Jason Furman, American Economist & Professor

 

118. Jason Furman

SPEAKERS

Jason Furman, Will Bachman

 

Will Bachman  00:03

Hello and welcome to the 92 report conversations with members of the Harvard and Radcliffe class of 1992 I’m your host. Will Bachman, and I’m delighted to be here today with Jason. Furman, Jason, welcome to the show.

 

Jason Furman  00:16

Great to be with you.

 

Will Bachman  00:18

So Jason, tell us about your journey since graduating from Harvard?

 

Jason Furman  00:24

Well, why don’t we skip over a bunch of years and get straight to this morning when I walked into Sanders Theater to give a lecture on the topic of externalities, to act 10. EC, 10 was where my economics studying journey started. Probably that’s where many of our classmates started their journey, and that’s where I am now, just on the stage instead of in the audience. And that can be a slightly strange thing to think about. I don’t think that 32 years ago, or whenever it was I graduated, that’s that’s where I thought I’d be. Okay.

 

Will Bachman  01:08

So what has changed in Act 10? What do students learn now that is different than what we were taught?

 

Jason Furman  01:16

Okay? Well, I hope you have an hour for this conversation ready to go. Let’s roll. Hope you know that my TF isn’t listening. So I liked my TF, but when I took over the course seven years ago with David Laibson, we thought we really needed to make it a proper lecture class, and so it’s the two of us that do the most teaching, not the TFs, like when many of many of our classmates took the class, and part of why we do that is that it is a much, much more up to date class today, we used ideas from psychology and economics that are probably only 10 years old, in addition to teaching ideas about externalities that are more than 100 years old and certainly were taught back when I took the class. We bring in a lot of empirical evidence and get students to understand the difference between causation correlation and how you can use things like natural experiments and randomized control trials to understand it. There’s a lot of public policy. Monday’s class will be on one topic only, which is climate change, the economics of climate change, using the economic principles we’re learning in class, including externalities, by the way, to study climate change, the topic of why inequality has gone up, and understanding it and whether it is or isn’t a problem and what should or shouldn’t be done about it. We spent basically two and a half classes on that. When I took the class, we didn’t spend any time on that, in part because we were pretty early into the rise of inequality back in 1988 so a lot of things have changed, and I hope it’s more relevant, more up to date, while continuing to cover the sort of time honored principles that you want everyone to know.

 

Will Bachman  03:04

So you have done a few things between graduating and taking over EC 10. I would maybe we could jump around. I’d love to hear a bit about what it was like to work for President Obama. You are the Chairman of the Council of Economic Advisors. What is that like? What is that job like?

 

