The 2018 SIEPR Economic Summit traversed a diverse terrain of current affairs — from Olympic glory and the future of work to the repercussions of politics and the depths of the opioid crisis.
The annual daylong conference, in its 15th year, convened more than 400 thought leaders in academia, policy and business. Former Secretary of State Condoleezza Rice and the White House’s chief economist Kevin Hassett bookended a series of thought-provoking and insightful sessions.
Experts on the opioid epidemic plumbed the saddening grip of addiction and traced its roots to prescription drugs and economic despair. The panel on the economics of the Olympic and Paralympic Games gave insider perspectives from both the organizational aspect and the athlete’s journey to winning gold.
And while a panel of technologists and artificial intelligence economists delivered an optimistic outlook for the interplay between automation and employment, the governor of Rhode Island, Gina Raimondo, advocated for the need for more “middle-of-the-road” politicians willing to undertake risky solutions.
Highlights from the March 9 speeches and panel discussions — and opportunities to watch recordings of some sessions — are below. You can also enjoy more photos from the day on our Facebook page.
Additional panels were also held on China’s leadership, Brexit and the EU, and cryptocurrencies.
More information about the panelists and featured speakers can be found on the Summit agenda.
Condoleezza Rice on geopolitical shifts
With so many parts of the world and the White House in immediate flux, Rice had plenty of topical issues at hand as she opened the Summit with remarks on “A Changing World Order.”
First up was North Korea. The day after President Trump agreed to meet with North Korean leader Kim Jong Un, the former secretary of state expressed worry that the administration is ill-prepared for such talks.
“My biggest fear isn't that they're meeting,” said Rice, a professor of political science at Stanford. “My biggest concern is that the North Koreans extract some concessions without giving up very much because the nuances aren't well understood.”
Rice was surprised to learn that Trump accepted an invitation from Kim to discuss denuclearizing North Korea, and speculated that the announcement took many in his administration off-guard, as well.
“It's rather rare that if you're a despicable, adversarial regime that your first meeting with the U.S. is with the president,” said Rice, who is also the Denning Professor in Global Business and the Economy at the Stanford Graduate School of Business and the Thomas and Barbara Stephenson Senior Fellow on Public Policy at the Hoover Institution.
Rice said the current makeup of the State Department lacks expertise on North Korea — a deficit that needs to be corrected immediately.
The U.S. has been trying to get a handle on North Korea’s nuclear armament for quite some time, and the Trump administration needs to “find someone who actually knows something about North Korea,” she said. “They’re going to have get their arms around this quickly.”
To the extent possible, she said, Trump should “make this a photo op” to guard against detailed negotiations that could be counterproductive — or harmful — to American interests.
In her remarks and during a conversation afterward with Mark Duggan, the Trione Director of SIEPR, Rice shared a wide-ranging perspective on global security, what she called an “assault” on free trade, the importance of promoting human rights around the world, the benefits of globalization and the importance of supporting America’s allies.
“It’s very easy to not tend to the relationship with our allies. George (Shultz) called it ‘gardening,’” Rice said, tipping her hat to another former secretary of state and fellow Stanford faculty member who attended the Summit. “But this is the time to garden…They are still our best strategic partners. They’re still the ones who share our values. And they’re still the ones who most likely will defend the liberal order.”
Rice railed against the political trends toward populism, nativism, isolationism and protectionism, calling them “the four horsemen of the apocalypse” that threaten to weaken America’s global leadership. Globalization, she said, will help ensure international security and economic stability.
“We haven’t wrecked it yet,” she said. “It’s a question of whether we’re going to re-engage.”
After delivering her remarks, Rice was off to lead a simulation of a North Korean disarmament with her undergraduate class.
No, she joked. She does not have a crystal ball.
Video of Rice’s session is not available.
Robotics, AI and the future of work
Humans will always be in the equation.
So don’t worry, said the panelists of the Summit’s second session, who explained how threats to employment are far from apocalyptic even as automation and artificial intelligence are expanding.
If done right, the use of AI should grow the economy and help accelerate solutions to vexing problems, they said.
“Even as occupations decline due to automation, there will be enough growth and demand for work to make up for jobs lost,” James Manyika, of the McKinsey Global Institute, tells the Summit audience.
Photo by Ryan Zhang
The panelists’ optimism is drawn from deep expertise — from the frontiers of research and robotics as well as the business world.
From Susan Athey, the Economics of Technology Professor at the Stanford Graduate School of Business and a SIEPR senior fellow: “We have a robotic RA to look at billions of data points for our statistical models, but extrapolation…still requires human judgment.”
You need a human to manage the algorithms and decide the broader contexts, she said.
From James Manyika, chairman and director at the McKinsey Global Institute, a leading AI and robotics expert and former presidential advisor: “Before, we were automating physical tasks, and now we’re automating more cognitive tasks, but what isn’t different is the pace of adoption.”
