Holly Wade National Federation discussed on Overnight re-air of day's programming

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This in other words your future this election season directs and until see the biggest picture for yourself and make up your own with C. span's campaign twenty twenty right to use a public service television provider the economic policy conference hosted a series of panel discussions focusing on economic growth and domestic security in twenty twenty Holly Wade national federation of independent business research and policy analysis director begins this two hour event I thank everybody for joining us this morning over coffee and the opening session of knaves policy conference I'm Holly Wade the director of the research center at the national federation of independent business and I am delighted to introduce two months the Lipson thank chairman and vice chair of the White House council of economic advisers in preparing for the session I found the first available and then I have a foundational commonality he's originally from Sweden I'm originally from Minnesota the land of American Swedes both of them the lives and stopped a bit short of the Minnesota border and is currently on leave from university of Chicago where he is the Daniel Levin professor of public policy studies at the university is terror school public policy and direct the backer Friedman institute's program on foundational research in health care markets and policies within the health economics initiative before arriving at the university of Chicago he served in several public sector positions including his role as senior adviser to the head of the food and drug administration and subsequently as the senior economic adviser to the head of the centers for Medicare and Medicaid services he also served as the health care adviser for senator John McCain's during his presidential campaign German children thank you so much for joining us today to start I would like the seventy fourth edition of the economic report of the president was released last week which it says on wikipedia that the chairman right all three hundred pages I'm sure if you would please take us through some of the highlights of the report sure this is the report you can download it for free the White House site and I'm gonna talk a little bit about sort of the main themes it's it's obviously a stopper I didn't write the report it's about four hundred thirty five pages so it's quite an effort that takes place over several months and I'm gonna go through the main themes if you want sort of the bottom lines of what see a dolls house on on the R. P. or in general our Twitter account White House CA almost daily updates on all our all of our activities and also on sort of the bottom lines on the your P. a number for the president so basically there's two themes that kind of in the report are kind of our main things that on the the trump administration's pro growth agenda which we take the B. consisting of four pillars one is tax cuts to corporate capital second is the regulation of economic activity the third is basically freeing up energy innovation in the private sector and the fourth one being renegotiating trade agreements to be more fair or with more reciprocity across the globe and the two main themes basically in the report the kind of over lays a lot of chapters is that the first theme is that what we've seen in the expansion after at these policies were implemented under trump is very different from the early part of the expansion after the Great Recession the second team and I'll get into those numbers the second thing that we laid out is really about that the last three years and they're gonna meet again as opposed to the previous part of the expansion has really been inclusive in terms of growth that is to say the real benefactors the people are doing better are the lower end of the distribution so let me go into a little bit of why we how we document we documented two ways essentially why this expansion is different this part of the expansion is different from the earlier part usually when I have in a recession you have a early growth directly after the recession that's pretty rapid and then it kind of levels out to normal growth after that that's the opposite of what happened after the Great Recession where we had essentially you know a pretty slow growth initially and we have had accelerated growth of the last three years this is in spite of that fiscal and monetary policy was a lot looser I'm pro or stimulative in the early part of the recession as opposed to being more constrained we have eight rate rate hard substantially since sixteen and then we have them coming down three times since then essentially we have more easy monetary policy in the beginning of the cycle then in the end so the two ways we show that it's different from the earlier part of the expansion is one is we look at what did people say would be the continuation of the Obama economy in twenty sixteen so people obviously forecasted in twenty sixteen what they thought seventeen eighteen nineteen would look like in fact CBO's main goal is to forecast under current law that is to say Obama policies what the future will look like and if you look at that is basically not surprising but it's a pretty mistake forecast because people generally had to believe that it recessions or love the longer you go into an expansion the harder it is to actually do well so what happened obviously was different than that they predicted for example the labor force participation rate would fall it increase they predicted that the unemployment rate would rise to five percent and decreased to three point six finally they predicted wage growth of low income individuals very low with actually celebrated at several so I think you mean this last week this all this sort of that this come to an had with the president called this a con job basically if people wanted to claim that this was a continuation of the bomb expansion but it is kind of a condo because basically those people in twenty sixteen or now are claiming that this is a continuation of the bomb iconomi when they themselves in twenty sixteen said company something different so they're pretending to do some someone else than they actually are which is a con that's what a con man is so I think that's actually something that's worth noting that no one predicted and this kind of performance and given current law in twenty sixteen the second way in which the later part of the expansion different from the first is that actually if you look at just the date of the second part of the expansion compared to the first it's very different so for example prime age labor force participation shrank in the early part of the expansion and has picked up in the last three years same with home home ownership same with inequality and inequality is basically narrowed and the last three years as opposed to widening and before that and I cannot kind of gets me to the second team of the report which is inclusive growth and if you look at inequality both in income and wealth actually that has taken a turn for the better the last three years and so in income inequality if you look at a wage growth pretty much