Jason Furman  03:24

Yeah, so first of all, just again, like starting from college, and then I’ll jump ahead to answer your question. In college, I don’t think I ever set foot in the Kennedy School. I don’t think I ever went to an IOP event. I certainly never did a summer internship in Washington. I just did not ever think that I wanted to go into public policy or Washington. And by the way, I have a joint appointment now in FAS and in HKS, the Kennedy School, and hopefully the Kennedy School students won’t hear what I’m saying here, because it’s great school. It does important things. But anyway, it just wasn’t what I was trying to do, expecting to do it almost seemed more establishment than I would have ever thought I wanted to be in college. Probably not the only person to end up more establishment than they wanted to be, but I ended up sort of accidentally being recruited to work into government when I was in graduate school. And then I discovered I loved it, and maybe I loved it because I was good at it, or maybe I was good at it because I loved it, or maybe I wasn’t very good at it. Who knows? Anyway, in 2008 I got called by David Axelrod. I had just had my second child. My first child was like 13 months old, and he asked me to move to Chicago for the campaign. I thought that was a nutty idea, and I previously said no to the campaign, but I mentioned it to my wife, and she said, actually, you know, pretty important campaign. You could do something real. Maybe you should go. So I went and met with. With Obama. I had met him a couple times before, but we sat down and talked for almost an hour about his view of the economy, my view of the economy, what type of issues were coming up in the campaign. It was partly job interview and partly, partly, just sort of conversation, getting to know each other. This was in June of 2008 and he said he wanted me to come on the campaign. I had one condition only, which is I had pictures of my babies pulling the lever for him, not entirely knowingly and rationally, but you know, we sort of directed them which lever to pull. And I wanted him to sign those pictures. He was willing to meet my condition. And so I went, I went to the campaign. That campaign was something amazing, because normally, when you do economic policy on a campaign, your job is to say whatever the other team says is horrible, and whatever you say is amazing, and you’re talking about what’s going to happen next year when you’re president. Here, the economy was falling apart. We were falling into a financial crisis, and Obama became convinced that he needed to support George Bucha idea for how to get out of it, which was tarp, also known as the bank bail out, I think not, not accurately, but neither here nor there. And so that campaign ended up being almost as much like governing as campaigning. It wasn’t, here’s what I would do next year when I’m president. It’s, here’s what I do this minute to help save the banks. And by the way, I’m supporting the opposition party’s president, George W Bush, and meeting with him and talking to his treasury secretary. I was talking to Treasury staff. I was talking to people at the Fed. I mean, there was a real sense that it was like governing, and that something real and important was happening. He won the election day after I went into campaign headquarters, probably rolled in later than usual, maybe 8:30am or something, and there were two other people there. One of them was my deputy on the campaign, an amazing guy named Brian Deese, who’s gone on to better things than I’ve ever done in terms of policy making. And the other guy, his name was Brian Jung. I’m not entirely sure why Brian was there, but ended up the three of us started putting together what could be done to save the banks, what could be done to get the economy started again. What could be done to rescue the auto industry? By the end of that week, there was a small team doing that, and a set of advisors. Dan Tarullo, you know, others. By the next week, we moved into the presidential transition office in DC. Presidential Transition offices are the coolest space in the world, because right down the hall for me was the office of the president elect. He didn’t end up using it till January, but that was his office next to me. Was a sign that said, you know, treasury secretary designate. You know, next down the hall, defense secretary designate. So there’s just all these offices that the day I walked in were almost entirely empty. And then as people were named to the different jobs, the offices started to fill up. And eventually, when you January, 20 or I didn’t walk in the door of the West Wing till the 21st on the 20th, I was too busy with the inauguration and the balls. But 21st you walk into the West Wing, same thing, the rooms are empty when you get in there, you walk in, you’re like looking for your name on the door. And that was exciting, but it was also just a crazy, crazy time. You know, the markets were collapsing and we didn’t know what was going to happen yet. Well, I originally I was working on every aspect of it. I started just working on the fiscal response, the Recovery Act, which turned out to be $800 billion another classmate of ours, Michael Grunwald, wrote the definitive book on it, and and then I ended up working on the quite, quite a lot, on the Affordable Care Act, the fiscal cliff, tax reform, technology policy, infrastructure, China, climate change, etc, etc. I could go on. But it was, you know, it was, it was quite an experience.

 

Will Bachman  09:07

Tell us about one of those bills or one policy that could have really gone either way, you know, like President Obama might have just gone either way. And you and your team, based on the research and the policy work that you did kind of influence the direction of of what was decided.

 

