Same organization, the same effort with mark and his Wonderful Team who have been wonderful to work with. We have a huge, huge agenda here at the washington policy summit. We have more senior government officials than any location outside of a cabinet meeting. So it should be an interesting day, first time we have had this number of cabinet officials, senior officials on any single stage. But its not just today. We have a busy week. Tomorrow we have a session on Digital Currency for Central Banks cohosting with citi. We have an event, Italian Embassy and the british embassy. On saturday we have a european policy dialogue. And then on sunday we have our Standard Capital emerging markets roundtable where we bring in policymakers and industry representatives. With this year, the topic is Political Risk and its impact, potential impact on capital flows to emerging markets. Pardon me. Thes. Eliot said that april is the cruelest month. I think he wrote that in washington in the midst of changing weather and lots of pollen so if i lose my voice today you will understand why. Anyway, let me start by okay sen waiting the positive. I like to start with positive aspects and frankly we gather here this week. Here today but everyone whos in town for the spring meetings now atmyf world bank at a time when the economy looks pretty good. We are witnessing the best xhek data we have seen since the crisis and theres a sense of confidence and buoyancy. The imf raised Global Growth projections. 3. 6 next year. Thats the first time i remember when the fund came in and revised upward their projections rather than a downward projection from previous forecasts. Pmis from mature and emerging economies suggest a genuine pickup in the global cycle and Business Confidence surged, markets are buoyant, maybe a little too buoyant. We will have a discussion later this morning about whether the soft indicators have become divorced from the hard indicators. But Growth Prospects and the advance economy continue to improve. Fiscal stimulus and lots of excitement about formation and for the u. S. , we see the gdp growing this year at 2. 4 . We have seen half a million jobs created so far this year in 2017 and an Unemployment Rate of 4. 5 that when i was back in graduate school we would have defined as full employment. Europe, looking much better, as well. Expect to see almost 2 growth in 2017 with a best years seen in a long time and that seems to be broadening and deepening across a whole host of sectors and the financeable sector in europe is certainly looking much better. Growth prospects across emerging markets are also looking up. Favorable manufacturing and export do that. I was in brazil and argentina a week ago and in both those economies things look much better than previous years. Russia is turning around and then the news out of china earlier this week from the First Quarter looks much better. As China Economy seems to avoided a hard landing and seems to have stabilize fairly robust growth. Is that sustainable . I dont know. A topic for us today and throughout the weekend. In fact, emerging markets generally are doing much better and those that are engaged in appropriate policy regimes that face low external vulnerabilities i suspect outperform. Others will see some differentiating of the markets among and between emerging markets. But there are risks. And we could spend our day talking about risks. Point of three. What i refer to as the three pz. Productivity, protectionism. Productivity slowed to a glacierlike pace and well below the level needed to raise Living Standards that are populations and our electorate have come to expect and demand. It is one of the most complex and perplexing issues that given the amount of technological change thats occurring why dont we see it showing up in productivity . Marty feldstein that wrote a paper will be with us at the next panel and has deposited that growth is higher than were witnessing but its one of the great issues of our time whether you take the Robert Gordon perspective or perspective of the pro technologists. The second issue is protectionism which lurks in many nooks and corners and is often dressed an ups as a panaca of time of great prosperity. But protectionism does not generate prosperity. Protectionism does not generate prosperity. And thats an issue and a political challenge which all of us will continue to face for the foreseeable future. Nor does populism and we see populism threatening everywhere. We have french elections that start this coming sunday. We have had elections in a variety of other locations around the world. But it does threaten this post war economic and security paradigm that kept the peace for 70 years, lifted billions out of poverty an hundreds of millions into the global middle class. Spending time in argentina and seeing what 12 years of import substitution, populism and protectionism did to that economy and the amount of damage and the amount of change that has to occur is really pretty sobering and we see that in a variety of places. Venezuela. And so, populism, protectionism and productivity are key challenges not only for this week, for this month, but of our time. Lets turn to one of the topics that are going to be addressed throughout the day here today and that is, can the u. S. Economy be a driver of Global Growth . Will the u. S. Consumer return to being the consumer of last resort . And we have seen this new Administration Come in on a whirlwind with a whole host of very aggressive policies. Let me just take on a few of those which well dive into with greater depth throughout the day. Tax policy d. You know that the Trump Administration, Congressional Republicans are eager to take on reform of the tax code . Speaker ryan and chairman of the house ways and Means Committee kevin brady, have a plan sitting on capitol hill for a number of years, very aggressive plan to look at border justification, one of the most sweeping proposals since the 1986 act. The administration is quickly gathering its own proposal. Well hear more about that today from secretary mnuchin and hopefully gary cohn as they assemble when what they think will be the appropriate mix of tax policy and then hopefully over the coming six months or year well see the Administration Work with congress to produce an outcome which is very pro growth, supports Capital Formation and investment. But its hard. We havent had a sweeping tax reform since 1986. 40 years. And the reason for it. All those provisions and tax code exist for a reason. Its very complex. There are winners and losers and already we have seen a huge lobbying campaign both for and against have assembled and will make it very difficult for that component addressed and we have a tax panel this morning, smartest people i know in washington will help us sort through this issue. Second issue is infrastructure. The president ran on infrastructure spending. Throughout the campaign. Weve seen a number of studies over years. Mckenzie and others who have done studies saying the infrastructure gap is between 2 trillion to 60 trillion globally. 2025. How do you pay for it . And there are approaches to using the tax code. There are approaches to using Public Private partnerships and then there are, of course, direct appropriations. And the United States needs infrastructure. If any of you came down from new york on the amtrak, feels like you are in a conestoga ka gone. You know what that means like or flew into dulles. You know that the u. S. Needs infrastructure and i hope were able to move forward. Well expect more from omb director mulvaney later today. Thats an issue in his wheelhouse and my colleague will be interviewing him and hopefully he can shed some information. Financial regulation, which is most important to me and my membership, is the administrations executive order looking at a sweeping review of all financial regulation. Including doddfrank. But not undermining Financial Stability and soundness of the system and certainly avoiding any taxpayer support. Let me say we whole heartedly support this review but we are not asking for repeal of doddfrank. If i have one more reporter saying why are you askingrepeal. But, there are other components that we think needs to address. Its frequency. Yesterday had some components of the c card process and testings. The vocal rules need to be some tweaked to provide some greater clarity. The destination process for non banks, well see some progress there. Some of the provisions and nsfr needs to be reviewed for possible redundancy and its impact on overall capitol and the leverage ratio