My guest today is Jason Furman, the former economics advisor to President Barack Obama who now teaches at Harvard and is busy these days tearing into the failure of both Joe Biden’s economic policies and Donald Trump’s. Furman is a pro-market liberal Democrat who has emerged as a serious defender of the benefits of global trade and limited government. He admirably has also amended his ideas about debt and AI, based on changing circumstances.
I highly recommend his recent Foreign Affairs article on “the tragedy of Bidenomics” and New York Times essay titled “Trump Is About to Bet the Economy on a Theory That Makes No Sense.”
We cover a lot of ground, including why ‘free money’ is a bad thing; why younger economists are increasingly ideological; and why technophobia is a recurring problem in society. Here are some pithy quotes, followed by a list of topics and embeds of video and podcast versions (you can always click above to watch or listen and access a transcript).
On the role of government spending in recent inflation: "You give people enough money to buy 1,100 [units] at the same time that something's happened to the economy so it can only make 900... you're just going to get higher prices for the existing [goods]... So the result was just much, much, much more money than we could possibly make in terms of stuff. And so it drove up the price of that stuff."
On Biden’s CHIPS Act: "From an economic perspective... I think we're gonna get worse microchips and not create great jobs... I'm willing to pay in cost in terms of efficiency to have microchips made here. But if you tell me your plan is going to create more jobs and better jobs and increase economic growth, I'm not going to believe you."
On Trump’s economics: "President Trump in some ways is an even bigger rejection of anything resembling economic analysis, thinking about trade-offs, thinking about gains from trade... For the most part, that’s actually not what Donald Trump is interested in."
On what he learned from his time in government: "At the level of politics and human decision-making, I'm now less enamored by the expertise and genius of our Congress... I now have a little bit of the conservative understanding and skepticism of the wisdom, even of the very best experts."
On creative destruction and AI: "What's really surprised me is that the existing incumbents weren’t the ones that were able to dominate in AI... So OpenAI and Anthropic and Perplexity came to some degree from nowhere... So maybe this is like the opposite of Lucy and the football."
Here are general topics:
0:48— Failure of Bidenomics & the 'neoliberal delusion'
6:00— The neoliberal coalition breakdown
9:37— Trump's post-neoliberal economics
13:08— Biden's biggest economic failures
16:25— Why 'free money' is a bad thing
18:28— The Age of No Accountability
20:19— Why tariffs make no sense
23:52— How Furman 'zigzagged' on debt
29:42— How to get politicians to take the debt seriously
36:32— How to fix social security and Medicare
39:58— Has Furman changed his mind about Keynesian economics?
43:10— Furman's background and the future of Economics
46:50— Furman's outlook on AI
50:16— The Luddite impulse towards technological advancement
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