“So how it plays out in the labor market won’t be vastly different,” he said. “Even as occupations decline due to automation, there will be enough growth and demand for work to make up for jobs lost.”
From Reid Hoffman, co-founder of LinkedIn and a venture capitalist at Greylock Partners: “The key thing to think about is that technology can be directed” and “solutions have to be adaptable.”
“Jobs will be created essentially through entrepreneurship,” he said.
Responding to an audience member’s question about bias potentially getting “baked into” algorithms that are producing predictions or answers, the panelists agreed it is an important issue to consider. But in practice, Athey said, AI “tends to have a de-biasing effect.”
Citing automated resume scanners as an example, Athey said machine learning algorithms can avoid pegging information to stereotypes, such as a human’s bias for one university education over another. “They have the ability to overcome human biases rather than reinforce them,” she said.
View the video for the entire discussion on the impact of AI on the labor market, moderated by Richard Waters, the West Coast Editor of the Financial Times.
The economics of the Olympic and Paralympic Games
Olympians Maya DiRado (center) and Janet Evans participate in a panel discussion about the economics of the Olympic and Paralympic Games with Gene Sykes, CEO of LA 2028.
Photo by Ryan Zhang
This was a winning panel, literally.
Two gold medalists — Janet Evans, considered the greatest female distance swimmer in history, and Maya DiRado, who took the podium four times in 2016 in Rio de Janeiro — were joined by Stanford’s Paul A. Violich Director of Women’s Swimming Greg Meehan. Meehan, who mentored DiRado and two other Olympians as well as a Paralympian, led Stanford in 2017 to its first national women’s swimming championship since 1998. Gene Sykes, a member of Stanford’s Board of Trustees who headed the successful bid for the Olympic and Paralympic Games to be held in Los Angeles in the summer of 2028, moderated the panel.
The numbers the panelists shared — both the sports stats and economic data — reflected impressive stories of policies that worked and determination that paid off.
A small sampling:
Age 15: That’s when Evans burst onto the swimming scene, winning four gold medals at the U.S. national championships. She went on to clinch gold in all three of her races at the 1988 Games in Seoul and has broken seven world records and won five Olympic medals. Her commitment was cemented after seeing the opening ceremonies of the LA 1984 Games at age 12. “I wanted it so badly I outworked everyone,” she said.
52.7 percent: This is the share of women athletes on Team USA, an affirmation of how the strength of women sports has grown since Title IX legislation passed in 1972, when the Games in Munich had only 1,000 women competing out of total 7,000 athletes, and only 84 of the 400 U.S. athletes were women. In 2016, not only did the women outnumber the men, they won more medals.
$5.7 billion: This is the revenue the International Olympic Committee raised during the 2013-2016 quad. About 90 percent of that was distributed to various organizing committees, national Olympic committees and sports federations. But the cost of the Games can run higher: Russia reportedly spent approximately $50 billion in 2014, and Tokyo, if it stays on budget, will spend between $13 billion and $16 billion in 2020. LA 2028 is able to have a balanced budget with a $500 million contingency (the first in Olympic history) by relying on existing venues and avoiding costly construction projects.
Video of the panel discussion is not available.
Beyond Rhode Island: Risky politics
Rhode Island Gov. Gina Raimondo explains the importance and need for more moderates on the political landscape.
Photo by Ryan Zhang
Here’s a page from Rhode Island Gov. Gina Raimondo’s playbook.
Take risks. Be a problem solver. Stop playing the polarization card.
“On a political level, our democracy needs a balance,” she said. “If we stay stuck where we are as a nation in this extreme partisanship, this movie won’t end well.”
Raimondo’s call for the need for more “middle-of-the-road problem solvers” follows her own modus operandi.
What’s it like to be attacked both from the left and the right? asked the session’s moderator, David Crane, a lecturer in public policy at Stanford.
“It’s incredibly difficult to be a moderate … in American politics today,” she said. “This may not shock you, but I’m not exactly beloved by the teachers union, the firefighters, or the police.”
Raimondo, a Democrat who took over the top executive office of the nation’s smallest state in 2015, has stood up to criticism for instituting a massive pension overhaul and seeking to protect immigration policies, among other things. But since she took the helm — and the heat — Rhode Island went from having the highest unemployment rate in the nation to the national average. In the meantime, taxes have not gone up but have been cut, each year.
“I’d rather get it right and fix things — and hopefully get re-elected,” Raimondo said. “I’m trying to chart out a course of moderation and bipartisanship and show that it’s possible to do that and be politically popular.”
Sometimes even the smallest interventions can have tremendous effects, she said. The implementation and related financial support for tuition-free community colleges as well as the added option of a free SAT test to be given during school hours has helped spike participant levels, she said.
For detractors and skeptics, “I spend a lot of time explaining the consequences of doing nothing,” Raimondo said.