Jason Furman  09:26

Yeah, so I’ll give you one that shows where analysis matters, but also why the combination of analysis and politics is important. And you can’t have just one and not have the other, which is the United States, and this isn’t the world’s biggest issue, by the way, but you know, and when it’s the world’s biggest issue, who knows where your analysis did or didn’t matter, because lots of people are involved. This was a question of whether the United States should export crude oil, and there was a ban on the export of crude oil. It had been in place. Place for a while, and the reason was, you were afraid that the United States didn’t have enough oil, so we wanted to keep all of it. Environmentalists didn’t love exports of crude oil, because it’s like, you get more oil, and that’s bad for the environment. And that’s, by the way, a really, really important and valid concern. We did, led by someone whose work was actually motivated by climate change, and his main job was reducing climate change, a bunch of analysis. And basically discovered that the carbon content of US oil was much lower than the carbon content of Canadian oil. I believe we had light sweet crude, and they crude, and they had heavy sour but I could easily have these backwards, and we also had limited refinery capacity for our type of oil. And so the result of this export ban was not just that you were hurting American jobs, but you actually were pushing the world towards higher carbon oil and towards somewhat worse climate change, only a little bit worse, by the way. And so we did all this analysis, and the President saw it and said he wanted to meet with us. And he brought together his environmental advisors, political advisors, and me, and I think one of my colleagues maybe for meeting in the Oval Office, I remember actually rescheduled an international flight because I thought this was worth meeting with him on and we went in, and we went back and forth. And some people like this idea. Some people didn’t. At the end of it, the President said, Okay, this is a great idea. I want to do it, and I have the power to just sign something today, an executive order to make this thing happen that Jason and his team said was a good idea. And then the political people like, Wait, you’re going to really upset Democrats if you do this, don’t do that, even if Jason’s right, it’s not worth pissing them all off. And then people thought a bit, and I don’t remember where the idea came from, but they decided, You know what, he’s not going to sign this document to do what I wanted, and I thought he should sign it instead, he’s going to keep it in the back of his head that he likes this idea and see if we can get into a negotiation with Republicans in Congress, and we’ll make this a concession, where they get the oil export and they force us to get rid of the ban, because they really wanted to get rid of the ban, and in exchange, we get something anyway. Think six months later, we were in a negotiation, and we got from Republicans extending tax credits for wind and solar, which we really, really wanted. And the amazing thing was, the concession we got was this thing that we thought was good policy anyway, of allowing us to export this oil. And so for me, that was a case of where the White House basically worked. Took the analysis seriously, but did not take my advice on the politics and how to implement the analysis. Thought about the politics of it, and then went into a negotiation, and it all sort of fit together. Again, not the world’s biggest thing, but but one example of how analysis can matter.

 

Will Bachman  12:58

Tell us about any of the decisions that were made that if you could do it again with hindsight, you might have done differently.

 

Jason Furman  13:08

So you know, the two things that just it kills me that we didn’t get done that were so important that a time seemed really close. The first was for climate change cap and trade, which would have limited carbon emissions to a fixed amount, set up tradable permits. It was called Waxman Markey. It passed the House, and it had the support of 55 senators, and we just could not and we needed 60, by the way, because of the filibuster at the time, I don’t think we gave any thought at all to getting rid of the filibuster, and maybe we should have, although I have mixed feelings about that, and we just didn’t figure out how to thread the needle and get the other five Democrats who were in the Senate there were 67 Democrats then, or pick up some Republicans. And that’s especially painful because people like John McCain, who had been their presidential candidate, and Lindsey Graham that actually supported cap and trade. And it’s really important, I don’t know exactly what the mistake was, you know, and maybe there wasn’t a mistake on the second one that kills me is, is immigration reform. We had a comprehensive immigration reform plan. It would have been a stronger border. It would have been expanding legal immigration, both for, you know, family reunification purposes and and high skill and finally, it would have been a path to citizenship for people who are in the United States and are undocumented and Paul Ryan, who was then the Republican Speaker of the House, supported this, and we couldn’t get that done either. And, you know, again, I don’t know what, what could make it happen, but it felt so, so close. It was so, so important. It never happened in. Things that are, you know, where I know where my fault was those two I’m sure there was something I could have done that could have helped, and I didn’t do it, but I don’t know what it was. You know, in terms of myself, when the financial crisis hit and we were doing that first piece of legislation, we basically had a fixed amount of money. Effectively, here’s how much you get for tax credits. Here’s how much for states, here’s how much for unemployment insurance, not just a fixed amount of money, fixed amount of time also. And we didn’t know how long things were going to last and how bad it was going to be. And if you had told me how long and how bad, I would have said, no problem. Congress will pass a new law and they’re going to do more of all of this stuff. Well, it turned out that Congress, when they saw that it was bad the crisis, and they saw how long it was, they started to think, Whoa, all that money we spent didn’t work. Let’s not spend any more money. And so it ended up being really hard to come back to Congress, even though the unemployment rate was nine 10% to get more money for unemployment insurance, even though states had huge deficits and were cutting back really hard to come back to them to get more money for states. So what I wish we had done was we had set up an automatic set of formulas that said, making this up, as long as the unemployment rate is above seven, we’ll send checks out to families, we’ll send money to states, and when it falls below seven, we’ll stop doing that, and the law would have automatically been longer. And the reason I’m kicking myself is I actually liked that idea. When we were designing the bill, I sort of tried to do it, but I never figured out the details of how it would work. And people on the Hill were like, Oh, if you want to have these triggers, what would you do? How would you write it? What would your formula be? And I just like, wasn’t sleeping and wasn’t prioritizing. It didn’t come up with a formula. We didn’t do that. And after that first law, it was too late. They wouldn’t do it again. So if we had that in place today, we’d be in a better place, because every time there was a recession, automatically aid would kick in without having to wait for Congress, and unfortunately, have to wait for Congress, and sometimes they get it right, but a lot of times they get it wrong.

