tv Discussion on Rebuilding Global Economy Americas Role CSPAN October 26, 2020 11:05pm-12:08am EDT
congress and occupy the white house next year. stay with c-span. watch campaign 2020 coverage every day, on c-span. a or on-demand at c-span.org. or listen on the c-span radio app. your place for an unfiltered view of politics. ♪ next, a discussion on the role of america in rebuilding the global economy after the covid-19 pandemic. the peterson jason furman, a former chair of the council of economic advisers under president obama. adam: hello, everyone. welcome back to the peterson institute for international economics. i am the president, adam pozen. it is my pleasure to be with four great colleagues. jason furman, karen dynan, douglas irwin, and nicholas lardy. we are here today as as part of the "rebuilding the global economy" project,
initiative by the peterson institute. just in time for not just in time for a new u.s. administration, or a new term of an old administration, depending on what happens. but in time for the stock taking going on in the world, on how to open the world economy, when the u.s. has behaved as it has for the last four years, but also importantly, when we are all facing the vulnerabilities that came out of the pandemic. before introducing my colleagues who will be speaking about memos to the white house, national economic council, the c.e.a. (council of economic advisors), the office of manufacturing and trade policy about industrial policy and the u.s.-china , strategic dialogue, let me say a couple of words about the rebuilding project. we are very excited about this. it is open to everyone, in the sense that we wish to engage. in all of our -- and all of our
publications and events are online. the world has been moving backwards since roughly 2008, both in terms of economic outcomes for humans, international integration. and in terms of they come from different causes to some degree but they reinforce each other. we went through decades in which they went hand in hand. greater international integration what with greater peace and prosperity for the bulk of the world's population. thatas not gone well since the global financial crisis and the pandemic has intensified those actions. so the real risk that we all face, climate change, technological slowdown, gender and race based oppression digital disinformation and the , loss of privacy and the recurrence of pandemics, are all rising in a world in which these are global threats. they are faced by all humans. they are economic threats because our economic policy choices and our economic incentives and activities affect us,
-- affect how badly they hit us. and so we need a global approach to get back, to get back to a world where we can confront these pandemics and that does not mean going back to the globalization fantasies of the late 1990s. we've chosen the world, we're rebuilding is the apt verb. we need to assess what's going on in the world economy. what parts of it are salvageable. what parts of it are essential. and what parts of it can be restored. this is meant to be a practical exercise. so my colleagues and i, including all the fellows in the are writing memos to key policy decision makers, what they should be doing first-off. what we'll also here today. over the coming months through the end of the year we'll be rolling these out in tranches. last week we rolled out the
memos to the secretary of commerce in the u.s. and to the u.s. trade representative as well as associated senior officials featuring evan greenburg as a leading business person and a jones senior fellow. in two weeks we'll be having larry summers and pete blair henry speak about what the u.s. treasury should do. international organizations, foreign governments, particularly european organizations, and what they should be doing to rebuild the global economy. starting in january, we'll put out a comprehensive plan developing some of the proposals we've made from our fellows' priorities, and seeing how they and we'll continue the track of how the global economy is coming together. again i'm very grateful to all my colleagues at the peterson institute. our on-board members, who are participating, our board members who support us and to our stakeholders who want us to come up with practical ideas. our role at the peterson institute is to push out the envelope. be within the tent in the sense that we'll realistic and we're
talking to whoever is in office in an official role about what you can do better, but to be ambitious, not to be constrained by short term politics to actually push for what can be done realistically that is better and we're not wedded to the old ways. we're simply wedded to an empirical reality. a final note on the u.s. administration and europe and international organizations is not to say that people of other continents, of africa, of latin america, of asia, are not, of eastern europe, are not stakeholders at the table. quite the opposite. it's that we do not feel we should be presuming to speak for them as a bunch of people who were brought up in america and europe and served in american and european governments and international organizations. so we hope to engage through the first quarter of 2021, with representatives, fellow scholars, fellow former
officials, from around the world, to get the nonamerican, noneuropean perspectives and how we might work together and we lack forward to that engagement. -- howie look forward to that engagement. first and foremost the u.s. has to get its house in order to rebuild the global economy. constructive economic solutions do exist to the international existential threats we face but they must be targeted and they must be based in practical rebuilding. they must be global. so please join us in this effort. first, let me turn to my colleague jason furman, nonresident senior fellow at peterson. jason has been one of the extraordinary economic policymakers of the last 20 years serving in a variety of senior roles in both the clinton and obama administrations, and in particular as chairman of the council of economic advisors in president obama's second term. jason, we've asked you to
address with the national economic council should do particularly in the area of international economics. jason: thank you so much, adam, for organizing this excellent rebuilding series, and including me. i served as deputy director of the national economic council during the last financial crisis. i walked in the door of the white house on january 21, 2009, into the second floor of the west wing, where the leadership of the national economic council is housed. at the time, the unemployment rate was 7.8%. the financial system was in crisis. and we were terrified about the future of the u.s. economy. whoever walks into that office in january of 2021, will actually face a very similar unemployment rate. in the sevens.
