With Election Day less than two months away, two former White House economic advisers discussed the differences in policy approaches of the presidential candidates.
In an online event hosted Tuesday by the Stanford Institute for Economic Policy Research (SIEPR), Austan Goolsbee and Kevin Hassett engaged in an hourlong conversation that covered the most pressing topics facing the nation — from how to deal with the pandemic’s economic crush to hot-button policy issues like taxes, immigration and trade.
The event, moderated by Gopi Shah Goda, SIEPR’s deputy director, featured two economists with largely divergent views as they explained — and sometimes sharply criticized — the economic strategies of President Trump and former Vice President Joe Biden.
Despite divisive rhetoric surrounding the election, both Goolsbee — the former chairman of the Council of Economic Advisers during the Obama administration — and Hassett — who held the same job in the Trump White House — avoided an overheated debate and put a premium on policy differences rather than partisan talking points. But the event wasn’t without its political barbs.
Here’s a glimpse of their exchange:
On COVID-19 economic relief: Both agreed on the merits of supporting Americans and businesses through the pandemic-related shock, but they said the politics has been problematic.
Hassett said the first stimulus package — thanks to bipartisan agreement — was meant to build a bridge through summer, but now that COVID cases are even higher, “we need a pontoon bridge to get to the other side of the fog, and that’s a really big task.”
“The Democrats should be commended for working together in the spring and scolded a little bit for not working together now,” he said.
Goolsbee said the administration’s pandemic-related responses could arguably be “in the top three worst things the government has ever done.”
“If the pandemic is not going away, then we’re going to have to keep propping up the economy,” he said. “It’s not stimulus. This is mostly trying to keep warm by burning money while the furnace is out.”
On taxes: While Goolsbee talked about how Trump’s tax cut did not and will not boost economic growth as promised, Hassett pointed to the most recent Census data and how there were overall gains in household income.
“There’s no evidence that there was any incremental impact of those tax cuts on wage growth,” Goolsbee said. Those wage increases were already happening, he said.
As for Biden’s proposal to raise the corporate tax rate up to 28 percent and use the gains to help the middle class, Hassett called the return to a higher tax rate “harmful” and predicted that if Biden wins, “he’ll run on tax-the-rich claims to get the left-wing base really excited, but then he’s not going to do it.”
On trade: As Hassett defended Trump’s initiatives to get concessions and correct for the “asymmetric” trade deals the U.S. had made in the past, Goolsbee discussed the negative impacts of the recent tariffs to agricultural and manufacturing industries.
Goolsbee contended the repeated “muscular declaration of trade wars and threatening of trade wars” to U.S. allies and adversaries is not working.
“If you want to get China to change its behavior … you get your allies on the same page,” Goolsbee said. “And if Trump is reelected, absolutely you can expect that we’ll go back to this pattern of: threaten war, threaten war again.”
“Being sweet and nice with our allies is a great feel-good thing for a person to do,” he said. “But decades of that led us to inheriting a system that is profoundly asymmetric.” Trump has improved the U.S. position on trade, he said.
On immigration: Goolsbee said evidence has shown how immigration has benefitted the economy, and criticized the current administration’s stance on immigration.
“This is not the American way,” he said. “It’s culturally horrible and economically worse.”
Hassett pointed to a set of reform proposals that percolated in the Trump administration but didn’t gain traction in Congress.
“In this heated political climate, that bill didn’t make any progress,” he said.
What they wanted the audience to walk away with:
Hassett pointed to Trump’s pre-pandemic record and economic decisions as a set of policies that will serve the country well in a recovery.
“The policies of deregulation and prudent tax reform were working,” he said.
Goolsbee said Trump’s economic policy took a “trickle down” approach that historically has not spread wealth as expected. He said there are two world views at play: Trump’s plan sets out to benefit wealthy Americans, while Biden’s plan sets out to bolster the middle class.
“On the economics side,” Goolsbee said, “I think the choice is clear.”