and its treatment for high quality and liquid assets. Well hear more from issues today and we have a panel later this afternoon. We are out meeting with the a administration, the first key principle reserving the role of coordination of the institutions. A creating standards of minimum standards allow us to avoid fragmentation. That can lead to excessive strain in capitol and greatly increases of compliance call. I would argue makes the Global Financial system more brittle and potentially unstable. These institutions are not perfect. We put out a paper a few weeks ago right ahead of the g20 meeting. We had a conference like this in frankford. If you dont lead on reforming institutions, you are going to get pressured from other parts including the United States congress to do so. The second principle is each and every new regulatory proposal should under go rigorous and analysis. We should identify any excessive cost and unintended consequences or any impact on stability growth that were not intended. Kudos to european officials in 2015 started their call for evidence, theyre ahead of the u. S. And other parts of the global economy. In looking of the impact of regulations and unattended consequences in respect to capitol formation of Economic Growth and job creation and well see more of that and i applaud their Administration Efforts on this bill behalf. The third principle is we need to retain the risk activity. Before the crisis, we price the same asset differently, now, we are running the risk of different assets the same way. At the end of the day, we need a Global Financial system of strong Economic Growth or job creations or we look forward to engaging the administration in their critical review. Finally, let me conclude by taking on the issue which is an important issue for all of us and it should be and thats inclusive growth. We need to ensure that everyone and every part of our society is benefited from Economic Growth. It is great to talk about 4. 5 employment or growth, but in the United States, their there are allegiance in america that dropped out of the work force. Working age men who have left the work force. Their allegiance of others who remained in the work force who are struggling to provide for their family and give their children of a better quality of life. As i have said, we maybe close to full amendmeemployment. There is an alarming rise in suicide and alcoholism and the opioid abuse problem in the United States is devastating. We had over 30,000 people died last year because of opioid over dose, more killed in autoaccidents. We have a high mortality rate among working agent of the United States so we have seen in a long time. It is interesting you see mortality rates dropping across all spectrum of u. S. Society. There is enormous despair in the country despite 4. 5 of employment. What roosevelt must referred to is the forgotten men. Those are our citizens. We need policies that do more than what we just discuss, we need to invest in human capitol and education and school acquisitions and policies that support entrepreneurship and small or medium size businesses. Not just in Silicon Valley or austin, texas. We need to promote financial inclusion, opening up avenues of access to capitol. Capitalism without capital is just another ism. We need to serve all aspects of our society. Thank you very much, i hope you are with us all day long. We have a great lineup with speakers and panels. Thank you for attending, i look forward to interaking wicting w today, thank you very much. [ applause ] okay, lets kickoff the day with the first of our indepth discussion. Forensic look under the u. S. Policy under the Trump Administration. Tim adams will join us back on stage alongside, jared bernst n bernstein, at the center of budget and policy priorities. The professor at economics harvard yu Harvard University and megan green. Please welcome tim and his panelists to the stage. Thank you. Lets talk about the assessment of where we see out economy. Self indicators looked pretty good. The last week or so, the numbers are soften a little bit. Maybe growth and First Quarters is not what we thought it is going to be. How do you judge it and where do you go from here. Sure, fundamentally, the u. S. Is a 2 growth economy. The zone is 1. 5 economy and japan is a half percent of growth economy. It is hard to see us move in that in sustainable way. We have to look at bigger global drivers. You mentioned some of them in your speech, tim. Most importantly productively growth which you know has been negative. This is very much of a developed world phenomena that we dont have any productivity growth. I think fundamentally what we can see is shifting and technology is playing a big part of that. You consider these beg global drivers. They are over whwhelmed of a policies and immigrations and tax reforms. What do you see happening in washington that makes a difference . Well change the trajectory of that outlook . The first thing i see is we never had so much uncertainty on this issue actually, it is hard to see what policies we are going to get. We may get some tax reform. I question whether it is going to help with growth. Income tax reforms because there are quite a few liquidity. So i dont think it will help that much but it will be a bit of a short term of desegregation again. I dont think it will be sustained. Sm marty, how do you see this . Well, i think the u. S. Economy is in good shape now, i think it is fragile. I think if you look at employment and not First Quarter growth which is going to be l low it will be the same range for a while. I think the tax changes will help and i think it will gi ve s stronger growth. As you said remarks earlier, we missed measure Economic Growth in this country. We miss measure it because the official ways in which government status estimates what happens to quality change product, just under estimate substantially and they do nothing about new product. When we are told that gdp over the last few decades have grown less than 2 , i think thats just getting it wrong. I think there is fragility because we have had a decade of super low Interest Rates and that has led to an over pricing of all kinds of assets as investors and lenders have reached for yield. I think thats the thing to worry about over the near term. Ft lead article today was on that very issue noting from the potential of Interest Rate changes for what it means for u. S. Data floated in the cycle. It is not just corporate debt, it is economic prices and commercial real estate. The banks are at risk because they are taking on a lot of not such good credits in order to give yield. Thats because of whats the alternative . 1 or half a percent . They have been stretching for yield and the danger is, i am not predicts it is sure to happen but i think it is a serious risk. So maybe the fed is a better outcome than a quick change in rates. Well, they could not they should have started two years ago. They cannot now say well, thats a mistake, lets get to where we would have been had we started two years ago. I think well stick to the three increases this year so that janet yellen can say at the end o f the year, i predicted it and we did. Thats different then and had been true for the last several years. I think it is a mistake to try to push up rates request i cqui. Jared, how do you see growth in your perspective and what worries you the most . Well, i do think the First Quarter will come in low but thats pretty much anticipated now and there seems to be a bit of a bias down in First Quarter data of the bea is still working on. So i tend to lock at the year over year number and i think i am pretty much where megan is on that point. I think the thing that i can relative to what you heard so far, one piece of perhaps value Item Information y, i hope. I do think Consumer Spending is going to take a bit of a hit. I am not sure that data watchers quite absorb this point yet. There is an interesting thing going on in wage dynamics right now. Average wages are growing of 2 phenomena and inflation was really low. That was real growth. As inflation picked up and wages picked up, you still had real growth on average. One of the things i look at is blue collar wages and the pay of workers while the average has accelerated. It gets a little bit to your comment of the end of your talk how the benefit of growths have not reached everyone. It turns out. If you look in real term, blue collar pay is 1. 5 from march 15th while essentially the pay of blue Collar Worker stagnated around 2. 