Obama’s and Romney’s economic advisors tussle, but find some common ground

Left to right: Austan Goolsbee, Lanhee Chen, and Adam Lashinsky at Fortune Brainstorm Tech in Aspen, Colorado.
Left to right: Austan Goolsbee, Lanhee Chen, and Adam Lashinsky at Fortune Brainstorm Tech in Aspen, Colorado.
Stuart Isett/Fortune Brainstorm TECH

The U.S. Food and Drug Administration needs major change. Real tax reform is unlikely to happen. Yet another variation of Bush vs. Clinton is the most likely electoral scenario in 2016. These were the things upon which Lanhee Chen, a research fellow at the Hoover Institution and the former economic policy director for Mitt Romney, and Austan Goolsbee, a professor of economics at the University of Chicago Booth School of Business and former chairman of President Obama’s council of economic advisers, agreed.

And then there were the things that the two academics, interviewed by Adam Lashinsky at the Fortune Brainstorm Tech conference in Aspen, Colo., didn’t see eye to eye on.

To wit: “We absolutely should lower the corporate tax rate,” Chen said. “The basic premise of conservative economic policy is economic certainty and the idea that I just need to know what the conditions are going to be like in 10 years. Tax reform could create that.” Goolsbee had a rather different take. “You’ll hear people saying they’re waiting for the uncertainty to go away, and then they’ll invest. It’s not going to go away. We’re not going to get that system and we’ve never had that system.” Chen said tax reform would further spur innovation. Goolsbee retorted that it should have happened already. “We are coming through an environment in which taxes were the lowest they’ve ever been,” he said. “If cutting income taxes was the answer to growth, than why didn’t we grow faster than we’ve ever grown before?”

The two economists, freed of their political obligations, were voluble and unplugged, though they sometimes became tangled in the language of economists. When asked who he thought would be the Republican nominee for president in 2016, Goolsbee said Jeb Bush—then qualified it, somewhat hilariously, by saying, “He is my maximum likelihood estimate, but not higher than 10%.” Chen, who hasn’t yet worked in the White House, said that he was sure Hillary Clinton would be the Democratic nominee. As for the FDA? Chen called it a “brontosaurus, which no longer exists,” and “completely antiquated for the task at hand.” Goolsbee couldn’t quite muster up a major disagreement with that one.

Nor did they spar on the level of economic discourse in Washington today, which Chen called “the most useless set of policy discussions I think we have had in economic history.” But Goolsbee did offer a solution—perhaps one that only economists would find practical. “What makes me fundamentally optimistic is a situation in which everybody basically gets one-third of what they want,” Goolsbee said. Teaching people to be satisfied with that outcome is, however, a challenge than neither man was willing to take on. Last night, anyhow.

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