will face an economy with over 10 million people out of work. millions of businesses having failed or facing enormous strain, and problems in the financial system as well. but in three important respects, the national economic council director will be in a different position than we were in, in january 2009. the first respect is that in 2009, our worst days were ahead of us. the stock market was still falling. the unemployment rate was still rising. there was a day-to-day crisis as to whether some of our largest financial institutions would even survive and if they went down what other collateral damage they would have for american workers and the global economy. now the unemployment rate at least to date has been falling. it may have a bump up with the second wave, but as the vaccine
gets rolled out next year, it is very likely that unemployment rate will continue to fall. the stock market and financial system are much more stable. it's an enormous amount of suffering in the economy and an enormous amount that needs to be done but the ratio of the house on fire, to put the flames out, to there is a longer term structural problem, is a bit different than it was in 2009 with more room to focus on the long term structural problems and also more need. ratio of the house put the flames out, to there is a longer term a bit ral problem is different than it was in 2009 more room to focus on the long term structural problems and also more need. the second difference is that the united states has more in 2021 than it had in 2009. that may seem paradoxical.
much all, the debt is larger as a share of the economy 2009.han it was in that interest is, rates are much lower than they were in 2009. interest on the debt is lower today than it's much of u.s. history. post war u.s. history and the eal inflation rate is actually negative. that means the united states can borrow money and repay it with valuable 's even less in the future. some of that is a byproduct of but much of self, that was true even before the crisis. january and february of this year. that gives effectively an unlimited amount of room to respond to the short term problems with fiscal measures, as is needed, and it doesn't give unlimited license
policies.r term i still think they should be paid for so that the debt isn't and beyond what would happen in the baseline. any pressure off considerations about active deficit reduction. he third important difference from 2009 is in 2009, the united unleashed the crisis on the world. we had caused it. it around the world, and at least for the first year or two, the united was the most severely impacted in the world. the u.s. economy was reeling. this time around, the united not cause the immediate crisis. moreover, in part because of the large initial fiscal response, one that tragically has not been followed through on to lapse, but d the initial was so large, the
quick, y response was so effective and decisive, that the economy has actually many other s than economies around the world especially in europe. the united states in a better position to help lead a rebuilding of the global economy hat rebuilding of the global economy is absolutely necessary, immune to the re virus that causes covid-19, but ravaged the rest of the world the way that it has had all would have likely recession in the united states, shock that e global is causing. >> it was terrifying that we might have a way of emerging debt crises. oday that looks a little bit
less likely, but i don't think we're out of the woods on it, will be inted states a better position economically to show leadership. a side note china's economy even better than the united states because it's done better job of getting its virus under control but you taking steps,hina like bilateral debt forgiveness, g-20 and the like. really the united states is the only country that can do that. it hasn't done it to date. immediate priority for the national economic council for house, for the entire
the nment, is going to be economic recovery. karen will be talking about that any won't talk about it in detail except to say a very that whatever is done should not just last for one year. it's uld last as long as needed. one of the lessons i take from the financial crisis was it's need your at you response to be large. you need a response to be long. cares act, for example, was very large but it only lasted about four months. need to make sure the next approach lasts as long as needed that linkthe triggers it to the unemployment rate, as ong as it's elevated, assistance, would be delivered. structural parts of the rebuilding will include elements, all of which have an important international as well. the first that i highlight is
investment in children. really important in its own right bit also is absolutely the sary to give america security and confidence to global ate in greater integration and a greater u.s. world. the this is obviously almost entirely a domestic agenda but 2014, the g-20 put on the agenda the issue of women's participation in the work force got all the g-20 countries in that goal to improve dimension the g-20 could similarly help the united states lock in its progress in this area. reforming the tax code is going to be essential and one of the most broken parts of it is that tax code was essentially designed globally to avoid taxed.es being double paying tax on the same income in two jurisdictions. to do this.esigned as a result, in many cases companies are paying no taxes in