 

Will Bachman  17:09

President Obama said there’s no one I’d rather turn to for straightforward, unvarnished advice that helps me do my job. About You, my guess is it not super likely, but if President Elect Donald Trump came to you for advice about what to do with the economy and the decisions, what sort of advice would you be giving our incoming president? So

 

Jason Furman  17:32

first of all, I don’t expect him to ask for my advice, but if anyone in the Trump administration did ask my advice, I actually do think it’s part of my job and my responsibility to give advice to anyone who wants it. So I absolutely it’s not like I would boycott them or refuse. I would be happy to to give them advice. I would be happy to be a prop, to pretend things were bipartisan when they weren’t. But that’s another the public relations side, another side of it. What I would say is that the economy actually, right now is in pretty good shape. It’s going in a pretty good direction of travel. The most important thing is to not mess it up. And by the way, a lot of the things you campaigned on would mess it up. Big tariffs would mess it up. Huge immigration, mass expulsions would mess it up. A big increase in the budget deficit would mess it up, interfering with the Federal Reserve would mess it up. And so, you know, some of my advice would be somewhat unhelpfully, don’t do what you said on the campaign. Now this wouldn’t be the first time Donald Trump was inconsistent in what he said and what he did. And by the way, wouldn’t be the first time someone ran for president without following through and doing everything they said on the campaign trail. But yeah, but largely, my advice would be to drop all of that. And by the way, I expect that he will drop some of those ideas, because some of them would make the stock market go down, and he doesn’t want it to go down. Stock market, unfortunately, doesn’t care as much about child poverty or climate change or refugees from Afghanistan as it does about some of the independence of the Fed. And so some things it can protect, some things it can

 

Will Bachman  19:20

What are any mainstream democratic economic policies or beliefs that you would actually disagree with or push back against, perhaps in private?

 

Jason Furman  19:32

Yeah, so you were kind enough to read that quote from President Obama, and I think it was exaggerated. He was nominating me to be chair of the CEA. So of course he’s going to say nice things, but I think when he had to choose between different exaggerated things to say that he said unvarnished truth or something to that effect, that does capture something I tried to do in government, try to do in the classroom, try to do in my public communications as. Well, I don’t like people in government who all they do is try to figure out what the President wants to hear and tell him, and that can, you know, work out well for a bit, but I find it doesn’t actually work out that well, at least with a good president for very long. I think it is much better if you give, like, your opinion what it is, you’re honest about it. And sometimes people laugh at you because, you know, the time I told them that beer taxes should be higher, and here’s all the analysis as to why they listened for like, 30 seconds and then, you know, made fun of me for being out of touch and politically naive and idiotic, and didn’t do that idea. That’s fine with me. I felt my idea, my point was to tell them what the good idea was, and in that case, that they were probably correct in not taking my advice, factoring all in politically and the like. So I’ve always tried to be unvarnished. I tried to be unvarnished in public during the presidential campaign. I certainly much preferred Harris to Trump, but when she came out with policies I didn’t like, I said it. I said that about the original version of her price gouging proposal. I said, even though I’m not obsessed with the deficit, I thought she was insufficiently attentive to it. So I try to be unvarnished in my views in real time. Broadly speaking, I agree with a decent fraction of the Democratic agenda. I think there is underlying all of it, and unwillingness to reckon with trade offs, a sense that whatever it is you’re doing helps everything else, and so you just need to do more of it, as opposed to things have costs and benefits or this finite budget resources, and you have to decide how best to use them. So I think insofar as their errors, it goes in that direction. So tariffs on electric vehicles, you know, that’s going to hurt carbon emissions and make climate change worse, but you know, it’ll help the American auto industry be saved from China. What do you do there? I think that’s actually a difficult question, but if you think the answer is easy, that oh, we’re gonna have a great electric vehicle issue industry. All we need to do is protectionism on China. I think you haven’t thought hard enough about the fact that no actually electric cars, because these tariffs will be more expensive, we will have worse climate change. You know, is that worth it? Well, you need to do the cost benefit. And people don’t love doing that.

