Larry Summers – this former Secretary of Treasury, who has never been known as a “warm & fuzzy” person, gave the most “academic” or boring speech. He thinks the world has indeed changed, with equilibrium interest rates apparently stuck at zero, an unhealthy place. To break out of this state of equilibrium, he advocates a typical Keynesian approach of massive government spending on infrastructure.
Alan Greenspan – this former Fed Head was pleasantly interviewed on stage. He thinks interest rates will start rising this Fall. His assessment of the economy is “more of the same,” in the 1.5-2.0 percent range of GDP growth. This disciple & personal friend of Ayn Rand advocates a typical Republican approach of reducing regulation and “simplifying” the tax code. The basic problem with the American economy is that the American consumer consumes, as instructed by advertisers, instead of saves.
Alice Rivlin and Douglas Holtz-Eakin – both of whom have served as head of the Congressional Budget Office. They tried to argue like the Democrat and the Republican they are. However, because they were not holding public office and because they were talking to a pack of nerdy economists, they actually agreed on most things. America would be better off if we allowed these two individuals to run the country for the next year.
Jean-Claude Trichet – the former head of the European Central Bank was awarded the lifetime achievement award. He would not have been my choice. I am thankful he retired in favor of Mario Draghi, who would get my vote.
There was also an interesting panel discussion about Obamacare. While I expect there were an equal number of Republicans and Democrats, there was no broadside condemnation, just an acceptance that certain aspects of it need to be fixed. As economists, they keep coming back to the counter-factual question of what would it be like without Obamacare, i.e. control by health insurance companies instead of control by a government? Seriously, how would it be different without Obamacare? (This makes Democrats happy.)
And, at a cocktail party in the Finnish Embassy last night, there was near universal agreement that our method of approving international trade agreements was worse than useless, and the President should have “fast track authority.” (This makes Republicans happy.)
And, that was just the first day!