President Obama and Republican challenger Mitt Romney are rarely in the same place, either physically or politically. But on Wednesday, economic experts who have advised both men shared the stage to discuss the faltering global economy and the role of federal policy in addressing the crisis.
“At just about any point since the Second World War, the question was always quite clear and you knew what the problems was,” said former Harvard University president Larry Summers, an economist who headed the U.S. Treasury from 1999 to 2001 under President Bill Clinton and served as economic adviser for President Obama until 2010. “What stands out at this moment is that you can listen to a discussion of something like the deficit and there are two major cross-cutting themes.”
Summers and Romney’s economic adviser, Greg Mankiw, the former chair of President George W. Bush’s Council of Economic Advisers, discussed the economy on Wednesday evening as part of the Open Classroom series sponsored by the School of Public Policy and Urban Affairs. The lecture series — The 2012 Election: Policy Advice to the President — will be held every Wednesday from 6 to 8 p.m. in 20 West Village F throughout the semester and is open to the public.
Speaking to hundreds of attendees, Mankiw described the 2008 partisan debate over how to address the economic crisis. “The big question that plagued both parties was whether to stimulate the economy by cutting taxes or increasing spending,” he said.
Obama’s approach focused on government spending, Mankiw explained, while Republicans argued for tax cuts. The Republican approach, he said, would leave citizens with more money to spend, bolstering the economy from within.
Summers, on the other hand, argued that it’s more important for the government to spend money than address the deficit over the short term because the private sector has been “some combination of unwilling and unable to spend and lend.”
Government spending, he added, is the only way to stimulate enough demand to address the challenges of “a deeply depressed stuck economy.”
Mankiw and Summers agreed that a solution rooted entirely in either spending or in tax cuts would be neither beneficial nor sustainable. Any attempt to address the nation’s economic woes, they said, must be multifaceted.
Mankiw explained that fiscal policy should aim to “broaden the base and lower rates,” a standard conservative approach. But he also advocated for raising the retirement age, which he said would reduce the burden on entitlement programs such as Social Security and Medicare.
“That’s something that polls much better among economists than the general public,” joked Mankiw. Earlier in the evening, he noted that while he is a Romney adviser, “at times I think it will be clear that I’m expressing an opinion that only a tenured professor could.”
Michael Dukakis, the former Massachusetts governor and current Distinguished Professor of Political Science at Northeastern, moderated Wednesday’s event.
He said it was a privilege to have both Mankiw and Summers on campus. “It’s a great opportunity to have both these men address what is clearly the most important issue of the campaigns,” Dukakis said.
Summers advised his 1988 presidential campaign, Dukakis noted, but then joked, “He was a very good economic adviser — that’s not why I lost.”