 

Will Bachman  22:21

You mentioned your discussion with President Obama about the beer tax. Paint a scene for us. Of kind of, when you see pictures of the President with advisors, they’re usually very formally sitting around a, you know that coffee table in the Oval Office? What is it like in real life? Paint a scene for us. Are you? Are you on the whiteboard? Are people like working through, you know, micro economics and supply and demand there? I mean, what? What would the actual interaction be like? Who’s in the room and what’s the back and forth like

 

Jason Furman  22:56

so many different types of meetings, but the road, the Oval Office tends to be for the a little bit smaller, often less formal. So you’re there’s two sofas, there’s the two chairs there. He’s always sitting on the chair on the right, if you’re facing the chairs, the chair on the left is either the Vice President, a foreign head of state, or no one. And you have about three people on each sofa on either side, and then you have a few chairs, usually in a semi circle behind the sofas, right in front of the resolute desk. And generally, any meeting I was in was a mixture of political people and policy people. He did some meetings with just political people. Didn’t do a whole lot of meetings with just policy people, for good reason. And you know, with, I would say the standard meeting, his approach, not every president, is this way. He really wanted to understand the policy side and the substance. What are the policy options here? What are the consequences of the different options, and he just wanted to hear from the policy people while he sorted that through and figured it out. And if it was a hard issue, we might spend an hour on it. It was an easy issue, it might be five minutes. Then he’d say, Okay, now I understand that, and I have a view. And by the way, understand doesn’t mean we would teach him and he would now understand what we taught him and repeated. He had a lot of views of his own, so it’s very much a back and forth debate with each other, debate with him. And at the end of that process, he’d have a view, and then he’d bring his political advisors in. And, you know, can I get that done? If I can’t, what else can I get done? What would be the path to it if we do it, you know, how unpopular would we be? What would it affect something else? And that would be the next part of the conversation. You’ve got a memo in advance of the meeting. You knew he read it from beginning to end, and you knew that because he would underline and write things in the margins, and you get a PDF scan of that back before the meetings. You had a sense of what he had read and what he thought about it. If. You were presenting him a PowerPoint deck, and you made the mistake of reading every word on every slide, the way some people do on PowerPoint decks. He would flip through all the slides, read them all himself, put it down and start glaring at you. Some people picked that up instantly and stopped the plotting through every slide and reading everything. There were definitely the occasional person that would go an extra 15 minutes after they were being glared at, because it was clear he understood everything already, and wanted to be interactive and maybe tell them afterwards to do a better job reading the room the next time. And yeah, I mean, it was just you mostly discuss things with him, because there’s no easy answer. If there’s an easy answer, there’s a consensus among his advisors. And you don’t bring it to the President. You go to the President when you disagree. Go to the President when they’re when things are hard, you go to the President and everything has a downside. I guess the very, very last thing I’ll say, although if you ask more questions, I’ll say more, of course, is just very good at compartmentalizing. I mean, I remember once he was late because there had been just horrific school shooting. I don’t remember which one it was. He gone to the briefing room. He gave a very emotional statement in the briefing room. And then he came to meet with us to talk about, I don’t remember what, you know, international corporate tax policy or something. And he went straight to that. And he was super focused and engaged in whatever the topic was. They said, maybe it was international corporate tax policy. And I don’t think he was pretending to be emotional in the briefing room. Who could not be? It was horrible. I felt I was more emotional still than he was. But he had to go from topic to topic. And did a, I think, quite good job with that.

