. There were political
• 23:01
  Speaker 1: existential risks to the FED that are why they justified,
• 23:06
  Speaker 1: at least internally or in my impression, the like not
• 23:11
  Speaker 1: going all in on Main Street. But it it hurts people, right,
• 23:15
  Speaker 1: so I knew, like the Fed really can't do this
• 23:18
  Speaker 1: in some ways they really shouldn't. But the Congress not
• 23:21
  Speaker 1: only can, but they have to. And that is what
• 23:24
  Speaker 1: has been so hard right now, Like last week when
• 23:29
  Speaker 1: the extra six d a week to the unemployed expired,
• 23:33
  Speaker 1: that is going to hurt so many families this year.
• 23:36
  Speaker 1: And that program should have been and could have been
• 23:40
  Speaker 1: on autopilot, and it was. So let's talking the fallout.
• 23:45
  Speaker 1: So let's talk about that program. When Congress passed the
• 23:49
  Speaker 1: Cares Act, they sent a check to everybody making I
• 23:54
  Speaker 1: think it was less than dollars if memory serves, plus
• 23:58
  Speaker 1: five dollars per dependent and then a six hundred dollar
• 24:04
  Speaker 1: was that a a weekly or monthly unemployment bonus? How
• 24:09
  Speaker 1: much weekly? So? And and that's based roughly on the
• 24:13
  Speaker 1: median income across the country. So so that's quite a
• 24:18
  Speaker 1: substantial fiscal stimulus or or is it not. What do
• 24:21
  Speaker 1: you think of those six hundred plus extending unemployment plus
• 24:26
  Speaker 1: five hundred per dependent on a one time check plus
• 24:29
  Speaker 1: twelve hundred on a one part check. How would you
• 24:32
  Speaker 1: rate that fiscal stimulus and what was the impact in
• 24:36
  Speaker 1: the economy in a period where the I think that
• 24:39
  Speaker 1: at its worst the Atlanta GDP now then they're now
• 24:43
  Speaker 1: casting tool had GDP contracting at fift not on an
• 24:49
  Speaker 1: annual basis, but when they happen to take that snapshot
• 24:52
  Speaker 1: at the worst part of the economic contraction, the economy
• 24:57
  Speaker 1: was effectively cut in half. So I did not sleep
• 25:03
  Speaker 1: the night of the vote in the Senate until they
• 25:06
  Speaker 1: passed it, which I think men. I stayed up until
• 25:09
  Speaker 1: like one am or something the next day. And the
• 25:11
  Speaker 1: reason is by the time it got to the Senate,
• 25:15
  Speaker 1: I knew this was really good for families and the unemployed.
• 25:20
  Speaker 1: I mean, frankly, I was shocked that the six d
• 25:23
  Speaker 1: dollars a week made it through, and it almost didn't
• 25:26
  Speaker 1: Like the Senate Republicans, there was a group that woke
• 25:28
  Speaker 1: up and they're like, that is a lot of money, right,
• 25:31
  Speaker 1: and so especially given what the base benefits to the
• 25:34
  Speaker 1: unemployed would be now as a macro economist, so setting
• 25:39
  Speaker 1: aside how I feel about families and the unemployed as
• 25:42
  Speaker 1: a macro economist, this was huge because they passed it
• 25:46
  Speaker 1: in March. I mean it took later, longer than the Fed.
• 25:50
  Speaker 1: But my goodness for Congress, they really moved right, so
• 25:54
  Speaker 1: they moved fast. The rebates I mean, honestly, the rebates
• 25:58
  Speaker 1: were better than what I had for a posed in
• 26:00
  Speaker 1: my chapter because I didn't think it was possible. They
• 26:03
  Speaker 1: are huge. They are twice and I think they should be.
• 26:06
  Speaker 1: I'm not saying this was a bad thing. The benefits,
• 26:10
  Speaker 1: the relief that went out in these direct payments is
• 26:13
  Speaker 1: like twice in generosity what happened in two thousand eight.
• 26:18
  Speaker 1: And in addition, the eligibility is expanded. Basically anybody with
• 26:24
  Speaker 1: a SO Security number has a claim on those checks.
• 26:28
  Speaker 1: And the Treasury did things that sped up the delivery
• 26:32
  Speaker 1: relative to two thousand eight. And I mean they said
• 26:35
  Speaker 1: up a website where you could go and put your
• 26:38
  Speaker 1: payment information in if you hadn't filed taxes. Now, it
• 26:41
  Speaker 1: was not perfect. Some people got checked that didn't need them.
• 26:46
  Speaker 1: I mean, honestly, a over well over eight of the
• 26:50
  Speaker 1: US population, like not even adults, but the population got
• 26:54
  Speaker 1: some money from those rebates. That is just like wow. Anyway,
• 27:00
  Speaker 1: And the thing is is they got it out fast,
• 27:02
  Speaker 1: like the rebates were. In my opinion, the rebates were
• 27:05
  Speaker 1: the best administered piece of the entire Cares Act. I'm
• 27:09
  Speaker 1: not thinking they were the most important. Like the aid
• 27:12
  Speaker 1: that went to the most hurt, like the unemployed, that
• 27:15
  Speaker 1: was that's really like, we have to help the people
• 27:18
  Speaker 1: who are hurting the most. The thing is, in March,
• 27:21
  Speaker 1: we didn't know who was all going to get hurt,
• 27:23
  Speaker 1: like the American people were really scared. So it helps.
• 27:27
  Speaker 1: And one last thing about the six hundred dollars, there's
• 27:30
  Speaker 1: been a lot of discussions that that extra money is
• 27:34
  Speaker 1: holding people back from going back to work. I know
• 27:37
  Speaker 1: small business owners, even in my own family, who have
• 27:40
  Speaker 1: had a difficult time rehiring workers to do work in
• 27:46
  Speaker 1: like service industry job because they're like, well, why should
• 27:49
  Speaker 1: I go back. I'm getting more every week than I
• 27:52
  Speaker 1: would doing your job, and that is legitimate, and yet
• 27:57
  Speaker 1: for many many workers, the problem is their employers don't
• 28:01
  Speaker 1: need them back because nobody's in the store or not enough.
• 28:05
  Speaker 1: And so like that extra money, the unemployed are spending
• 28:08
  Speaker 1: it right, and so it is pumping demand in the
• 28:11
  Speaker 1: economy that needs it, and it is going away. What
• 28:15
  Speaker 1: do you make of the Yale study that said, when
• 28:17
  Speaker 1: we look at people who are receiving the six D
• 28:20
  Speaker 1: dollar benefit and those who are not, they are both
• 28:24
  Speaker 1: returning back to the workforce in the same numbers. So
• 28:29
  Speaker 1: at this point there are various research studies and and
• 28:34
  Speaker 1: this is this is coming from academics, this is coming
• 28:37
  Speaker 1: from policy analysts. I've done work in this space. Also
• 28:42
  Speaker 1: that that money that support is mattering and it is
• 28:47
  Speaker 1: not holding back the economy. Now, there will be a point,
• 28:52
  Speaker 1: in my expert opinion, as the unemployment rate comes down
• 28:55
  Speaker 1: and jobs become more plentiful, that we should think hard
• 28:58
  Speaker 1: about our were paying are not paying? Are we giving
• 29:02
  Speaker 1: people more money than they normally would have gotten? The
• 29:06
  Speaker 1: very important piece out of the study I saw it
• 29:09
  Speaker 1: yesterday that I'm sorry, I'm not going to attribute it correctly,
• 29:12
  Speaker 1: but they showed that in past recessions what enhanced benefits,
• 29:17
  Speaker 1: and in that case it was the extended durations being
• 29:19
  Speaker 1: able to stay on longer than twenty six weeks. It
• 29:22
  Speaker 1: showed that it allowed people the time to go get
• 29:25
  Speaker 1: a job again that was commensurate with their skills, and
• 29:29
  Speaker 1: that was particularly important for people in disadvantaged groups, so
• 29:34
  Speaker 1: people of color, the less educated, and women. So we
• 29:38
  Speaker 1: don't want people to go back too fast because they'll
• 29:41
  Speaker 1: get in jobs that aren't the right jobs for them.