all across the board in terms of disadvantaged group but are you with the lower end you know the bottom half were set up for how minorities were as white Americans etcetera you have had a reversal of the disadvantaged groups are not rolling faster compared to before any seventeen when they were growing slower than their counterparts to repentance groups part of that we argue is obviously the tax cut that increased labor demand but also the regulation deregulation we organised report has been progressive in the sense that we'd seen larger gains has a share of income from the regulation for poor individuals that we have seen for richer individuals and that's an important component of why we work with the deregulation is important important set up on the income inequalities on the wealth inequalities are you seeing an enormous growth of wealth in the bottom half of the wealth distribution fifteen times faster than the last three administrations so forty seven percent growth in wealth among the lower half of the wealth distribution to benchmark that you know this is good this is the greatest generating self sufficiency as opposed to government dependence of the benchmarked against other things we do to try to help the poor it's in doubt wealth about point six trillion is larger than the three federal largest federal anti poverty program which is you know and you would be Medicaid food stamps and cash transfers Tomas Philipson with the White House council of economic advisers in years so it's a big deal in terms of how much the poorer gaining therefore they're coming off welfare programs basically by not qualifying which is how we want people to come up with welfare programs as opposed to not being in an eligible for other reasons but it pretty much every means tested welfare program we see people gaining enough income tax would become more self sufficient so this is kind of the you know the belief in that labor demand is probably the best and the part of the program we invented but human by man I would say in this self sufficiency is something that you know the forgotten men and women that we talk about in the demonstration this is really a big deal in terms of how we see the economy turning in their direction there's some additional risks discussed in the reports and also kind of the two main things there's some additional risks discussed in terms of housing regulation that we believe are extremely intrusive in certain parts of the country certain cities mainly New York and California and that housing regulation has led to a contract you know not enough supply there basically restricting the supply and therefore having very high prices in those areas and the question is can one Ondo state and local level get out deregulating those prices which I think it should be regulating those that supply to meet the demand better I think is very important going forward given that people are working more and earning more and therefore we kind of have a housing boom in conjunction also with the low interest rates so we're gonna have a demanding crease that's pretty substantial in those areas and you need supplies to basically feed at the man better than what we're currently doing it's very concentrated in certain areas Athens homelessness in those areas because housing becomes very expensive homelessness is you know I'm mainly it or a huge New York and California problem relative to other areas where health housing is not as the as regulated lastly this report in terms of risk is the first report which is surprising I think that this girl since the opioid crisis that's been going on for ten years or more and it's really is something that the president is very concerned about from day one but in the end the report we argue that this is really an important component of the opioids crisis is how with with finance that if this is partly an economic phenomenon because if you look at consensually how much the government financed opioid prescriptions at the first of all that was sort of a prescription wave of the crisis and then the markets go big enough for you legal innovators to improve quality and reduce prize which is really what Sentinel is about but if you look at the early part of the prescription an epidemic really that was highly subsidized by the government so we went from about fifteen percent of pills beings government financed through public programs to about sixty seven percent of pills in government finance during that period so if you think of other addictions alcohol and cigarettes we we tax those addictions this is the central yes we've been subsidized with addiction I would well intended programs obviously that are aimed at doing something else which is subsidizing the medical use of opioids which is not harmful people don't die from medical use for pain management opioids but at the same time we subsidize the nonmedical use of opioids which is what kills people and in in terms of an addiction so this I think wouldn't really this does growth of this epidemic wouldn't be feasible without those subsidies because if you look at in the middle of that prescription epidemic it costs about fifty grand to buy an addiction out of pocket per year because you buy a lot of pills when you're addicted so it's not like you or your co pay when you go to a pharmacy and it's twenty Bucks who cares this is basic if you were buying these out of pocket the amount of pills you would need prices that we're going it would cost about fifty grand to keep up a yearly addiction which is infeasible obviously for a large part of the population who got addicted so I think these government subsidies were important to basically provide an entry into the secondary market of nonmedical use of opioids during this period in the report basically lays out that transmission so that's part of the threats kind of we talk about in the report that's the third theme going forward what or certain things that in the future might be important to think about and salt stop there and we'll take some questions thank you for your remarks just a reminder your app on your phone or iPad or computer submit questions that you have I'll start off with one myself the economic report assumes an annual GDP growth of two point nine percent through twenty thirty if all the recommended policies are enacted the administration's proposed budget depends on this level of growth to shrink deficits going forward but without it deficits increased considerably how concerned are you about the real possibility of this happening since past predictions of GDP growth by the administration have not been realized and it assumes no recession during the forecast period which seems unlikely yeah so intro to realize our pass protection we're we're pretty close and if you look at the report we actually document the the errors all past administration in terms of forecast errors and and the trump administration is lower than any other administration since Reagan essentially so if you're concerned about forecasters you should have seen the errors of five percent roughly that took place in the early part of the expansion where people thought those programs would be very beneficial.

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