 

Will Bachman  26:45

Other than that, it was asked by the Democrats, Why did someone so many people oppose the Affordable Care Act? What’s the steel man argument against it? Is it because it raised some people’s taxes I could never quite understand, like, why people I mean,

 

Jason Furman  27:05

there’s an argument from the left, which I don’t think you’re referring to, that single payer we should have more government involvement. And there’s pros and cons of that approach. I think there was a 0% chance we could have passed it, so I lose zero sleep over it. But substantively, yes, there might be better, better approaches that we didn’t do. I think, first of all, there’s a large amount of redistribution in the Affordable Care Act. We paid for a lot of it with higher taxes on rich people, and a lot of the money went to people that are poor, and some people don’t want the government to be doing more redistribution. I think people should keep more of the money they earn, and that’s fair, and you shouldn’t take it away from them, and they think other people should have more motivation to, like, work hard and find a job with health insurance, or, you know, whatever it is, than they do right now. So that would be one type of argument was that it was redistribution. It included a government mandate for health insurance. Now, originally, that idea came from a conservative think tank called heritage. It was done in Massachusetts by a Republican governor, Mitt Romney, but it did reduce your freedom. Our idea was you shouldn’t have the freedom to free ride off someone else. Same thing with the way premiums were set. We said it has to cover pregnancy and delivery. That means the average cost of health insurance goes up for men and down for women. So you’re telling a single man who’s 30 that you’re paying for health insurance coverage even though you’re I am. You’re paying for pregnancy, delivery, etc, even though there’s zero chance that you’re going to get pregnant and deliver a baby, I think that’s the right way to socialize, by the way this risk and this choice. So I have no problem with that, but you asked for arguments. So I think there’s a set of moral arguments around individual freedom that it ran up against. It had a certain conception of sharing, whether sharing was redistribution, sharing was everyone paying the cost of pregnancy, or sharing was everyone needing to get health insurance? And that’s, you know, those people have a philosophical difference with all that. But yeah, I also agree politics played a big role in who came up with it and how.

 

Will Bachman  29:17

Tell us a bit about how did you decide to come to Harvard, back to Harvard and teach when I imagine there might have been other choices that you faced as the former chairman of the Council of Economic Advisors, you know, going and joining an investment bank, or being on boards of companies or or other sorts of commercial Type ventures. What drew you back to academia?

 

Jason Furman  29:43

Yeah, so I thought you’re gonna ask why I went to Harvard in the first place, and that was I was choosing between Harvard and Stanford, and met somebody who was a freshman at Harvard, and she was really, like, cute and charming, so I thought that would be the better school for me, and that’s why I went to Harvard. That’s not why I came. Back, though, and you know, for me, eight years in government, I, over that time, became less political, more reconnecting with my roots, which were in economic research and thinking objectively and quantitatively and theoretically about economic issues. The Council of Economic Advisors, we did a lot of reports and the like about the economy, because couldn’t get as much legislation done in 2016 or couldn’t really get any legislation done in 2016 so it was trying to shape the dialog and the way people thought about the economy. And so for me, being in a university again, was really natural. I love teaching. It is so much fun teaching, explaining things, talking to students. There’s a lot in common with EC 10 and the White House. Both of them, the main people you’re talking to, are not trained in economics, but they’re quite smart, and they’re only interested if you can explain it to them, if you just assert, hey, economists think you should do this, no one in the White House is persuaded. A student might repeat that answer on a test because they have to, but they’re not going to be persuaded. If you say, if you do this, then more people will want it, and then there won’t be as much of it, and then the price will go up. And that will lead to this other thing that’s related to it, the price go down. And here’s a study someone did in the UK, and the same thing happened there, you know, all of a sudden, people start to be persuaded and and start to listen. So being able to do research and think about the world objectively, rather than just repeat, you know, the talking points, being able to teach and explain things. And then finally, I did want to continue to have an impact and a voice in public policy, and didn’t need to be at Harvard for that. There’s think tanks, there’s other places, but this is a perfectly great place for that. And when I write things in the wall Free journal, or I have a regular column or tweet, they probably get more attention than they deserve on average. Educationally, they get more vitriol. This out of touch Harvard professor things blank, Isn’t he an idiot? So I you know, but I think on balance, I get, you know, get, get a little bit more attention than I deserve in a positive way, rather than a negative way. And and I continue to try to engage in public policy, but as someone with some amount of expertise and experience weighing in, you know, weighing in from afar.