• 29:42
  Speaker 1: And right now, oh my goodness, a lot of these
• 29:44
  Speaker 1: jobs are not safe. So we want to make sure
• 29:48
  Speaker 1: that we don't kill people. Right So there's six hundred
• 29:51
  Speaker 1: dollars right now, makes a lot of sense reasonable people.
• 29:55
  Speaker 1: When we get five years into this and unemployment rate
• 29:58
  Speaker 1: of six percent, then let's talked about it. And I
• 30:01
  Speaker 1: am in the group that thinks we should phase it
• 30:04
  Speaker 1: down automatically as the unemployment rate comes down. Oh, I
• 30:09
  Speaker 1: like the idea of using a metric to UH to
• 30:12
  Speaker 1: make that determination and taking it out of the political realm.
• 30:16
  Speaker 1: Last question on unemployment and these fiscal stimulus in these checks.
• 30:22
  Speaker 1: We're recording this in the first weekend of August. There
• 30:26
  Speaker 1: is no deal yet for the Cares Act renewal. What
• 30:31
  Speaker 1: do you think would be appropriate for Congress to pass
• 30:36
  Speaker 1: relative to unemployment and another one off check or not.
• 30:43
  Speaker 1: I want Congress to pass a new relief package that
• 30:47
  Speaker 1: is between four and six trillion dollars. I am not
• 30:51
  Speaker 1: expecting to get that. I truly believe, in my expert
• 30:55
  Speaker 1: opinion that they need to go big again and they
• 31:00
  Speaker 1: need to do what works. So I just I want
• 31:02
  Speaker 1: Treasure to just push the button again and send out
• 31:05
  Speaker 1: those checks we would have for people who have direct deposits.
• 31:09
  Speaker 1: They would have that money within a week of Congress
• 31:13
  Speaker 1: approving it because the heavy lifting of putting together a
• 31:16
  Speaker 1: file of who gets the check, where's their bank account?
• 31:20
  Speaker 1: That file exists. So if you do it exactly like
• 31:23
  Speaker 1: you did last time, it goes really fat. So yeah,
• 31:27
  Speaker 1: that is good. I want to see the unemployment benefits continue,
• 31:33
  Speaker 1: just like I said, tie them to the economy, keep
• 31:35
  Speaker 1: them where they are right now. Especially the six dollars
• 31:38
  Speaker 1: is so big because when the Cares Act was past,
• 31:41
  Speaker 1: we were in a pandemic. We did not expect to
• 31:45
  Speaker 1: be in a pandemic now, but we are now. I
• 31:48
  Speaker 1: know from having I've been doing a lot of work
• 31:50
  Speaker 1: with a lot of different offices and members in Congress.
• 31:53
  Speaker 1: That's why I left the FED. Couldn't do that when
• 31:55
  Speaker 1: I was there. I spent Mother's Day weekend putting together
• 31:58
  Speaker 1: a cost estimate for the unemployment insurance, the enhanced benefits
• 32:03
  Speaker 1: time to the unemployment rate. Doing forecasters. I mean, there's
• 32:07
  Speaker 1: something I learned how to do it defense there are
• 32:08
  Speaker 1: not a lot of people that know how to do this,
• 32:11
  Speaker 1: and I came out with an estimate that was about
• 32:13
  Speaker 1: it was a little over two trillion. And the expensive
• 32:17
  Speaker 1: part of that is Congressional Budget Office and a lot
• 32:20
  Speaker 1: of forecasters think this is going to take a long time, right,
• 32:25
  Speaker 1: so the phase down of those benefits is going to
• 32:27
  Speaker 1: happen slowly, and that puts the big price tag on
• 32:31
  Speaker 1: Now the CBO, the Congressional Budget Office, doesn't do the
• 32:34
  Speaker 1: feedback effects. I think in the end it would really
• 32:37
  Speaker 1: cost the cost taxpayers less than two trillions because we
• 32:42
  Speaker 1: get the economy going faster. But at the end of
• 32:45
  Speaker 1: the day, that's one reason it's a big ticket. One
• 32:47
  Speaker 1: more I'll say that I think is really important. Wait
• 32:50
  Speaker 1: before you move past that point, I just have to say,
• 32:54
  Speaker 1: you're describing the sort of supply side unemployment benefit where
• 33:01
  Speaker 1: it's cheaper than it looks because its own economic activity
• 33:05
  Speaker 1: is going to help pay for itself. Is that what
• 33:08
  Speaker 1: you're saying that's right. Well, in a wonky world, they
• 33:13
  Speaker 1: call this dynamic scoring, where Congressional Budget Office would take
• 33:17
  Speaker 1: into account of feedback. In this case, relief has positive
• 33:21
  Speaker 1: feedback effects definitely now. Right now, the Congressional Budget Office
• 33:27
  Speaker 1: can only do that kind of analysis for changes in taxes.
• 33:33
  Speaker 1: There's just something Congress decided. So you know, we can't
• 33:37
  Speaker 1: run this through and expect to get back a smaller score.
• 33:40
  Speaker 1: I have to make the argument, and others have that
• 33:43
  Speaker 1: we know it will help the economy. And if we
• 33:46
  Speaker 1: help the economy right now, it is a down payment
• 33:50
  Speaker 1: on the next few years being a lot better than
• 33:53
  Speaker 1: they look like they're headed to be. So let's talk
• 33:57
  Speaker 1: about the some rule a bit. When the three month
• 34:01
  Speaker 1: moving average of unemployment moves above its previous low, you
• 34:06
  Speaker 1: say we're in recession. Tell us why that is. So,
• 34:11
  Speaker 1: it's just it's an empirical regularity, right. I spent a
• 34:15
  Speaker 1: lot of time with a spreadsheet over weekends. Again, this
• 34:19
  Speaker 1: was in part to do my proposal of automatic payments
• 34:22
  Speaker 1: to people like you gotta know when to send out
• 34:24
  Speaker 1: hundreds of billions of dollars, right, You don't particularly want
• 34:27
  Speaker 1: to mess that up. And I knew, and this is
• 34:31
  Speaker 1: a principle that Federal Reserve economists, no people on Wall
• 34:36
  Speaker 1: Street know that a small increase in the unemployment rate
• 34:40
  Speaker 1: is a bad sign. Now, I wanted to really understand
• 34:44
  Speaker 1: when it's accurate and when it's in a recession. The
• 34:49
  Speaker 1: Federal Reserve has a rule of thumb, which I did check.
• 34:53
  Speaker 1: After they called this assomb rule. I asked one of
• 34:55
  Speaker 1: my former bosses. I'm like, did I scoop the board's rule?
• 34:58
  Speaker 1: Like I do not want to, because we'll rename it
• 35:00
  Speaker 1: will be the FED rule, right, And he said no.