5 below that, inflation caught up to that. If you run that through a model, thats a very you end up going from 3 to 2 . I was interested to see the gold man sack Research Team macro out and found the same thing. Thats one piece of information i would put out there. I will reflect quickly on a couple of things. I think when it comes to measurement and i know maury knows this but repleflection ou for the group. You cannot argue that we miss measure. We have been miss measuring forever. If you are talking about growth rank, you have to argue of the extent of the mix measure is getting worse. I find it to be a much heavier lift and much lesser convincing argument. I wish i can join marty when more where growth is really is. And given megans policy ideas, or predictions, i think that one of them and this is not megans mistake. We were talking about it earlier. One of the mistakes that markets have made, it is an interesting way that wall street and washington dont quite get each other is the failing to recognize the, you can say difficulty if you want to be polite. The difficulty that the Trump Administration has in legislation, they can pass executive orders but it is a mistake to over estimate and i think the markets mean well too far over their scheme on this. It is a mistake to hear these folks talking about legislative changes and think they come to pass any time soon. I am going to come to those. You raise an issue about wages and employment, i will come back to them. 46 of employers said last year they faced difficulties in filling opened positions. 46 of Small Businesses received fewer applications for positions they tried to fill. Hiring they could not pass the math and drug test. They could not find candidates who require skills, persist tent of skills and every single district yesterday and every single one said they could not find sufficient number of workers, but those with skills. How big of a problem is this . It is going to lead to more rapidly increasing wages. It is going to lead to lending more rapidly increasing prices. I mean it is amazing that we have not seen a greater acceleration and inflation with an Unemployment Rate of 4. 5 . So i think we are going to start to see more of that. In fact, if you look at cpi for 12 months, you compare it to cpi for the previous 12 months, inflation is up. So it is beginning to happen and i think it will happen at an accelerating rates. Wages without productivity means that margins are going to get squeezed. Yes. But wages with pricing increas increase means that margins dont have to increase. Do you see corporate having Pricing Power and are you optimistic of wages and of con assumption . I am not optimistic of wages or inflation. The feds is the only central bank thats tightening now and u. S. Dollars is probably going to get stronger. In terms of wages, as you mentioned and i think that it is going to be a while even though the labor market tighten significantly and if you are looking at where we are adding our jobs, of low hour sectors. Thats largely Services Rather than goods producing secoing se. Also, 50 years ago, twothirds of what we consume are goods are not twothirds of what we consume are services. Well continue to add jobs slightly above or minimum wage. While thats the case, it is going to be hard to get upper pressure on wages and not to mention if you put the u. S. In a global setting, there is a glut of cheap labor out there. It is not going anywhere. Thats a great part. We have been doing a lot of work looking at retail sector. There is a website we discovered called deadmalls. Com. There is photographers photographing malls that gone disrepaired. This administration talks about manufacturing jobs. We want to move up the skills set and higher wages. Are you worried of entry level jobs that seem to be not as void as we thought it would be. Sorry. Go ahead. Well get here and go back. I dont believe you are going to see renaissance or coal jobs or manufacturing jobs, just because our president says he wants it to happen, thats not a a not wanting to forward of that trend. I think there is more we can do to help our manufacturers at the margin. Part of that, the Trump Administration have this half right pushing back on those who manages currency which china have not been doing to five or ten years. We can add employment. I think it will be fairly marginal of high productivity and at least in parts of the Manufacturing Sector of it productivity is high. So i dont think there is, you know, if you look at here is a good example. If you look at germany which has a trade surplus which i think is a distortion imbalance, if you look at the share of total employment, it is going from 40 to about 30 years ago to 20 in germa germany. Now they have twice as many manufactures and workers as we do. I do think we can boost that share. You took a swipe at tha that raise the pay. I say that in part because thats a pollicy that democrats will be introducing and i dont think it will go very far of at the national level. To the extent we are adding retail jobs when states and localities boosting their minimum wages, that helps them pay more. There is an interesting riddle that we have been talking about. I mean unless we are sort of willing to completely abandoned economic fundamentals and as marty says, it should be putting margins on wages and 80 workers who are blue collar factory workers. 80 of the work force we see that there are nominal wages, they accelerated a little bit but they have been flat for the past year of 2. 5. That acceleration is not occurring. Employers will always tell you we cannot find the workers we need. Thats something you hear all time. I have never not heard that. I think there are something to it. I very much support ideas to do more training but you do wonder at a time like this, why you are not seeing more wage pressure and internal training as well. Marty, manufacturing jobs and renaissance is coming back. Jared, key number that he he thinks mentioned, Industrial Workers and people touching the products and 10 of the labor force. You had a big jump that went up to 110 which would be a big jump reversing the down trend, it is nothing. So the idea that we are going to have a renaissance and manufacturing production jobs. We had people working in manufacturing but they are in desig designs, sales and management, theyre not blue Collar Workers producing the product. Thats the result of the kind of technical change that we had. I dont see a dramatic change in that. Let me go back to the issue that you raised earlier and jared commented on. This question of measuring productivity growth, measuring real income growth. There is a puzzle that those measures of productivity growth have declined in recent years, i dont know why. The researchers have looked at that also throw up their hands and say, you cannot explain it by this or that. I think if you look over decades, that has been a pers t persistent problem. If you properly dealt with new products, it can be two or three percentage point higher than that. We are sending out a message to the public thats discouraging them and telling them theyre not doing well and their children is not doing well and thats all based on bad numbers. Make it fast. I will let you go. Sorry. I was going to say, some people argued that we have seen this before, we used to be in a vard society. Yet, the economy is still booming ahead. This time is different there, i would say as an economist because people are going for manufacturing but a lot of that is being automated. I think this is the Biggest Issue that we face. It is the bus coming down the road thatll hit us and we are staring at it but dont know what to do about it. I mentioned we have an over supply labor globally. Automation is going to exacerbate that. The solution could be that we all work less which sounds great until you consider that we all have to accept a lower standard of living as a result as well. We still dont know how to response to this. This conversation to my view got really interesting. I thought it was already interesting. Maybe not so much, no, just kidding. There is so much to deal with here. Let me start with megan and go to something that martin said that i sure have trouble wrapping my head around. Theoretically, if automation is boosting productivity growth and more out put, you dont have to have lower Living Standard and well be richer at working few hours and we can be more li like i was thinking of the europeans but they take their productivity growth in vacation and we take it in consumption. You are right, you have to have some mechanism for distribution which is