 

Will Bachman  32:33

Can you think of any ways that your economic research now is different because of your kind of practical experience in the real world of policy making than it would have been if you had followed a more straight course through graduate school into, you know, being a professor.

 

Jason Furman  32:56

Yeah, I do very policy oriented research. I mean, my research is about tax reform and sustainability of deficits and sources of inflation and questions like that, most of which I worked on in government. So once upon a time, I had all sorts of theoretical things I was excited about. I still enjoy theory as a certain level of theory, my abilities in it aren’t as good as they used to be. I enjoy it. It’s fun. It’s like a sport, but a spectator sport, not a not a participant sport. But everything I do is related to things I did in government, things that the government is doing now, things that things that come out of it. And different economists are different. I think it’s, I don’t think everyone should do that. I think there’s a lot of pure research, I think trying to understand the world for the sake of understanding the world. That’s what social science is about. That’s a wonderful, amazing thing to do. But for me, it’s less that abstract social science for the sake of social science, and more trying to understand what ought to be done.

 

Will Bachman  34:02

Wanted to get your quick reactions to some policy areas, your kind of quick takes Trump’s proposed tariffs. What tell us about the impact of those? Yeah,

 

Jason Furman  34:16

I mean, like most economists, I’m an unbalanced, unbalanced partisan when it comes to tariffs, I hate them, no matter which party is doing them. And if he did literally 10 or 20% tariffs on every country in the world, we’d have higher prices here. We’d have fewer jobs. It would actually probably hurt American manufacturing, because it would raise the price of a lot of inputs that you need to make manufactured goods would make our manufacturers more competitive, plus the rest of the world would retaliate against us. So I think that idea is madness. Tariffs on China aren’t quite as crazy, because we do have legitimate issues with China, but 60% across the board, I don’t think it’s going to solve those. Issues, and I think it’ll hurt us more than it hurts China.

 

Will Bachman  35:04

What should big cities like San Francisco and New York do about housing? The Harris campaign had a strongly leaning towards the yimby view of build more. What should cities do to

 

Jason Furman  35:16

I am absolutely yummy, yes, in my backyard. Just had a recent op ed in the Boston Globe about a set of zoning reforms that are happening in Cambridge that would allow building buildings of it at least six stories anywhere in the city. The issue with housing in this country is we don’t have enough supply. The reason we don’t have enough supply is that people aren’t allowed to build, so we just need more building. Now for low income households, you need to expand housing vouchers. There’s a housing voucher program that right now, I think only about 20% of the people who are eligible. Is there enough money to serve them. There should be enough to serve everyone. So I think for some people, we need to help subsidize the housing, but for most people, we just need cheaper housing, which means we need more housing.

 

Will Bachman  36:06

You mentioned earlier, the impact of immigration on or cracking down on immigration on inflation and prices say a little bit more about

 

Jason Furman  36:16

that. Number one, most important economic issue is immigration. Immigrants are the labor force. Without Immigrants, we’d actually have a shrinking labor force, because the population is getting older and the fertility rate is below the replacement rate. And so the only reason we have a growing workforce is immigration. And then immigrants bring ideas, innovations, productivity, start businesses, and that’s businesses from your local bodega to, you know, Google, all the way across the spectrum, and we need all of those businesses. So there’s nothing better we could do for the economy than expand immigration, and there’s nothing worse we could do for the economy than limit it. What’s

 

Will Bachman  37:02

your reaction to the chips act?