• 35:03
  Speaker 1: The internal rules the FED was a three tents increase
• 35:07
  Speaker 1: in the unemployment rate, and that happens ahead of recessions.
• 35:12
  Speaker 1: And I know one time in two thousands three, because
• 35:15
  Speaker 1: I tried everything under the sun when I came up
• 35:17
  Speaker 1: with my rule, that it triggered and it was a
• 35:20
  Speaker 1: false positive, right, because that small increase happened in that
• 35:24
  Speaker 1: jobless recovery, it didn't end up being considered a recession.
• 35:27
  Speaker 1: So three tents was the rule. It makes sense for
• 35:29
  Speaker 1: the FED because monetary policy wants to get ahead of
• 35:33
  Speaker 1: the game if it can, because it often is believed
• 35:36
  Speaker 1: that it acts with the lags you know, if you're
• 35:38
  Speaker 1: lowering interest rates, and frankly, if they cut a quarter
• 35:41
  Speaker 1: point and it is an actually a recession, like they'll
• 35:44
  Speaker 1: pat themselves on the back and it's not like, you know,
• 35:47
  Speaker 1: taxpayers have just lost three hundred billion dollars of their money,
• 35:50
  Speaker 1: quote unquote. So I had a different goal because mine
• 35:54
  Speaker 1: was about what Congress does. And so I found a
• 35:58
  Speaker 1: rule that always triggered within the first few months of
• 36:02
  Speaker 1: a recession. And I also believe that the indicator I
• 36:08
  Speaker 1: use is such a good one because it is the
• 36:12
  Speaker 1: reason that we hate recessions and we fight back. It
• 36:15
  Speaker 1: is people losing their jobs. Those people, especially in a recession,
• 36:21
  Speaker 1: especially if it takes well to get a new job,
• 36:23
  Speaker 1: they will pay for that in terms of their careers
• 36:26
  Speaker 1: and their families will pay for it for a very
• 36:30
  Speaker 1: long time. So to me, it's a widely followed statistic.
• 36:33
  Speaker 1: It makes a lot of sense. It's a federal reserve.
• 36:37
  Speaker 1: They also use things called regimes switching factor models. I
• 36:40
  Speaker 1: am not taking that to Congress, like, this is not
• 36:43
  Speaker 1: what you want to have, you know, money, but at
• 36:45
  Speaker 1: a futtal reserve. I mean, you ought to use everything
• 36:47
  Speaker 1: under the sun to understand the macro economy. You have
• 36:51
  Speaker 1: to have a simple rule if you want to put
• 36:55
  Speaker 1: fiscal policy on autopilot. So to me, it was a
• 36:58
  Speaker 1: great rule in my chap her is called a recession indicator.
• 37:01
  Speaker 1: When I showed up at the launch event for the
• 37:03
  Speaker 1: book and they started calling the somb rule, I was
• 37:06
  Speaker 1: very uncomfortable, and to the point that after the event,
• 37:11
  Speaker 1: I went and talked to Christie Romer. I wanted to
• 37:13
  Speaker 1: talk to her about some physcal stimula. She was one
• 37:15
  Speaker 1: of the main panelists, and I said, I'm so uncomfortable
• 37:19
  Speaker 1: with the som rule thing. And she looked at me
• 37:21
  Speaker 1: and she's like, Claudia, you have got to own this.
• 37:24
  Speaker 1: Any man would And I was like, okay, Christie is
• 37:28
  Speaker 1: my hero. I would listen to Christie what I learned
• 37:30
  Speaker 1: Since then, and I've joked a little bit about this
• 37:33
  Speaker 1: and ribbed some people online like Bill Dudley that owning
• 37:38
  Speaker 1: it actually meant I had to defend it, right, because again,
• 37:42
  Speaker 1: this principle is there and it was great and it
• 37:44
  Speaker 1: was important for me to understand like the intellectual history
• 37:48
  Speaker 1: of it. But like I already did um anyways, but
• 37:52
  Speaker 1: I am thrilled and I always tell the people that
• 37:54
  Speaker 1: are like, oh, well, we knew this and that that,
• 37:57
  Speaker 1: And I was like, but if everybody in the world
• 38:00
  Speaker 1: new it, it wouldn't be in the Bloomberg terminals, in
• 38:03
  Speaker 1: haveor in Fred's with my name. So maybe I wasn't
• 38:08
  Speaker 1: like the person who thought the big thought. I think
• 38:11
  Speaker 1: I did not think the big thoughts, and yet I
• 38:14
  Speaker 1: got it out to the world. And to me, that's important.
• 38:18
  Speaker 1: And I've spent a lot of time with Congress trying
• 38:21
  Speaker 1: to help them understand why this is such a good
• 38:24
  Speaker 1: thing to do. So let me let me push back
• 38:28
  Speaker 1: on your um false modesty, I'll call it. There was
• 38:32
  Speaker 1: a Wall Street Art Wall Street Journal article. I love
• 38:35
  Speaker 1: this headline quote, are we in a recession? Experts agree?
• 38:40
  Speaker 1: Ask Claudius some So that is quite a m accolade
• 38:46
  Speaker 1: in the journal. I would have that on my wall
• 38:48
  Speaker 1: in my office. What sort of pushback did you get
• 38:52
  Speaker 1: to that that article? And I'm curious was it intellectual
• 38:58
  Speaker 1: pushback to the idea or was it pushed back to
• 39:02
  Speaker 1: who really owned authorship of it? So when I saw
• 39:09
  Speaker 1: that article and I was thrilled. Kate Davidson has been
• 39:14
  Speaker 1: such a booster of my career. So the response to
• 39:19
  Speaker 1: that well even my response when I when I saw
• 39:23
  Speaker 1: the headline is I was like, if you asked settle
• 39:27
  Speaker 1: reserved staff economists, I would not be the names that
• 39:32
  Speaker 1: they would bring out, right like, and I knew that,
• 39:35
  Speaker 1: and I knew it because you know, months before is
• 39:37
  Speaker 1: when the somber was born, and you know there had
• 39:41
  Speaker 1: been some attention to it. Like I just had people
• 39:45
  Speaker 1: that were really clear and not in a like mean way.
• 39:48
  Speaker 1: But there's the board is a very interesting place. There
• 39:53
  Speaker 1: are times and the summer was an example of many
• 39:57
  Speaker 1: the things that I know about the macro economy I
• 40:00
  Speaker 1: learned at the FED. Like it's it's the board right
• 40:02
  Speaker 1: where this kind of brain that passes along macro. Now
• 40:07
  Speaker 1: that meant that when I spoke out and this had
• 40:09
  Speaker 1: happened on Twitter, so I knew this was an issue.
• 40:12
  Speaker 1: It's like, well, it's not fair you get the credit
• 40:16
  Speaker 1: because you're speaking out and you learned it from everybody.
• 40:20
  Speaker 1: And I tried always be cognizant of that and give
• 40:25
  Speaker 1: credit where credit is due. Part of where credit is
• 40:28
  Speaker 1: due is with me, Like I'm the one that spent
• 40:30
  Speaker 1: weekends with this spreadsheet. I had someone contact me after,
• 40:37
  Speaker 1: you know, a friend, it's a FED contact me afterwards,
• 40:40
  Speaker 1: and he was like, so the spreadsheet, she said, it
• 40:43
  Speaker 1: was this massive spreadsheet. Seriously, this rule is so simple.