any jurisdiction. you've seen a set of ad hoc responses in a number of taxes es, digital discussed in europe. the guilty provision in the states. he oecd is the clear venue for accelerating cooperation on the profit shifting. coming to the table by saying we did some international reforms in 2017. want to improve on them and work to make it more of a global concept, would put us in a very good position. limate change, we all know, is an international issue. it's also a critical economic issue. goal there is to take steps ike border adjustment and the like, that could protect economy that is choose to deal more with incentives ge, give to economy that don't do as much and to imate change,
make sure that's done in a so ally agreed upon manner, it doesn't lead to unraveling of rules.bal trade i'll just list one more policy a very hink has important international dimension, and that i've worked and a lot on personally that's competition policy and digital competition. united states has the right central goal for competition policy, which is a welfare.consumer the problem is the united states hasn't lived up to that goal. efforts around the world to redefine how to do competition, to include a regulatory on approach with leadership from united her places the kingdom, australia, germany, and france. the united states very much to catch up with all of
them. globally ave a negotiated way to do competition policy. we've never had that but we can have a globally convergent way to o competition policy and have that happen. it can't just be left to the competition authorities. that the finance ministers and economic leaders and the national economic involved in to be negotiating. i'll conclude, i think you have enormous opportunity. there is a sense of crisis that to be ng really needs done, but there is enough time and space to do something not run but about rt our bigger structural problems. united d needs the states. the united states can't succeed without the world, and these are tangible steps that can be taken in that rebuilding process. so much, jason, for someone like you, to so a case tely put forward for constructive optimism and
series of purposes, great inspiration. please allow me to turn to karen, who is writing an chair of the council of economic advisors. karen is also a professor of the practice of economics at harvard university. nonresident senior fellow at the peterson institute. she served as the assistant of the treasury for economics, basically the chief economy it and forecaster of the treasury in the second term of the obama administration. prior to that she was vice economic studies at brookings and had a long distinguished career at the reserve as one of the leading researchers on savings and fiscalr behavior issues. karen, overview, please. thanks, adam. be a , am delighted to part of this. important.s policy priorities for the president's council of economic
strengthen t would the u.s. economy as part of ostering rebuilding and recovery, so in my remarks today want to emphasize three points. the first priority is that we need to deploy additional fiscal stimulus to support the u.s. recovery from the pandemic over the longer un strengthen automatic fiscal stabilizers. so, by way of background, the early phases of the u.s. sharp rebound a in aggregate demand. so we saw that in employment, in consumer spending. in business investment. other indicators. but, that was the good news. the bad news is that the partial has been only to date. or example, non -- payrolls in september were 11 million above their april trough, which is respects, but me nonetheless we're only halfway
back. create or ed to re-create 11 million more jobs where we were in february. and the pace of recovery has so the september change in nonfarm payrolls was 600,000. as you can probably calculate in at that rate of increase it will take a very long time to create the millions nd millions of jobs we need to get back to full employment. that we can even count on this slower pace of improvement continuing. aggressive countercycle fiscal policy supported the early recovery, and as we know, most of those measures off or they have expired. so at a minimum, to avoid the stalling, i recommend that we pass more funding for states, additional aid for small businesses, we also need to reinstate some supplement to
nemployment benefits, and extend the period of expanded eligibility. that's short term fiscal policy, looking at what needs to be done longer run, we should recognize that fiscal stimulus uring periods of economic weakness, not just this downturn downturns in st this country and other countries, has been too small, and too -lived, susceptible to short term political wrangling. failure to pass more stimulus in the last three onths demonstrates this point miserably. and the fact that monetary policy is likely to be by zero lower bound issues for the foreseeable future means that countercyclical fiscal policy is going to have to play a much recessions fighting going forward. the point being, that we need to automatic stabilizers so that countercyclical fiscal
relia is not so -- or generous and liking stimulus to economic conditions. for instance, you could have supplemental food stamps. enhanced unemployment insurance. higher federal medicaid spending and lower payroll tax rates, all turn on when the unemployment rate is a certain threshold and then turn off again when it comes back down. so that's the first priority i have for you. a second and related priority is strengthening u.s. social programs. the consequences of the pandemic for employment, income, and the well-being of american families, has highlighted preexisting weaknesses in u.s. economic and social systems. coronavirus cases, job losses, and business failures have all occurred disproportionately among people with less income and education, and among members of disadvantaged racial minority groups. es in u.s. economic and social systems. vinolas cases, job losses, and