 

Jason Furman  37:06

I am so far so good. Is my reaction? It was a very legitimate goal. 90% of our advanced microchips come from one island, Taiwan that’s in a very vulnerable place. Geopolitically, we need to be making more in the United States. It’s not economically efficient to do that. They are much better at making them there in Taiwan than we are here. But it is worth paying a cost for the extra resilience. They put in a relatively small amount of money. The manufacturing subsidies were $39 billion and TSMC, which is the Taiwanese chip company as now making three fabs in the United States, and considering a fourth, several other companies making them as well. So so far so good. We’ll see. You know if it all, if it all works out too soon to be positive, but I think that was money worth spending.

 

Will Bachman  38:00

Sounds like you’ve been pretty busy at work with research and serving in government, outside of work, what has how have you spent your time?

 

Jason Furman  38:11

I have three children, and that is a lot of time and a wonderful amount of time with them. In fact, I can’t one of them will go to college, is graduating from high school this year, when I’m graduating from high school next year. But I have a nine year old, so I have at least nine more years of someone in the house, and I’m not I’m not sure what I do on weekends and at nights without them. But other than children, I’m just an obsessive reader. Any moment I can get when I’m not working and not with children, I’m probably reading a book, and I review all my books on Goodreads. I have over 1000 reviews there. Now, a review might range from three sentences to three pages, and a book might be anything from trashy science fiction novella to, you know, one book about economics and just love them all. Love Reading,

 

Will Bachman  39:01

off the top of your head, any three to four recent books that you would recommend to classmates.

 

Jason Furman  39:10

So everything by Colson Whitehead, as well as everything else by everyone in our class, because we have so many great authors in our class. But beyond that, I thought the weirdest people in the world, by Joe Heinrich, who is a professor here at Harvard, is just an amazing book about combines genetics, evolutionary biology, economics, cultural studies, religion. To paint this amazing picture of the world. I just read Don Quixote over and over again. I don’t know that anyone needs my recommendation for that, but I think it’s if you want to understand Washington, maybe read Don Quixote. And I don’t know, some so many books, look at my Goodreads.

 

Will Bachman  40:02

What classes or professors that you had at Harvard continue to resonate with you?

 

Jason Furman  40:08

Well, certainly act 10. Marty Feldstein was the one that taught me act 10, and then we became he was a mentor of mine. He became a friend of mine. We saw each other regularly. When I was in government, he would come by and just an amazing, amazing person. And so that class resonates. I still remember, you know, he’s on the first day, he said this thing about in the media, they show all economists disagree. But if you look at what actual economists do, they agree on the majority, large majority of things. And I use that line when I teach my class on the first day of class, and I know I’m just repeating something I vaguely remember, possibly even misremember, him saying there are other economics classes I really liked. I took a class on economic history by Professor Jeffrey Williamson, who was here when I first got here, but, but retired now. And I love social studies. 10 it was, it was just a great class and a great tutorial. And I continue to remember and think about those ideas to this day.

 

Will Bachman  41:20

Where can people find you online? Where’s the best place to follow your postings? And for now,

 

Jason Furman  41:26

I’m I’m still on Twitter, and for me, the benefits of it, in terms of reaching policy makers, reaching academics, reaching the media, outweigh the costs. But it gets worse by the day people leave every day. I’m diversifying a little bit over to to blue sky. I write once a month for The Wall Street Journal, so if you have a subscription to that, you can find me there or just Just look around.

 

Will Bachman  41:53

Wonderful Jason. Thank you so much for joining today.

 

Jason Furman  41:57

It was great to be on with you. I’ve really enjoyed so many of the other conversations where I even learned things about people I might even have lived with during college that I otherwise would not have known I.