• 40:46
  Speaker 1: And I looked at him and I said, well, I
• 40:49
  Speaker 1: pulled all the real time data, which means that I
• 40:52
  Speaker 1: looked at all the data as people saw it at
• 40:55
  Speaker 1: that time, which is more complicated. And frankly, this man,
• 41:00
  Speaker 1: who I truly think as an amazing economist, he works
• 41:03
  Speaker 1: on the financial side of the FED. I work on
• 41:06
  Speaker 1: the real side. If I had asked him to do
• 41:09
  Speaker 1: the real time analysis, it would have taken him a
• 41:12
  Speaker 1: long time, right, But those are the kind of like, oh,
• 41:15
  Speaker 1: this is so simple. And it wasn't saying that I
• 41:18
  Speaker 1: didn't deserve it so much as we all deserved it,
• 41:22
  Speaker 1: like the whole staff, and like the staff from years before,
• 41:27
  Speaker 1: and you know, like as with Twitter, I I take
• 41:31
  Speaker 1: the risk of speaking out. So I don't know, but
• 41:35
  Speaker 1: I was used to this and I wasn't surprised. And honestly,
• 41:38
  Speaker 1: if I hadn't have been a FED forecaster, if I
• 41:41
  Speaker 1: hadn't spent a year at c A where finally early
• 41:43
  Speaker 1: in twenty six things were wobbly, right, so um and
• 41:48
  Speaker 1: I actually at the event tried to give the credit
• 41:50
  Speaker 1: off to Jason Furman, who then said, oh the fight,
• 41:53
  Speaker 1: this is more like Doug Elmendorff. And then Christie's like,
• 41:55
  Speaker 1: you have to stop, like this is you um anyway?
• 41:59
  Speaker 1: So it's interesting experience. I'm not really like, is this
• 42:04
  Speaker 1: a peculiarity of the FED? And what bothers me the
• 42:07
  Speaker 1: most about it is we knew. It's like the FED
• 42:11
  Speaker 1: knew for a long time. And what happened is when
• 42:14
  Speaker 1: I heard it with the world, the world didn't know.
• 42:20
  Speaker 1: Now that's quite that's quite interesting. If let me ask
• 42:23
  Speaker 1: you this question as an author, and I'll get off
• 42:26
  Speaker 1: of the some rule after this, was anyone in the
• 42:31
  Speaker 1: FED using the rule of thumb, three month average jobless
• 42:37
  Speaker 1: rate rising half a percent from a previous twelve month low?
• 42:41
  Speaker 1: Was that anywhere um on any FED sheets before you
• 42:45
  Speaker 1: publicized it in that format and with that conclusion no,
• 42:53
  Speaker 1: So then then then you get the authorship is the
• 42:59
  Speaker 1: principle there's no principle. There's no principle. The principle is
• 43:03
  Speaker 1: you wrote it, you created it. I'm I'm listen, you
• 43:07
  Speaker 1: know I'm gonna say this. I might as well say
• 43:09
  Speaker 1: it on the record instead of saying off the record.
• 43:11
  Speaker 1: When I first started blogging in the nineties and then
• 43:15
  Speaker 1: in the early two thousands, I was a guest. How
• 43:18
  Speaker 1: frequently I would write something on a blog and then
• 43:22
  Speaker 1: weeks later or a days later, see it show up
• 43:24
  Speaker 1: in a mainstream paper with no credit, no link, no citation,
• 43:30
  Speaker 1: just oh you like that idea? What do you think?
• 43:32
  Speaker 1: I'm your writing staff, I'm I'm I'm punching up your
• 43:35
  Speaker 1: your script. You just stole this. I mean sometimes it
• 43:39
  Speaker 1: was word for word. So I think if you create
• 43:42
  Speaker 1: something that has not been created before, even if other
• 43:46
  Speaker 1: people contribute to it, hey we're we're all standing on
• 43:49
  Speaker 1: the shoulders of giants. You were entitled to the to
• 43:53
  Speaker 1: the authorship credit not hereby deem the som rule. Officially yours.
• 43:58
  Speaker 1: I have that authority because I'm on the radio. Let's
• 44:01
  Speaker 1: talk about a fiery blog post you wrote a couple
• 44:04
  Speaker 1: of weeks ago titled economics is a disgrace, And I'm
• 44:09
  Speaker 1: going to suggest listeners go to macro mom and find
• 44:13
  Speaker 1: that blog post and it you make a number of
• 44:17
  Speaker 1: really interesting allegations, the first of which is economics research
• 44:23
  Speaker 1: replicable sixty published papers from thirteen generals say usually not
• 44:30
  Speaker 1: these various research papers were only able to replicate about
• 44:35
  Speaker 1: a third of previous research that was published in various
• 44:40
  Speaker 1: economic journals. What's wrong with the state of economic research today?
• 44:46
  Speaker 1: It says a lot of things about the field of research.
• 44:51
  Speaker 1: One that I didn't touch on in my blog post
• 44:56
  Speaker 1: is it it shows that we don't have a culture
• 45:01
  Speaker 1: of going back and checking each other's work, right I.
• 45:07
  Speaker 1: And there was pushback, and I'll come back to this
• 45:10
  Speaker 1: about the paper, because it wasn't like they went and
• 45:14
  Speaker 1: did like a news study. You know, like I work
• 45:16
  Speaker 1: in consumer spending. I have written so many papers showing
• 45:20
  Speaker 1: falsification of a basic principle of consumer spending models, as
• 45:25
  Speaker 1: as like hundreds of other people. Right, So it's not
• 45:28
  Speaker 1: like someone's checking my work where I'm not checking Jonathan
• 45:31
  Speaker 1: Parker's work. We're just doing different studies. What this paper
• 45:35
  Speaker 1: by Andrew Chang and Philip Lee did is they said, Okay,
• 45:39
  Speaker 1: let's go to the top journals and let's just see
• 45:41
  Speaker 1: if we can get their main results. They weren't even
• 45:44
  Speaker 1: trying to replicate all the results. They just wanted the
• 45:47
  Speaker 1: main takeaway empirical results of the finding. And they they
• 45:56
  Speaker 1: did this in a way Andrew Kang was a colleague
• 45:59
  Speaker 1: of mine. For you is at the Federal Reserve. He
• 46:02
  Speaker 1: is an absolutely industrious person, not as fire as me,
• 46:06
  Speaker 1: like he's more soft spoken. He completely rolled up his sleeves.
• 46:12
  Speaker 1: He had an army practically of research assistance. He was
• 46:16
  Speaker 1: also in the macro forecasting section with me, and they
• 46:20
  Speaker 1: spent hundreds of hours on this project. They were so careful,
• 46:26
  Speaker 1: like there were no cutting corners, there was no playing
• 46:28
  Speaker 1: fast and loose. They wanted to be able to replicate.
• 46:33
  Speaker 1: They put a lot of time into it, and it
• 46:37
  Speaker 1: should have been a finding that we as a profession
• 46:40
  Speaker 1: took really seriously. And instead from very elite members of
• 46:46
  Speaker 1: the profession they were they were received with derision. I
• 46:52
  Speaker 1: mean they were outright criticized, put down in public. The
• 46:58
  Speaker 1: paper was death rejected it. In addition, where I talked
• 47:01
  Speaker 1: about in the blog post, Andrew shared with me a
• 47:04
  Speaker 1: correspondence that he received from a very senior person in
• 47:07
  Speaker 1: the profession because he knew I had had problems with
• 47:10
  Speaker 1: this person. And I was furious, but I told Andrew,
• 47:15
  Speaker 1: this man does it, but it is absolutely unacceptable. The
• 47:18
  Speaker 1: paper was rejected at all the top journals. It did
• 47:21
  Speaker 1: finally find a home and adding injury to insults in
• 47:24
  Speaker 1: one of those top journals. Another researcher, much more prominent,
• 47:28
  Speaker 1: published a paper later saying we should do more replication.