politically a heavy lift. But, i dont see it happening. It is hard to connect the idea that there is a lot more automation and productivity is decelerating and it is not just here but it is all in the g 7 countries. It is not reason why i dont think it is a measurement issue. We should get into that. Tim will instruct us and how deeply we want to go on that. I am very confused on something that you argue. I dont think that you are wrong. You seem to think that people are locking at the report on gdp and i dont mean people like in this room but people who actually are out there in the rest of the world, real people. And say oh gosh, gdp, that really stinks. I dont think anybody looks at that stuff. I have a hard time organizing a thought that says the be bea misreporting and thats bumming people out and theyre looking at these prints and getting unhappy. For that matter, they can look at the job number ans and getti happy. It is hard to square the idea that we are doing as much as we are and people will tell you that they dont feel. If you look at the poll data, people are asked, how are you doing now and your household and family relatively to five years ago. The answer is okay, we are doing better. Not everybody but overwhelmingly so. You ask the same people, how is the u. S. Economy doing and the answer is terribly. They dont know that from looking at the bea data. They hear it everyday and they hear it everyday that u. S. Economy is not growing and certainly during the election, they heard it from both sides. President trump as a coampaigne kept on saying how terrible things were and we were not growing and we needed to change. The democrats saw the same kind of message coming out. It is not that they just make that up, they have hard statistics to back it up. They can look at the economic reports of the government and based on those numbers, we are not growing. I dont know how much you want to begin, let me give you two sentence version of why i say that. When the burreau of labor statistic charged of making these estimates and had your products changed for the last year. Then they say how much more does it cost to make this years model than it would have cost to make last years model. If the answer from the manufacture manufacturers, no, it does not cost anymore. We thought of the way of making the product. The official bls is to say no increase in equality. Thats nuts. Throw out all technical change. So if thats the way we get it, bls even gives a fancy name. It is called a resource cost adjustment of quality. It is all about the cost of making it. Thats the basis on how we are judging how fast the economy is going. The key is where is the right answer for all that . Unemployment is incredibly robust. I mention that it is not part of the labor force. Those are some of the voters out there of industrial america, right . I think the Labor Force Participation rate for adult males used to be 90 and now it is sort of 85 . So it is fallen but it is not a change employment participation. I dont know exactly why that has happened. I dont know whether of families or division of labor means that a matter of taking off for some time and household speedomete responsibilities. Again, i think the key thing in terms of employment, we see a tight market and it shows in the survey that you were quoting and of a low i employment rate. You and i know, you dont get 16 things done. I am going to start with megan. Whats the most important thing this president gets done supporting Economic Growth and capitalization and maybe helps. I think probably deregulation actually. Second would be tax reform, income tax reform. Unfortunately, i am not particularly first of all, you mentioned there fewer than 55 legislative days left this year and we have ahm Midterm Election next year. So that does not leave much left for domestic policy. I think there are great plans and not much time to do it. If we see anything, it maybe 2019. Deregulation in particular the head of the we are unlikely to see anything like that. We may start to see some big changes, dodd frank, for example, we may see some other changes that are eregulatory rather than legislative. Thatll be on the margins. Whats the most important thing that the president can do to achieve this economic adjustment . Tax reform. I will put the Corporate Tax reform at least as important as the personal tax reform. I think they go together. And you like it best . Well, i think the border adjustment tax is placing a Critical Role it is not a trade policy, it is a revenue policy. It is roughly of 100 billion a year and help to pay for the corporate income. If you dont shave that, you go a real problem. Do you scale back the corporate rate cut so that it is affordable. Do you go with larger deficit hoping that stronger growth will pay for itself or do you tax on some part of the Spending Program or you do some combination. I dont think we know what the administration is going to do. There is a lot of heavy lobbying against the border adjustment tax that may succeed in killing it then the administration is going to have to say what other combination of things on the tax side and the spending side can be done so that we dont get a large increase in the fiscal deficit. Whats your advise to President Trump . You know i am kind of this may surprise you, i think it is some what of a trick question of what trump can do to help the economy because i dont think that president s can do nearly as much they tend to walk around thinking they can in this town. A lot of what we are talking about here when it comes to deregulation and tax reform and scare quotes. When someone is talking about deregulation, i am not sure what they are talking about. I thought the way you went to dodd frank made a lot of sense to me. Thats on a grandular issue. And so i think a proper conversation there is a nuance one and if that added anything more than a basis point, i would be amazed. Tax reform is tax cuts and i agree with martin, anyone who looks at our fiscal accounts in democracy have to recognize that the goal of true tax reform is revenue. We are just kidding ourselves if we think we are going to be able to generate more growth and trickle down the nonsense thats going to work and i am ready for when trumps budget actually comes out. I think the best Thing Team Trump can do for the economy is not screw it up because we have as we describe of Unemployment Rate thats closing. I actually take the pockets of despair more seriously than in mar martins description. But, you know the idea of very high tariffs or protection measure breaking globalization. Thats not doing the damage is the best contribution that i can think of. I assume it is 4 growth or Economic Growth. Thats correct, 4 growth. Thats the wrong goal as well. By way of antidote, i spent a lot of time talking to the German Government in particular. When i give them all my great ideas on how they can achieve better growth. They just stare at me and say who needs growth. Growth is an obsession. Maybe instead of growth, we need to be talking about inclusive growth and measures trying to deal with in equality issues that we get. The High Frequency that we get for in equality shows us that how much wages are growing but who is benefiting the most from them and it is a supervising from growth and not the workers. Issues dealing with that. We can put the graph up. Cheney says Ronald Reagan made it clear that deficits does not matter. I think over the short term, yes. We run into deficit and the debt burden. Largely because we have stand in a privileged position of that. And we also have a global reserve currency. And that wont always be the case. At the end of the eight years of the primary deficit was back to where it was when president reagan came in. A lot matters about whats projected to happen over the next 8 eight or ten years. If it is projected to continue to be and not projected by the cbo or anybody else or what the market thinks. If the market thinks we are going to be seeing rising debt levels then i think there is a real risk that long rates go up. If long rates go up given the fragility that i talked about earlier, we can be in serious trouble. Not only bond prices are falling, theyll be fulling down on prices of other kinds of assets and equities and commercial real estates. I want to go to the lower number but i want to do other things. Deficit matters. I am not at all, despite my earlier comment, i am not hawkish on budget deficit. Maybe 25 of gdp of 4 . I have those numbers exactly right. Thats the ballpoint and went up on obama significantly as well and