Laura Tyson, who is a professor of business administration and economics and director, Institute for Business & Social Impact at the Haas School of Business, addressed a wide range of topics during her conversation with SPP Founding Dean Wolfgang H. Reinicke on April 14.
In his introduction, CEU President and Rector John Shattuck lauded Tyson, who is former dean of the Haas School of Business and the London Business School and former chair of the President’s Council of Economic Advisors and of the White House National Economic Council, as an “extraordinary bridge builder.” Shattuck noted that Tyson had bridged many worlds during her career, including the academic and policy worlds. Shattuck said that CEU’s School of Public Policy was also a bridge between these two worlds.
Tyson, who advised Hillary Clinton during her presidential campaign in 2008 and will be doing so again in 2016, spoke mostly about the U.S. economy. She credited President Barack Obama for doing “the right thing in regulatory reform and stimulus packages” to get the U.S. out of what could have been another Great Depression; and also for introducing health care, which she described as a “major and dramatic change.”
Tyson said that although there had been strong growth and low inflation between 2001 and 2007, the average American family had “made no gains.” She said that one reason for this was the significant decrease in manufacturing jobs during this period, which was due in part to China joining the WTO in 2001.
Describing herself as a “structuralist,” Tyson said that a lot of what has happened to the American middle class is due to globalization and technology. But the erosion of unions and the decline in the real value of the minimum wage were also contributing factors. She bemoaned the income-based gap in educational achievement in the U.S. noting that income inequality leads to educational inequality, which leads in turn to increased income inequality in a vicious self-reinforcing cycle. Tyson noted that one of the big challenges in the U.S. was to enact policies that would assist struggling families. Tyson said that helping U.S. families would be a big part of Clinton’s campaign. “We have the worst family support policies among the developed countries.” Tyson said. “To boost the economy, we need to strengthen family policies.”
In response to a question from SPP student Jonathan Vega Perez (MPA ’16), Tyson said that she thought that there was a tendency to exaggerate the role of energy interests in U.S. politics. She said also that she did not think that Clinton would be a “shrinking violet on climate change” noting that John Podesta, who has a strong record on environmental issues, was her campaign chair.
Another issue that Tyson touched on during her remarks was the link between growth and inequality. She described the economic evidence on this link as “unclear.”
Tyson spoke also about the prospects for trade agreements such as the Trans-Pacific Partnership (TPP) and the TTIP (Transatlantic Trade and Investment Partnership). She believes that these agreements would create net benefits for the U.S. economy and advocates programs to assist workers and communities to adjust to the competition from such agreements in order to distribute their benefits more broadly. Tyson noted, however, that some “serious progressives” (such as Professor Joseph Stiglitz and Senator Elizabeth Warren) oppose these agreements because they believe they would have a negative effect on middle-class jobs and wages.