• 47:33
  Speaker 1: I mean, it was just it was astounding to me
• 47:35
  Speaker 1: on so many different levels of this elitism and the
• 47:39
  Speaker 1: profession pushing back on uncomfortable conversations, and then like, we
• 47:45
  Speaker 1: actually need a culture of replication, Like I know that
• 47:49
  Speaker 1: is a policy analyst. I never took a result, a
• 47:53
  Speaker 1: piece of advice into the boardroom that was one paper,
• 47:56
  Speaker 1: especially if it was some paper that was like totally
• 47:58
  Speaker 1: different than every other paper written on the topic. Academia
• 48:02
  Speaker 1: rewards novel surprising findings. Those are the ones that we
• 48:09
  Speaker 1: absolutely should be checking the map, right, because I'm not
• 48:13
  Speaker 1: saying they're all wrong, but I mean Andrew and Phillips
• 48:15
  Speaker 1: research showed yeah, you should really, we should really do
• 48:19
  Speaker 1: more of this, and and we don't economics and frankly
• 48:23
  Speaker 1: his paper, their paper was ignored. Let me push back
• 48:28
  Speaker 1: a little bit against your argument with a quote from
• 48:31
  Speaker 1: famous physicist Max Planck, basically saying, what the old guard
• 48:36
  Speaker 1: believes doesn't go away until the old guard is dead.
• 48:39
  Speaker 1: So how is economics any different from physics? Or other
• 48:43
  Speaker 1: fields where you have this entrenched, calcified belief system that
• 48:49
  Speaker 1: literally takes a generation to get past. So when I
• 48:53
  Speaker 1: hear the quote now, and I've heard it in the past,
• 48:56
  Speaker 1: and I agree with it, and I think the direction
• 48:59
  Speaker 1: you're going. But a few weeks ago, Emmanuel Fari, who
• 49:05
  Speaker 1: is a forty one year old brilliant macro economists really
• 49:12
  Speaker 1: pushing the boundaries of the field in a very good way,
• 49:15
  Speaker 1: and a kind man and a mentor too many he
• 49:19
  Speaker 1: killed himself, and in the last four years Marty Weisman
• 49:24
  Speaker 1: killed himself, and Alan Krueger and build Standholme, And these
• 49:29
  Speaker 1: are people who are creative. They were trying to change
• 49:33
  Speaker 1: the field, both in the way we treat people and
• 49:36
  Speaker 1: in the things that we think and explore and the
• 49:39
  Speaker 1: questions and the findings. And to me that that shows
• 49:44
  Speaker 1: the opposite of progress. I mean, those were funerals that
• 49:48
  Speaker 1: nobody should have had to go to UM So, yes,
• 49:53
  Speaker 1: the quote, And honestly, when Emmanuel death happened, that was
• 49:58
  Speaker 1: when I took what had been a priv reflection that
• 50:01
  Speaker 1: I sent to Janet Yell and in Member Nankee, because
• 50:04
  Speaker 1: they were heads of the American Economics Association, to say
• 50:07
  Speaker 1: we have a problem. And when Emmanuel killed himself, I said,
• 50:13
  Speaker 1: I needed to tell more people because this has to stop.
• 50:18
  Speaker 1: So let's get into some specifics. Some of the things
• 50:21
  Speaker 1: you mentioned in your boast involved misogyny and sexism and
• 50:26
  Speaker 1: racism and other things. Let's let's start with the New
• 50:32
  Speaker 1: York Times quote um from June of this year, economics
• 50:37
  Speaker 1: dominated by white men is royaled by Black Lives Matter?
• 50:41
  Speaker 1: So is economics dominated by men and is a mixed
• 50:46
  Speaker 1: mostly white and what should we be doing about that? Yes,
• 50:51
  Speaker 1: there's absolutely a domination in the sense that the elite
• 50:56
  Speaker 1: members of the profession, the ones you see on t
• 51:00
  Speaker 1: be the ones who are in the White House, in
• 51:03
  Speaker 1: the top positions, many many of them are white men.
• 51:09
  Speaker 1: I like to joke, and I've been to so many seminars,
• 51:12
  Speaker 1: especially these online virtual seminars about COVID with macroeconomists, so
• 51:17
  Speaker 1: many of them. It is just a sea of whiteness
• 51:20
  Speaker 1: and maleness. And I like to joke that the diversity
• 51:23
  Speaker 1: here is the degree of hair loss, right, Like, I mean,
• 51:26
  Speaker 1: this is and um, you know, I'm kind of a
• 51:29
  Speaker 1: paint and in general, but you know this is serious
• 51:32
  Speaker 1: that you've gon joke about it. But that means that
• 51:34
  Speaker 1: you are not bringing the lived experiences. White men do
• 51:38
  Speaker 1: not experience misogyny like I mean, they can experience something
• 51:42
  Speaker 1: from women that you know and being degraded by other
• 51:45
  Speaker 1: men colleagues. But white men also just like I as
• 51:48
  Speaker 1: a white woman, do not experience racism. Like I can
• 51:52
  Speaker 1: be empathetic, but I will never walk in those shoes. Right,
• 51:56
  Speaker 1: So you can as a researcher, are like I can
• 52:00
  Speaker 1: write about race, I can think about race, but particularly
• 52:05
  Speaker 1: during Black Lives Matter, I still figured out, you know,
• 52:09
  Speaker 1: my voice is not what we hear need to hear
• 52:12
  Speaker 1: right now. But I can amplify the voices, particularly of
• 52:17
  Speaker 1: black scholars, because I can retweet. You know, I have
• 52:21
  Speaker 1: a platform on Twitter that a lot of them don't.
• 52:23
  Speaker 1: And to me, I wanted the world and I needed
• 52:26
  Speaker 1: to see their voices because there are economous There are
• 52:30
  Speaker 1: scholars who think very hard, have thought very hard for
• 52:34
  Speaker 1: decades about structural racism and injustice in the U. S.
• 52:39
  Speaker 1: Economy and the global economy. They exist, they have been marginalized,
• 52:44
  Speaker 1: they are told their research is not economics. They're rejected
• 52:48
  Speaker 1: from top journals. I saw someone talking about like they
• 52:51
  Speaker 1: put racial injustice in a paper and a referee said
• 52:53
  Speaker 1: that's inflammatory, and I'm like, no, that's like the real
• 52:56
  Speaker 1: world for these people like you know, So that this
• 53:00
  Speaker 1: culture and then in addition, we had white men jumping
• 53:04
  Speaker 1: into the conversation of black Lives matter in a very
• 53:08
  Speaker 1: problematic and frankly racist way. So let's talk a little
• 53:13
  Speaker 1: bit about the research aspect of this. A month after
• 53:17
  Speaker 1: that Time's Peace was out, there was a Wall Street
• 53:21
  Speaker 1: journal piece vote Economic journals faulted for neglecting studies on
• 53:26
  Speaker 1: race and discrimination. That was in July of this year,
• 53:30
  Speaker 1: to which you responded, economics has a race problem. So
• 53:35
  Speaker 1: how do you recognize the race problem? And what can
• 53:39
  Speaker 1: you do to solve the race problem? Because in your
• 53:42
  Speaker 1: blog post it's apparent it's not just at the big
• 53:46
  Speaker 1: institutions in government or Wall Street or corporate America. It
• 53:51
  Speaker 1: starts at at freshman academia and goes the whole whole
• 53:56
  Speaker 1: way from when you first decided to become an economist
• 54:00
  Speaker 1: and follows your entire career. So what can economics do
• 54:03
  Speaker 1: about its race problem? It has to do so much
• 54:10
  Speaker 1: like there is no magic wand there is no silver bullet.