large part due to what was done to offset the great recession. Meanwhile the argument that deficits, debt, orde deltas hava crowding impact on Interest Rates that we kind of worry about in this town for decades is taking a huge hit and those correlations have all but disappeared. I dont worry of very much about deficits in the near term or even the high levels of depth that you describe in terms of their impact on Interest Rates or growth. What i worry about is why we are generating those deficits and what we are doing to get there. If you are telling me we are going to generate large deficits and doing tax cuts for wealthy people doing nothing in my view exacerbate of high levels of pretax in equality, i think thats foolish. Again, tim, you mentioned in your talks, i am all for it. We should never forget of the fundamental equation of r minus g. As long as you are going faster than your debt service, thats sustainable. A i believe in arcade that it is. What i worry about when it comes to deficit is that we are wasting the deficit instead of using it for productive purposes. We mentioned the training deficit and workers who need more help . People of the area that you talked about have been left behind and i mentioned of demographics. The private sectors seem to be doing a terrific job of funding. During the Campaign Said theyre going to do a trillion dollar of infrastructure of 10 years. It was done by private investors. It is hard to see how you get revenue screen for most o f the Infrastructure Improvements that people think about. So i dont think well get on it. I dont think it is a significant thing in terms of the productivity or the growth of the economy. Megan, your thoughts on infrastructure . I agree with problem of the private sector and projects are not profitable. It is hard to scale. We got infrastructure, i want to encourage the audience, you can use your app to send me questions and i will pick the good ones. Please send them in. I am going to turn to trade. Someone sent a question into me, why are you so hostile to populi populism. Maybe i will take that as a way to transition into trade. This talks a lot about protectionism, where is it and a bit of a badge dishonor. Martin, let me go back to the Reagan Administration which you are apart of it. The Reagan Administration making it positively benign. Are we using the right method to drive this . To the extent of the administration focuses on bilateral trade imbalance. We should be thinking about to the extent that it is a problem at all. We should be thinking about global trade imbalance. After a lot of scary talks during the campaign, they really shifted direction now to saying how can we open up other markets. It is not how we can close our market to china or how we can close our market to canada. It is how can we get more of an opening in those markets. If thats what we end up doing, thats a plus. That was not me who sent in that question. I had the same reaction. As i told you, i thought your remarks are excellent. I do feel it is a mistake and i am not saying you did this, tim, i do feel it is a mistake sort of putting populism in a box and say there is a bad threatening thing happening there. It is an out come of a very messy but i think important and revealing democratic process. I think we have to pay ateptentn to it. Just completely endorse. I think the idea of the idea of obsessing over bilateral deficit is not only, typically a mistake, if you do that, you can end up worsening your own trade deficits and having to do with capitol blows that i have written about on my blog. Thats not a controversial statement but it is consistent of economic and trade theory recognize that there will be people wholl get hurt. You can find neighborhoods like this in cities including this one. I would hope that we would not be dismissive of learning from pop plos impulse. Why dont we accentuate what we do well and why are we fascinated by manufacturing . Beats me. It is a matter of who benefits from Service Exports and who get whacked by the manufacturing trade deficits. There are a lot of good jobs in healthcare. Month after month. People can move up. With an aging population that well see more and more growth of the healthcare sector. Yes, we should be talking about that rather than singling out the coal industry and Steel Industry where there is and will be decline and in large part of technology maybe a agreement of a little too much here. I agree with that. Again, i did strike the left behind community that you mentioned before. Among economists, there is kind of i wonder where megan and martin are out on this. There are places with jobs and places without jobs. So we have to think about, i think we have to think about bringing jobs to people, not just bringing people to jobs. Bringing jobs to people and there i think a role for direct job creation. There is a commentary there of increasing demand and and services. People in kentucky and moving to southern ohio or cincinnati area where there were jobs or no jobs in radford, kentucky. Sometimes it is not very sticky. You mentioned, one of the questions of the audience, what about carbon tax, you have your thoughts on carbon tax . Yes, i join with George Shultz in prooppoposing of carb dividend. Lets have a carbon tax and lets take that money and dividend back in the public. Why not just use it to reduce the budget deficit, you cannot get it passed. But, if you want to deal with the Environmental Issues and want the u. S. To be in conformity of what we talked about in paris and you dont want all of them and the details and regulations that have been put in place, substitute for a carbon tax but give that money back to people and the Treasury Department under the obama administration, treasury staff people estimated that if you did that, Something Like 70 of households would come out ahead. If you gave it back on a per capita basis to adults and have as much of children and 70 of households would have more money to spend than they gave up in terms of higher costs for the carbon tax. The probability of that happening in washington . Well, 70 benefiting a nice way of getting rid of regulation. I was amazed. I wrote a piece in New York Times on that and i was amazed at response that i got across the political spectrum of people saying what a great idea. So, thats not exactly a example of the population but i thought it was encouraging. Megan, one of the other questions here is eliminates interest of corporates leveling the plainfield of financing. Do you have thoughts on that and how do you think that impacts the market . I do think that helps and dividends and you may see some investmen investments. I think thats just the markets further. Can i go back to your point of labor mobility. You mentioned that sometimes, missing your family or things like that. There is a lot of Research Done showing that if you want better economic prospects, you should move your children before they are 12 ideally or at least before they are 15 then the boost to their Economic Conditions is the greatest. There is something about the youthful experience rather than just moving people to places with better jobs fundamentally shifts people opportunities. We becoming less mobile of this cycle, precrisis and 20 of the population moved across the political boundary every single year for a whole host of reason, mostly for economic opportunity. This cycle we have seen the leastme least amount of economic mobility since we started collecting data. Thats the result of house and prices of people stuck in houses. What about tax preparations . We tax income around the world and gets stranded in a lot of places and corporations have hundreds of billions and what about bringing it back and giving the low tax rate, how do you see that . These are these tax holidays, i wrote about this yesterday because folks were starting to talk about it again. Yes, there has been talk about earmarking some of those dollars that flow back for in centra tru infrastructure. I think thats a possible trade that you can see occurring. The problem is how you do it. We look carefully, megan, a couple of times mentioned share by backs. We look at tax holidays like this, they lose serious money over the ten year budget window. Thats not just me talking. Thats the joint Committee Taxation that scored this. You can bring back your deferred earnings at a tax rate thats typically well below 10 , scores as losing, i dont remember the number of north of 100th billion over 10. You cannot pay something with something that loses money. Thats basic arithmetics. The typical