“My tagline is, ‘this is math, not politics.’”
Watch Raimondo’s full remarks on “Meeting the Needs of the 21st Century State.”
The affliction of addiction
Heavy doses of grim data and statistics marked the Summit’s fifth session, illustrating what panelist Anne Case called a “sea of despair.”
Mortality rates due to so-called deaths of despair — suicide, alcohol and drugs — have been climbing steadily since the 1990s, affecting both men and women in urban and rural regions. The increases were large enough to lower life expectancy in the U.S., and studies show that the crisis has been deepening with each successive birth cohort.
Those afflicted are largely confined to individuals without college degrees, and white, working-class men are hardest hit, said Case, a health economist at Princeton University.
“The current opioid epidemic is a symptom of our health care system,” says Anna Lembke, right, during a conversation with SIEPR’s Mark Cullen and Princeton Professor Anne Case about the drug problem.
Photo by Steve Castillo
Job deterioration and the market inundation of prescription opioids, combined with other cultural, socio-economic factors, have contributed to today’s drug epidemic, she said.
Some experts missed the early signs, said the panel’s moderator, Mark Cullen, a professor at the Stanford University School of Medicine and a SIEPR senior fellow.
Around the time of the Great Recession, he explained, early looks at the data focused more on positive health outcomes, such as the remarkable improvements of mortality rates among blacks.
Meanwhile, the crisis — as everyone sees in their communities today — loomed.
“The current opioid epidemic is a symptom of our health care system,” said panelist Anna Lembke, an associate professor at the Stanford University School of Medicine. “Big pharmaceuticals have co-opted big medicine.”
In the 1980s, doctors would not prescribe opioids because of addiction fears. But by the 1990s, doctors were dispensing them like vending machines to people who complained of pain, Lembke said. Now, doctors are engulfed, she continued, outlining the various psychological profiles of patients.
“Opioids have become the solution not to patients’ problems, but to doctors’ problems,” she said. “These are compassionate doctors who are part of a system that has gone bad.”
Doctor ratings systems — like those of restaurant reviews — have only complicated the situation.
“I’ve been all over the country urging doctors to prescribe opioids more judiciously,” Lembke said. “Without fail, they say, ‘We’ll start prescribing fewer opioids when you can promise patients will still give us good scores.’”
How can we make a dent? Cullen asked.
If we can't offer people a brighter future, they will take things that will numb themselves, Case said.
View the video for more signs of the times, including “Narcan parties” with designated providers of the opioid antidote, and areas for change in culture and policy.
Economics from the White House
Fresh on the heels of completing the 568-page “Economic Report of the President,” Kevin Hassett was quick to tackle sticky questions during his keynote address at the Summit — and often in defense of President Trump.
When it comes to the longstanding target of a 3 percent rate of economic growth, Hassett, the chairman of the White House Council of Economic Advisers, contended it’s worth another view.
“Maybe we’ve just been making policy mistakes,” he said, and for the past eight years, economists have been making excuses for the low growth.
John Taylor, the Mary and Robert Raymond Professor of Economics and a SIEPR senior fellow who moderated the discussion afterward, asked Hassett to elaborate on how regulatory reform or tax reform could change this idea of stagnation.
Kevin Hassett, chairman of the White House Council of Economic Advisers (left) speaks with SIEPR Senior Fellow John Taylor about economic policymaking in the Trump administration.
Photo by Ryan Zhang
“If you chase capital away from this country, it’s bad for the country. It’s not rocket science,” Hassett said, adding how the high corporate tax rate led to offshore tax havens.
“If we fix the bad policies, then capital will come back and growth will go up.”
Hassett also defended Trump’s stance on trade.
“We live in this strangely asymmetric world where the U.S. has opened their markets to everybody else, but they haven’t opened their markets to us,” he said.
As for Trump’s controversial move earlier in the week to impose new tariffs on imported steel and aluminum, Hassett said “that’s a signal about the types of policies to expect from this administration.”
“He’s tired of things that don’t make sense,” Hassett said.
Taylor, who is also the George P. Shultz Senior Fellow at the Hoover Institution, drew the conversation back to the opioid crisis, the topic of an earlier Summit panel. “What are you going to do about it?” he asked.
As the head of the CEA, Hassett noted he has a bully pulpit to help the president think about priorities, but it’s not his role to set economic priorities.
While previous economic estimates did not include the cost of lives lost, Hassett said this latest Economic Report did — and found that the drug epidemic cost the United States $500 billion in the past year because of direct expenditures and loss of lives.
With portrayals of “chaos” in the White House and a revolving door of resignations, including that of chief economic advisor Gary Cohn earlier in the week, “can you comfort us in some way?” an audience member asked.
What you see in the media, Hassett said, “is inconsistent with the White House that I experience every day.”
Watch Hassett’s full address and Q&A moderated by Taylor.