• 54:14
  Speaker 1: The thing that economics has fallen down on and race
• 54:18
  Speaker 1: raises frankly a much more serious conversation that we need
• 54:22
  Speaker 1: to have the gender right. I mean, Ray is just deplorable.
• 54:26
  Speaker 1: And what surprised me about my blog post on many
• 54:29
  Speaker 1: different dimensions is I didn't think it was newsworthy because
• 54:32
  Speaker 1: everything I said we already knew. Now, the economics profession
• 54:37
  Speaker 1: has this amazing ability to explain away its problems. I've
• 54:43
  Speaker 1: done a lot of work speaking on gender and economics.
• 54:46
  Speaker 1: I don't do research in this area, but again, I
• 54:49
  Speaker 1: want to amplify the research, and I have a presentation
• 54:53
  Speaker 1: where I go through and debunk every single one of
• 54:56
  Speaker 1: the criticisms. One of them is women can't do maths.
• 54:59
  Speaker 1: This is not true. Plenty of women are math majors.
• 55:02
  Speaker 1: Another one is well, women just don't want to do economics.
• 55:05
  Speaker 1: And it's like, well, why do you think that's the case,
• 55:07
  Speaker 1: right Like, if they show up and you say sexually
• 55:10
  Speaker 1: explicit jokes in class, they might not feel real comfortable,
• 55:14
  Speaker 1: or if the curriculum doesn't even talk about it, right like.
• 55:20
  Speaker 1: And so it just shows that a lot of economists
• 55:22
  Speaker 1: either are completely ignorant of race, or in some cases,
• 55:29
  Speaker 1: they are openly hostile to raise and many of these
• 55:35
  Speaker 1: people not everyone. I don't there could people in economics, right,
• 55:39
  Speaker 1: but too often, in too many cases, we have gatekeepers
• 55:43
  Speaker 1: of the profession who are not being inclusive. They're doing
• 55:49
  Speaker 1: the opposite, they're pushing people away. And if that is
• 55:52
  Speaker 1: the case, then you have a big problem. And frankly, like,
• 55:55
  Speaker 1: how do I know it? Because look around, like there
• 55:59
  Speaker 1: was one black woman economists out of over four hundreds
• 56:04
  Speaker 1: that I worked with at the Federal Reserves. Over time,
• 56:07
  Speaker 1: there's like two other black people that I know that
• 56:09
  Speaker 1: have worked and have since left. Like, seriously, don't you
• 56:13
  Speaker 1: think maybe you know and so? And you can see
• 56:17
  Speaker 1: this in top journals. Good luck, good luck finding a
• 56:20
  Speaker 1: black person Latina Asian, Like, there's just there. There's so
• 56:25
  Speaker 1: many layers of pushing people away that we need because
• 56:30
  Speaker 1: they bring something in an authentic way that most of
• 56:34
  Speaker 1: us can't. Huh. Quite interesting, And our last question on
• 56:40
  Speaker 1: economics problems, this is a quote from your blog post
• 56:46
  Speaker 1: quote economics hurt people outside economics with bad policy advice. Explain.
• 56:54
  Speaker 1: So this goes back to my soul searching in the
• 56:58
  Speaker 1: very worst time time of the recovery from the Great Recession,
• 57:02
  Speaker 1: when I was like, how did we miss this at
• 57:05
  Speaker 1: the Federal Reserve the crisis, the housing crisis? How did
• 57:09
  Speaker 1: we miss it now in the Great Recession the recovery.
• 57:13
  Speaker 1: And I got to this point of saying, it's because
• 57:17
  Speaker 1: we do not have diversity. The diversity comes in a
• 57:21
  Speaker 1: lot of dimensions. And the thing that really nailed it
• 57:26
  Speaker 1: for me is I went back again. I was really
• 57:29
  Speaker 1: trying to understand this, Like, I was so puzzled. And
• 57:31
  Speaker 1: I'm one of those people that loves to read FED
• 57:34
  Speaker 1: transcripts from the Federal Open Market Committee meeting. So I
• 57:37
  Speaker 1: started pouring through the transcripts prior to the financial crisis,
• 57:42
  Speaker 1: and I found a meeting and I go back in
• 57:45
  Speaker 1: my like low points of being at the FED or
• 57:47
  Speaker 1: just doing economic policy, and I reread this one transcript.
• 57:51
  Speaker 1: It was in two thousand five. Josh Gallen, who has
• 57:55
  Speaker 1: now a very senior economist as the board, he was
• 57:59
  Speaker 1: a junior economist. Then he briefed off and see he
• 58:03
  Speaker 1: argued that house prices were overvalued. This is in two
• 58:06
  Speaker 1: thousand five. The whole I mean green space like everybody else.
• 58:09
  Speaker 1: There's some exceptions, but basically everyone else at this meeting,
• 58:13
  Speaker 1: especially the ones that were very prominent like Greenspan totally
• 58:17
  Speaker 1: shut him down. Now years later, I've always told Josh
• 58:21
  Speaker 1: I like, he's a hero. He spoke up, like I
• 58:23
  Speaker 1: tried to speak up. You get like smothered when you
• 58:25
  Speaker 1: try to speak up. But if you're persistent, I'm a
• 58:28
  Speaker 1: persistent person, you can move. The needle is a very
• 58:32
  Speaker 1: slow moving needle, but it does move. And recently I
• 58:35
  Speaker 1: saw him and he knows, like, I sah, you're my hero,
• 58:38
  Speaker 1: and he's like, but Claudia, I never forgave myself because
• 58:42
  Speaker 1: he said after they came down, after they explained it away,
• 58:45
  Speaker 1: I could have kept pushing loudly and I didn't, And
• 58:51
  Speaker 1: I thought, to me, that was a really important lesson.
• 58:54
  Speaker 1: And I have been not with the consensus since this
• 58:59
  Speaker 1: crisis started. I have very loudly said we have the
• 59:03
  Speaker 1: mother of all demand shocks, like, yes, the pandemic is,
• 59:07
  Speaker 1: you know, causing what we you know, a supply shock,
• 59:09
  Speaker 1: but this is a big one. And I spent a
• 59:12
  Speaker 1: lot of time and I was told by people who
• 59:14
  Speaker 1: I have very much respect in economic policy circle, its Claudie,
• 59:18
  Speaker 1: you need to tone it down because you're gonna look
• 59:20
  Speaker 1: bad at the other side of this. And I was like,
• 59:22
  Speaker 1: I won't right, and I didn't back down on the
• 59:26
  Speaker 1: blog post because I know people that have hurt and
• 59:30
  Speaker 1: are continued to be hurt. Like I'm fine nine years
• 59:33
  Speaker 1: ago when they come in my office, I'm like, yeah,
• 59:36
  Speaker 1: go away. Uh, but I know people that have been
• 59:39
  Speaker 1: hurt are being hurt, not just the FED but all
• 59:44
  Speaker 1: over and the undergrads that I hear from where the
• 59:47
  Speaker 1: people have been pushed out of the profession. I mean,
• 59:49
  Speaker 1: they make me angry. He read the post. I found angry.