tax holiday wont work as an infrastructure funder. If you have a tax kind o of thats deemed and part o f a broader transition to a more rational foreign system of taxation, that could work. Certainly, the idea that somehow the previous ones lost money, assumed that those funds would have come back and paid taxes otherwise. So thats a pure assumption. It is not reality. The assumption is this is another assumption that you may not like. The assumption that jcp makes, if you tell firms that you have a tax holiday and you can bring it back for 5 that your incentive firms continue to defir thats what drives the revenue laws. Coming up, well make sure this is the number one question. We are out of time. Thank you very much. There is been a lot of conversations. I can do this all day long. Ladies and gentlemen, please give them a round of applause. Thank you. [ applause ] so, many thanks to the Previous Panel for their views. Now for the first of our conversations. We are delighted to have larry lindsey, president and ceo of the lindsey group, with us this morning to give his perspectives on the current state of Monetary Policy and the fiscal outlook. The prospects for raising Economic Growth and productivity. And the potential impact of the new administrations policies on the rural working class. Tim adams is back to pose the questions. Please join me in welcoming larry and tim. [ applause ] thank you. Thank you. You stuck with me for 30 more minutes, i promise youll get someone else on stage. Ill lose my voice by then. Were fortunate to have a dear friend of mine and something of a mentor, i guess, dr. Larry lindsey. Larry, i worked for you back in the white house, bush 41, forerunner of the nec. You went to the Federal Reserve and Federal Reserve governor for several years. You were also head of the nec. You heard the discussion, obviously you and marty go back for a long, long time. Well talk a little bit about economic policy. But i want to get your perspective as head of the nec about policymaking in the white house, you wrote a book about what every president should know. What advice would you give publicly, how would you do it differently, if you would do it differently . Maybe just give the audience of what does policymaking in the west wing look like . One piece of advice, its kind of ironic, we went from an administration having no one with any business experience at all to one in which all anyone has is business experience. When it comes to experience, im a great believer in diversity. And we went from one nondiverse situation to another. I think theyre on a learning curve about how washington actually works. I think that the president has learned one lesson, important lesson, from the health care bill. You know, he said i cant make people vote. No, mr. President , im sorry, its your job to make people vote. And you have electronic cattle prods and you have rubber hoses, you know, to use them. Not literally, be they can be more effective, cutting off campaign funds, for example, stuff like that. He wasnt prepared for that. I think they are now. The president raised 42 million for his pac in the First Quarter. After the bill was defeated, we saw some tweets calling for primary opponents to emerge against some of the Freedom Caucus people. Yeah, hes learning how to use the rubber hose. So i do think theyre moving up the learning curve. At this point in 2001, the tax bill, you spent several years putting together, reagan in 81 in this point in the cycle, both president reagan and president bush signed their legislation by august at the very latest, usually by june, july. In 81 and 2001, there was a bill. Where do you see this process . President bush ran on a tax proposal. You have a mandate to actually hold on. Do you want to adjust this . Better . Go ahead. Okay. The president had a tax bill but it kind of vacillated. He had a vague idea of what he wanted to do, there were no details. Thats one reason hes kind of behind the curve on that. The other thing i would point out is, its not necessary for the president to lead on everything. I dont think he gets that. I can talk louder, if there we go. Im usually a loudmouth. Lets give obamacare as an example. We call it obamacare. But obama never proposed anything. The house passed a house bill. The Senate Passed its own bill. And that bill, by the way, was hadnt really moved through any kind of discussion. He got the four Committee Chairmen who were supervising the bill in the senate, this is harry reid, in his office the day before christmas break. They essentially stapled together the four separate bills and rammed it through the house as people were flying home for christmas and everybody said, well, all right, yeah, its not a perfect bill, but well move it forward, well go to conference. Thats usually what happens. And the president usually parachutes in, in conference, and sort of acts as a broker between the two sides. And he can also insert his own ideas. Theres no reason that a conference has to produce anything in between the house and the senate. You could produce whatever you want. So that is the usual strategy. Now, obama had a little bit of a problem, they lost ted kennedys seat. They couldnt ram it through the senate. In the end the house had to accept the senate bill, the thing that was stapled together the day before christmas, which is why there are so many problems with it. The usual process is for each house to pass something and go to conference. And i wish its helpful that the president be a cheerleader. President obama certainly was. You know, he strong armed the senators to vote for it, in the end got the prolife democrats, made a deal with them to get it through the house. Thats the role for the president to get it through conference to exert his power. I wish they would follow his example. Why not pass the bradyryan bill, you like the border adjustability, why not pass the bill, get the senate to move as well, create momentum to at least get something on the table by summer . The usually saying is, from your lips to gods ears. I would say from your lips to the members of congress, Something Like that, a little bit different from to gods ears. I think they should. Let me say why i like the bill. Marty feldstein was my thesis adviser. This was a little while ago. But it even back then, in the 70s, of the last century, the basic structure of what we were taught as the way america should have a tax system, is the house bill. And what you have is a bunch of geeks or nerds or whatever you want to call them in charge of the house. This is very unusual. Usually theyre good at fundraising, back slapping. Ball ryan, devin nunes, mccarthy, are all very, very smart people. And so they know about this and they try to advance it. Now, maybe theyre too smart. They didnt push things. But lets get that through one house, is my idea. The senate is going to pass something different. And then at least you can negotiate out a structure. Why is it so good . If i may guess your next question. To start there, we have to think about why has our economy been so mediocre. Usually recoveries after deep recessions are very quick, come back quickly. If you take 2011 through 2016, it was by far the weakest recovery weve ever had. President obama was the first president since weve been keeping records to never have a year of growth of 3 or better. And if you break it down and you look at why that was the case, growth in the labor force, growth in the number of employed was there because we brought Unemployed People back. But Capital Formation, the rate of Capital Formation fell by 40 . And the rate of total productivity growth fell by twothirds. Twothirds. It was unprecedented. This is from the long term historic average. So if you want to get back to rapid growth, youve got to encourage Capital Formation. Youve got to encourage productivity. Well, you know, the best way to encourage Capital Formation is to make america the best place in the world in which to invest. And the house bill will definitely do that. And as for productivity, i think this came up a little bit in your last session. Productivity doesnt descend like manna from heaven. Productivity comes because of churn in an economy. It wasnt mentioned that under obama we had the smallest rate of people moving across the political boundary to take a job. Well, that means theres a lot less labor turnover. You can see that in all the statistics. And one source of productivity is, not that im more productive sitting where im sitting, but i move to a job better suited to my skills, and im more productive in that job. To have that happen, you have to have businesses be the demander. We had the smallest rate of new business creation under obama than any other administration in history. We actually had net deaths of business under obama. You know, and theres a lot of reasons for that. I go back to not having any business experience in the administration. But if you tell people, you know, he tren entrepreneurs, you didnt build your business, youre not exactly encouraging business creation. The house bill is targeted at entrepreneurship, very targeted at churn. And its very targeted at Capital Formation. And, you know, thats what was lacking. And my back of the envelope calculation, and tim will tell you im not known as a raving optimist, not a forever but a fouryear transition, we could average 3. 