Skip to content

Economic challenges take center stage

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.”

– by Matt Collette

More Stories

Photo of the Capitol Building at night

High stakes for politics, SCOTUS in 2018

Photo of the crashed truck that was used in the October 31st attack in Manhattan.

Weaponizing Language: How the meaning of “allahu akbar” has been distorted

Northeastern logo

Why I love studying Spanish