• 59:53
  Speaker 1: I am like, this is completely unfair. And so many
• 59:57
  Speaker 1: of them would have been great economists. I know it,
• 1:00:01
  Speaker 1: some of them. I saw their research getting going. I
• 1:00:03
  Speaker 1: was so excited, and they walked away and I said,
• 1:00:05
  Speaker 1: you know what, we don't deserve you. We need you,
• 1:00:08
  Speaker 1: but we don't deserve you. And like that has to change,
• 1:00:11
  Speaker 1: because until it changes, we are going to continue to
• 1:00:14
  Speaker 1: give advice that is not aware of. Well, how do
• 1:00:19
  Speaker 1: people of color, how does it less educated, How do
• 1:00:23
  Speaker 1: the people on the margins of the economy experience a recession?
• 1:00:27
  Speaker 1: Let's talk about that. Let's do research on that. And
• 1:00:30
  Speaker 1: it has been ignored, and the Federal Reserve has done
• 1:00:33
  Speaker 1: so much to improve that research. But like where was
• 1:00:37
  Speaker 1: it in two thousand eight? Like how is it possible?
• 1:00:42
  Speaker 1: Because it was out in the world, out in academia,
• 1:00:44
  Speaker 1: out in other policy circles. This conversation was happening, this
• 1:00:48
  Speaker 1: research was happening, and we just totally ignored it. Wow,
• 1:00:53
  Speaker 1: quite fascinating. I am almost out of time. I know
• 1:00:57
  Speaker 1: we only have you for an hour, So let jumped
• 1:01:00
  Speaker 1: to our speed round. These are our favorite questions we
• 1:01:04
  Speaker 1: ask all our guests. There sixty seconds each and it's
• 1:01:07
  Speaker 1: how we wrap up the show each week. So let's
• 1:01:10
  Speaker 1: jump right into this. Tell us what you're streaming these days.
• 1:01:13
  Speaker 1: Give us your favorite either Netflix or Amazon shows, or
• 1:01:16
  Speaker 1: any podcasts you're listening to. So I have become an
• 1:01:21
  Speaker 1: avid podcast listener, right. I didn't think I would because
• 1:01:25
  Speaker 1: for a long time I like to read. I loved
• 1:01:26
  Speaker 1: econ blogs, but they just they aren't what they used
• 1:01:30
  Speaker 1: to be, uh in terms of just not as many voices.
• 1:01:33
  Speaker 1: So I was like, Okay, I'm gonna I'm gonna listen
• 1:01:35
  Speaker 1: to these podcasts. One of my coping mechanisms in this
• 1:01:38
  Speaker 1: crisis has been go fred long walk every day, and
• 1:01:42
  Speaker 1: podcasts made a great soundtrack to my long walk. I
• 1:01:45
  Speaker 1: listened to a very wide range of podcast I listened
• 1:01:51
  Speaker 1: to The Indicator, I listened to various podcasts on Bloomer.
• 1:01:57
  Speaker 1: I love Joe Wisenal and Tracy ol Ways podcast. I
• 1:02:01
  Speaker 1: just it's so informative and they're fun, right. And I
• 1:02:06
  Speaker 1: listen to the Brunix, right, Matt and Elizabeth Brune. I mean,
• 1:02:10
  Speaker 1: this is a very different perspective. I don't always agree
• 1:02:13
  Speaker 1: with them, it's very interesting. And I listen to podcasts
• 1:02:16
  Speaker 1: that are not about economics. A friend pointed me Caatebon
• 1:02:21
  Speaker 1: pointed me to Forever thirty five. It's about facial products
• 1:02:25
  Speaker 1: and like what to wear in the pandemic from these
• 1:02:27
  Speaker 1: two women, and it's like, I need to take a
• 1:02:30
  Speaker 1: break from economics sometimes, right. And so to me, it's
• 1:02:33
  Speaker 1: been a great way just to hear people other voices.
• 1:02:38
  Speaker 1: And I've been really privileged, like today to actually be
• 1:02:41
  Speaker 1: part of those conversations. I can never listen to the
• 1:02:44
  Speaker 1: ones that I'm on later, um, but I love the
• 1:02:46
  Speaker 1: fact it's a it's a it's a difficult skill to
• 1:02:49
  Speaker 1: learn to listen to yourself without cringing. Trust me, I
• 1:02:53
  Speaker 1: know from where I come. Second question, who are your
• 1:02:56
  Speaker 1: mentors who helped shape your career, so I have a
• 1:03:01
  Speaker 1: lot of them. Sarabe Dad was my first economics professor
• 1:03:05
  Speaker 1: at Dennison. He was my senior thesis advisor. I wouldn't
• 1:03:09
  Speaker 1: be an economist if he hadn't like really pushed me.
• 1:03:12
  Speaker 1: And I learned economic history from him, like I never
• 1:03:14
  Speaker 1: saw that again, history of economic thought at the University
• 1:03:17
  Speaker 1: of Michigan. Matthew Shapiro was my advisor. I continue to
• 1:03:21
  Speaker 1: come to him and especially recently with advice. I do
• 1:03:25
  Speaker 1: research with him. He's just really important and you have
• 1:03:29
  Speaker 1: to have allies, and I need an ally that understood economics.
• 1:03:32
  Speaker 1: But my parents are awesome, but they're like, listen to Matthew.
• 1:03:35
  Speaker 1: He cares and he understands your world. We do not
• 1:03:37
  Speaker 1: understand your world. And I will say a big mentor
• 1:03:42
  Speaker 1: an ally to me. David Lebo was my first section
• 1:03:45
  Speaker 1: chief at the Board, and he is someone who I
• 1:03:49
  Speaker 1: always felt I could go to. He was someone I
• 1:03:52
  Speaker 1: went to when I just completely melted down in two
• 1:03:55
  Speaker 1: thousand eleven, and it's really special to have people who
• 1:04:00
  Speaker 1: you know you can go to. They care about you
• 1:04:02
  Speaker 1: and they will not judge you. Because I was a
• 1:04:05
  Speaker 1: total mess and he helped me get better. He gave
• 1:04:08
  Speaker 1: me the space, he made sure they didn't fire me.
• 1:04:11
  Speaker 1: Um and and I try to do that as a mentor.
• 1:04:15
  Speaker 1: The thing that I learned and I pushed out this
• 1:04:17
  Speaker 1: post is I learned that like helping people get better
• 1:04:20
  Speaker 1: and as the absolute first thing to do is important,
• 1:04:23
  Speaker 1: but if you don't go back and try and figure
• 1:04:26
  Speaker 1: out how to shut down the harasser, it doesn't stop.