5 growth if we got that bill through. Were not going to, but we can come close. But they have to do something. They absolutely have to do something. One of the constraints is budget neutrality, i expect thats the constraint that will be relaxed. Were running a deficit this year, 500 billion. The cbo report, which i noted earlier, debt to gdp continues to rise through midcentury. Should we focus on getting rates down and deficits will take care of themselves . Theres a saying, grow your way out. And thats a little bit strong. I would say, though, without growth, youre doomed. So you need growth and something else. Theres not enough cuts to be had that are politically possible without accelerating growth. And if you actually do get 3. 5 drop, i have 3. 5 dropping off to 2. 8 after two years, if you actually get that, the bill, i hate this phrase, but i use it because everybody understands it, pays for itself starting in year six, and the overall cost will be breaking even by year ten. So, you know, the trick to any kind of borrowing is, do you generate a rate of return that justifies the carrying cost. And the answer is, yes, in this case. Now, thats not true for most government spending. But it is certainly true for this tax bill. Over the long haul, we will generate a high enough return in terms of higher revenues that over ten years it will be neutral. So i think its a good investment. The b. A. D. , has become emotive in a pejorative term. The swamp is winning, lets be honest. Lets set aside, its not possible to pass the border adjustment, whats the second best approach . What are other possible tax plans that have yet to emerge, simply because we have to wait until the v. A. T. Meets its demise . Well, as a prediction, i think when they actually start doing numbers, theyre going to have a piece of border adjustment in there. And i think its the most misunderstood tax. And thats probably its proponents fault. The broad consensus in the economics profession is that its offset by currency adjustment. You simply think about supply and demand of currency, when you put that kind of tax on, and its pretty straightforward. And so i think its a very sensible kind of approach. Second thing, politically what are the alternatives . I do not think, because of the currency adjustment, that youre really going to dramatically change imports and exports. But thats not widely accepted. So if you dont, if you dont pass a v. A. T. , then youre going to pass something else. Reciprocal tariffs, or god knows what. I mean, even if you dont like the v. A. T. , i happen to like it, it is way at the top of the list of anything thats politically required here. So i think, again, vocation are bei folks are getting rather foolish to get behind it. Im not knneutral on the issue, usually try to be neutral on the issues. Ive been deployed by the leadership to talk to retailers. Retailers say, the Retail Industry will go bankrupt across the board. Ive met a lot of the leadership in the Retail Industry. What do they do . They ask their tax person, run without making any changes or assumptions, this years bill this years tax return through the new tax bill. So we dont have any change in currency. We dont assume we have any market power. Do we think market has no walmart power . But thats the assumption. The other people they turn to are k street, their washington people. What will any washington person tell the ceo . Its a disaster, its a disaster, i need more money to fight it. Okay. So here you have the two least creative, least impartial people feeding the information to the ceo. I mean, is that really how Corporate America runs . Its been quite a scary experience for me to actually delve into it. But, you know, again, theres a lot of misinformation. I think thats probably largely the fault of the organizers of the bill. But i really hope we get something. I think were going to get a partial in. So what do we end up with at the end of the day . When is a bill going to be on the president s desk . So you always you know, theres a joke about the people on the Desert Island and the Economist Says they have a can of tuna fish and the Economist Says, assume a can opener. So im going to assume something. I actually see some signs of this. What im assuming is they finally wake up to the politics of this. They all took a hit by not passing the health bill. They cant afford another failure. And frankly, when you have an economy thats had an anemic recovery, but youre at full employment, youre going to have the recession. I sometimes call it the hillary recession. If you dont do anything different than what hillary would have done, youre going to have a recession. So probably before the 2018 elections. And i think that thought will sink in. And when it does, you will see a lot more movement. Thats the can opener im assuming. I really think they have to get it done before labor day. But i know thats considered ambitious, but what you need to do is in the white house, you need to get guys who have never been in politics before off their rear ends and start thinking like politiciapolitici. On the extreme right of the republican party, you have to convince people that theyre not in opposition anymore, they have to govern. And i think you will get, as the senate modifies it, i think you will get a toneddown but still effective version of the house bill. What do you do about aca repeal and replace, obamacare . Do you put it aside . Why the obsession, why do it now . Its a political promise. The exchanges are imploding. It is a fact. Its going to go away by itself and were not going to have anything to replace it. I forget the share of counties. Its over half that are now down to one or zero employers excuse me, providers. So you either have a monopoly or nobody. And thats only going to grow. So you have to do something. Look. Whats the fundamental problem with obamacare . It was a wellintentioned idea, but that we basically mandate everyone have essentially the same kind of insurance options. You have to cover lots of things you dont have to cover. I think the original effort took care of that. But the other part is called community rating. Basically what the bill did was cross subsidization. It raised rates on the young and the healthy to cover the old and the unhealthy. The greatest difference you were allowed between your healthiest policy and your most unhealthy policy was three to one. If the actuarial costs are ten to one or 15 to one, it means the young and the healthy arent getting a good deal. And they quickly figured that out. And their premiums were the ones that skyrocketed. And theyre the ones who complained. So i think in the end, and this actually is what the Freedom Caucus is asking for, i happen to agree with them on this one, i think you have to ditch community rating. You may want to modify it, you may want it move it from three to one to six to one or Something Like that or just get rid of it, and you will solve the problem of obamacare. But thats the only path forward that i can see. I would call it deregulation. Let me move to Monetary Policy, so well shift gears. You were a Federal Reserve governor for many years. What are your thoughts on where we are in the tightening or normalization cycle, first question. And two, there are a number of vacant positions at the fed, there will be more vacant positions over the next 18 months. As the president begins to think about the qualities of who should be in those jobs, what kind of advice would you give him, what kind of person should they be thinking about putting in those positions . Im trying to think of the order i should take those questions. Let me do the first one first. Were sitting here with a 4. 