• 1:04:29
  Speaker 1: And that's a very recent lesson for me. And that's
• 1:04:32
  Speaker 1: a tough lesson for all of the allies I've had
• 1:04:35
  Speaker 1: because they just want to help me and I get
• 1:04:39
  Speaker 1: and that's what I needed most. But I also there's
• 1:04:41
  Speaker 1: a systemic problem. We've got to fix it, and it
• 1:04:43
  Speaker 1: will be the allies that do it, but we we
• 1:04:46
  Speaker 1: gotta we gotta do it, alright. So our favorite question,
• 1:04:50
  Speaker 1: this is the one that everybody always asks about. Tell
• 1:04:53
  Speaker 1: us what you're reading? What are you reading currently? And
• 1:04:56
  Speaker 1: one are some of your all time favorite books? The
• 1:05:00
  Speaker 1: this one is tough. Like I read a lot and frankly,
• 1:05:04
  Speaker 1: I read a lot of Twitter, right like I just um,
• 1:05:08
  Speaker 1: I am what Tyler Cowen refers to as an info war,
• 1:05:12
  Speaker 1: Like I just love all this stuff flying by me,
• 1:05:16
  Speaker 1: and that unfortunately means that, like, that's what I spend
• 1:05:20
  Speaker 1: a lot of time doing, right, because I can't read
• 1:05:23
  Speaker 1: two things at once. Um, and I'm going to send
• 1:05:28
  Speaker 1: you a tweet showing you one book. I'm going to
• 1:05:32
  Speaker 1: send you a tweet showing you my biggest fear during
• 1:05:35
  Speaker 1: the pandemic is not reading any books and only reading Twitter. Yeah,
• 1:05:40
  Speaker 1: and I read a lot of journal articles. I mean,
• 1:05:43
  Speaker 1: economics does not have a culture of writing books. Though
• 1:05:48
  Speaker 1: our paper drew up in eighty pages, so it's kind
• 1:05:50
  Speaker 1: of like a little mini book. What sort of advice
• 1:05:53
  Speaker 1: would you give to a recent college graduate just beginning
• 1:05:58
  Speaker 1: their career in economics? It's not your fault as a
• 1:06:04
  Speaker 1: new person. No, I'm serious and actually right now and
• 1:06:08
  Speaker 1: imports like putting it in the context of this recession.
• 1:06:12
  Speaker 1: People who are early in their career, people who are
• 1:06:14
  Speaker 1: graduating college, people who are finishing up their PhDs this year,
• 1:06:19
  Speaker 1: they are going to have a very rough time. And
• 1:06:22
  Speaker 1: there's research that shows that you have a rough time
• 1:06:25
  Speaker 1: for a whole career. Like these poor millennials. We totally
• 1:06:29
  Speaker 1: slammed them because it came out in the job market
• 1:06:31
  Speaker 1: in the early days of the Great Recession and its
• 1:06:33
  Speaker 1: recovery and oh my gosh, they finally have enough money
• 1:06:36
  Speaker 1: to buy a house, and we're doing this to them again, right,
• 1:06:39
  Speaker 1: So I just it's important in like the context of
• 1:06:42
  Speaker 1: the world that you're in, like it's not their fault.
• 1:06:46
  Speaker 1: Matthew Shapiro reminds me that the macro economy is not
• 1:06:48
  Speaker 1: my fault because you know, it's a good forecaster. I
• 1:06:51
  Speaker 1: can't fix this, and so I have to like chill
• 1:06:53
  Speaker 1: out a little bit um And but in terms of
• 1:06:58
  Speaker 1: and it's not your fault is also porton. When you
• 1:07:00
  Speaker 1: get into a this profession of economics, you're going to
• 1:07:04
  Speaker 1: see things differently than the more senior people. Like we
• 1:07:07
  Speaker 1: forget what it's like to be new. We forget like
• 1:07:10
  Speaker 1: how problematic some of our norms are. So you have
• 1:07:13
  Speaker 1: your eyes open and it's really hard to balance this.
• 1:07:17
  Speaker 1: This doesn't feel okay, but I feel like I gotta
• 1:07:20
  Speaker 1: do it to fit in. And and when something bad
• 1:07:23
  Speaker 1: happens too often, I see young economists and I did
• 1:07:26
  Speaker 1: this to blaming themselves and it's not about them. It's
• 1:07:31
  Speaker 1: it's a it's not about the person who has heard,
• 1:07:33
  Speaker 1: it's about the person who's hurting them. But like that's
• 1:07:36
  Speaker 1: a tricky thing. And that's like, you know, pro pro
• 1:07:39
  Speaker 1: tip of like working through a career. Right, this is
• 1:07:43
  Speaker 1: not just economics, but if you haven't lived it, how
• 1:07:47
  Speaker 1: how would you possibly know how to react to it? Huh?
• 1:07:51
  Speaker 1: Quite quite interesting. And our final speed round question, what
• 1:07:55
  Speaker 1: do you know about the world of economics today that
• 1:07:58
  Speaker 1: you wish you knew twenty years ago? Were so when
• 1:08:01
  Speaker 1: you were first getting out of school. I became an
• 1:08:07
  Speaker 1: economist because I believe that economics could do good in
• 1:08:11
  Speaker 1: the world, and in particular, I became a macro economist
• 1:08:15
  Speaker 1: because I believed economic policy, like the big stuff, could
• 1:08:20
  Speaker 1: do good. Again, it was there to do good. And
• 1:08:24
  Speaker 1: something I have grappled with in my career as an
• 1:08:27
  Speaker 1: economic policy advisor is we don't always do good. Now
• 1:08:34
  Speaker 1: I am, I am totally a glass half full, if
• 1:08:37
  Speaker 1: not overflowing. I have a lot of energy. I did
• 1:08:40
  Speaker 1: not give up, and I think we can do this
• 1:08:43
  Speaker 1: and we definitely do in some cases. But as like economics,
• 1:08:47
  Speaker 1: we got to do more good in the world. And
• 1:08:50
  Speaker 1: I think for me that was you know, I'm a
• 1:08:52
  Speaker 1: naive person and I love people and I think everyone
• 1:08:55
  Speaker 1: else should. But you know, like there are racist and
• 1:08:58
  Speaker 1: misogynists and people were totally close minded and we'll protect
• 1:09:02
  Speaker 1: their elite position, and it's like, yeah, we've got to
• 1:09:05
  Speaker 1: change that, because like that is not helping us do
• 1:09:07
  Speaker 1: good in the world. Thanks so much, Claudia for being
• 1:09:11
  Speaker 1: so generous with your time. We have been speaking with
• 1:09:14
  Speaker 1: Claudia sam She is a former senior economist in the
• 1:09:17
  Speaker 1: Council of Economic Advisors for the Obama administration, as well
• 1:09:21
  Speaker 1: as being a researcher and section chief for the Board
• 1:09:25
  Speaker 1: of Governors for the Federal Reserve. If you enjoy this conversation, well,
• 1:09:29
  Speaker 1: be sure to look up an Incher Down an Inch
• 1:09:31
  Speaker 1: on Apple iTunes and you can see any of the
• 1:09:34
  Speaker 1: previous three hundred plus conversations we've done over the past
• 1:09:38
  Speaker 1: Wow six years. That's a long time. You can also
• 1:09:41
  Speaker 1: find us at any of your favorite podcast hosts, Spotify, Overcast, Stitcher,
• 1:09:47
  Speaker 1: wherever finer podcasts are sold. You can check out my
• 1:09:51
  Speaker 1: weekly column on Bloomberg dot com Slash Opinion, follow me
• 1:09:55
  Speaker 1: on Twitter at rit Halts, sign up for our daily
• 1:09:58
  Speaker 1: reads at rit Halts dot com. I would be remiss
• 1:10:02
  Speaker 1: if I did not thank the crack staff that helps
• 1:10:04
  Speaker 1: put this conversation together each week. Michael Boyle is my producer.
• 1:10:09
  Speaker 1: Maroufal is our audio engineer. Michael bat Nick is my
• 1:10:13
  Speaker 1: head of research. Attica val Brunn is our project manager.
• 1:10:17
  Speaker 1: I'm Barry Ritolts. You've been listening to Masters in Business
• 1:10:21
  Speaker 1: on Bloomberg Radio.