5 trillion Balance Sheet, with a negative hundred basis point at least real federal funds rate. This is where no man has gone before. And were doing it at full employment. So i dont know how you can look at those numbers and not say were behind the curve. Now, there may be good reason why were behind the curve. But the fed had the view, this is not qe1, qe1 you had to stabilize the Financial System. But with qe2, the fed announced its policy. It was going to build a Balance Sheet to force the rest of the economy rest of the Investment Community into more risky assets, which would cause those assets to go up in price. So far theyve batted a thousand, which would then cause the economy to grow faster because of the wealth effect. On that one, i think there is some evidence it happened. But now were in year eight, and the wealth effect is in there, and the asset prices are high, and were still at 2 growth, and the incremental value of that is pretty low. And also, you know, this is third grade economics. Think about it. Does anyone believe that simply printing money accelerates Economic Growth . I mean, again, i can a you will great economics. Yes, it does move low Interest Rates, it moves future production forward. In 09, we moved but you never, never are going to get out of and that means the bills are always going to come due. Youll have to unwind somehow. So what scares me is youre sitting here at full employment with 4. 5 trillion Balance Sheet, which we have no experience with. And you have the possibility of growth accelerating. Now, it may not happen. They may not pass a tax bill. We may stay on economic lockdown. But if they pass go, yousometh youve got real problems. Everyone says gradual, gradual, gradual. I wish the world would work that way. History does not suggest that gradual works when youre at full employment and you have growth acceleration. Do you think well get upside surprise . I think thats i would take the other side of that bet. Ill put it that way. I cant say words buy or sell. Right. Okay. So thats the backdrop. Now, the president i think has a threshold decision. And the folks in the west wing who advise him are divided on this. Option one is, gosh, lets not take any chances, lets in effect appoint yellen or someone like yellen, go real, real, real slow. Low Interest Rates are good, a weak dollar is good, there we go. Thats option one. Now, option two, which has also a lot of supporters, takes a small little look at economic history. If you actually get growth accelerating, you would think it would be a slam dunk for a president. Again, this is someone from the president s perspective. But what kills a president is acceleration of inflation. If we go into the 2020 elections with 5 or 6 inflation, which is not inconceivable if growth gets going, hes going to lose. So if you look forward and you say, you know, you dont go to where the hockey puck is now, you go to where the hockey puck is going to go when you get there, i. E. 2020, you want someone very different from the first model. You want someone who is, shall we say, more orthodox in their thinking. And once the president makes up his mind on that threshold choice, you know, theres people on both sides of that. And well see. Marty, this morning in the fte had its cover piece today about repricing of assets. If youre correct, and we see a rapid rise in rates, the huge repricing the assets, potentially vulnerabilities in the Financial System and the economy, what youve just described that is, and marty himself said the economy is very fragile. Do you worry about the fragility, do you worry about the Downside Risk then, given your scenario . If youve run an economy for eight years on fiscal and monetary stimulus, and remember, the cyclically adjusted average deficit under obama was 6 of gdp, cyclically adjusted average deficit was 6 of gdp, and you quintupled the size of the Balance Sheet of the monetary authority, look, you were propping this economy up, maybe appropriately, im not going to debate whether it was appropriate, but you have been propping up. We should face it. We are not here because of any fundamental strength in the economy. Were here because we used monetary and fiscal policy to their max. You cant do that forever. But how do we stop . If the politics wont allow us to stop that process. I dont know how many writers in history have observed that. But this is how economies end or republics end, right . You can pick any one in history. All currencies end badly. Their societies end with them. And all you can really do is postpone that unhappy day. So we have been doing nothing to postpone that unhappy day. Nothing at all. Weve been accelerating it. And thats why i think if you have any kind of long view, you would pick someone orthodox. But, you know, i have no idea what politics is going to do. Again, nothing lasts forever, including currencies and including republics. And do you worry about the chatter about the dollar . I think the chatter about the dollar is the same chatter as the chatter about low Interest Rates. I think theyre going on simultaneously. Short run, its a good idea. Long run, its not a good idea. I mean, i think you shouldnt have a strong or a weak dollar. Were going to have a marketdetermined dollar. But cheerleading about the strength of the dollar i dont think is productive. Why would you undermine your own currency . I dont get it. This fed seems to be more sensitive to external events than previous feds. Maybe its a just the nature of where we are in the global economy, the nature of the personalities that compose the fed board. Do you think we have the external conditions, that part of their reaction function, is that right . Are we too concerned about china or europe, or not concerned enough . Let me go to a slightly different external condition. And i think this is what the change was. William Chesney Martin said the role of the fed is to take away the punch bowl before the party really gets going. I would call that orthodox. Then starting probably in the 90s, the role of the fed seemed to be to prop up the markets. Fed chairman got called maestro for doing it. You didnt want to disappoint the market. We developed all kinds of communications strategy, to tell the market when we increased a quarter basis point at a time in this decade. Dont worry, you know exactly what the pace is. And now were not even moving that fast. Well, why . What is the actual effect of that . If you tell the markets youre never going to surprise them, then theyre going to push further out the risk curve, because youve just taken away the risk. One of the great lessons of psychology is that uncertainty breeds caution. And youve taken away all the caution in the markets that comes from uncertainty. William mcChesney Martin would be horrified. You really dont want to tell the markets what youre going to do. You want to keep them guessing a little bit. You want to have them be, oh, my gosh, yeah, if i reach my hand out a little bit too far and push the envelope, i could get my wrists slapped or my fingers broken. Thats very, very useful. I think starting with an external event, i think, you know, this concern about propping up the markets i think is a mistake. As to the rest of the world, i think that the congress is horrified, quietly, that the fed is running Monetary Policy based on something other than the 12 Federal Reserve districts. And you can argue whether theres merit in that. And that goes back to the globalist versus America First kind of argument. But when you sacrifice the quality of Monetary Policy of this country for someone elses, youre not doing what the public expects the Federal Reserve to do. And so yes, i think theyre putting too much emphasis in it. If youre going to do it, by all means, keep it real, real quiet. And, you know, you want to im glad everyone is sitting down for this. Here in washington, we sometimes do one thing and say were doing another. You know, that might be very, very good advice on that particular subject. We shouldnt tell anyone that. Absolutely not, no, no. We believe in a strong dollar. You know, that sort of stuff. We have the treasury secretary here later today, well ask him that question. Hes been backpedaling from the president s remarks, that will be interesting. Theres discussions about leadership of the fed, i hope the advice you give the president is good, sound advice. I appreciate you coming here today. Ladies and gentlemen, a round of applause for larry lindsey. [ applause ] so next up, tax reform. Thats an easy one, right . Congress hasnt adopted comprehensive tax reform for over 30 years. Our next panel will explore the likelihood of tax reform. The merits and politics of