usiness failures have all occurred disproportionately among people with less income among members and of disadvantaged racial minority groups. pandemic has rds, really underscored the need to strengthen the safety net in mitigate -- it would reduce the likelihood the balance sheets would be scarred in a way that dampens the pace of recovery and lengthens the time it takes for employment to get back to its full employment level. that will be true in this recession. it's going to be true in recessions going forward. f recovery and lengthens the time it takes for employment to get back to its full employment level. true -- that will be true in this recession. t's going to be true in recessions going forward. i also want to emphasize the longer term benefits of more on social programs. o there is a growing body of evidence that shows that many of these programs represent crucial
in people's future lives. studies have documented, for xample, that poor children exposed to medicare, food housing, and high quality preschool experience security as adults. decades later, than they otherwise would. told the evidence makes a powerful case for providing more support for programs that poor children and their parents. not just because they relief hardship in the moment, but their longer term benefits. and we should keep in mind that the benefits would accrue to those directly affected. these investments would create a ore productive work force, which means higher potential output, and higher tax revenues, lower future spending, on safety net programs and fewer funds directed towards crime incarceration. creating more economic mobility likely strengthen our social fabric which would be
another benefit for everyone, just those directly affected. hile we're on the topic of investment in people i should also note that we need to do high o broaden access to quality, higher education, lthough college pays off well as an investment for most people, even when funded by to ent loans, we do need reform the student loan program so that there are fewer cases investment turns out to be a poor one. e should also greatly expand pell grants to students from low-income families to reduce the need for student loans in place.st and we should provide more financial support for community colleges, along with broadly reforming the community college a tem in order to create stronger set of alternatives to high cost low value for profit colleges. the third priority i want to infrastructure investment. even when the pandemic-recession
is behind us we'll very likely be facing the longer term productivity ow growth. the investments in people i just it's sed will help but also important that we invest in things, including public structures. so infrastructure investment in representsstates now a smaller percentage of gdp than past half rs of the century. the quality of infrastructure investment is declining relative that of other countries. in addition to reducing u.s. income, inadequate public capital stock, investment foreign and trade in the united states. of course, it matters how we do infrastructure investment. to focus additional spending on projects with high returns. avoid bridges to nowhere. that, we need to recognize that it's important to
repair of nance and existing capital rather than flashy new ely on projects. lso, who builds u.s. infrastructure is less important than getting what is needed value from theng dollars that the united states spends. hus we should allow for competitive bidding for construction, installation and of nonsecurity sensitive infrastructure. we should insist that foreign allow the same farms.unity for u.s. those are me three priorities. in closing i want to pick up on how jason was saying about to think about the budget. a prioritycluding as reducing federal budget deficits elative to those projected under current law. i agree with jason, that given low interest ally rates, the accumulation of federal debt is not one of the
biggest economic challenges right now. trying to pay for fiscal real-time would, of course, be counterproductive. i think we all agree on that but beyond that, i think it is sufficient that any discretionary or ongoing federal spending related o these priorities being accompanied by an increase in federal revenues. o thank you for letting me discuss what i think our priorities should be and, i look questions. your >> thank you, karen. and it's great to have the solid of investments, not just in children but in human capital up with infrastructure capital. people pay lip-service but we advantage of the opportunity. one of the hallmarks of the trump administration in its and perhaps only term is pursued an o industrial policy trade strategy
reating a new office of manufacturing and trade in the white house. we asked douglas irwin to discuss the issues raised by industrial policy and such an approach. doug, is -- sorry, i don't have name, chair, right with me, but as a distinguished professor college and has served on the cea as a senior taff economist, he's a nonresident senior fellow, eterson is the author of definitive history of american policy, a in very thick paperback edition as well as and a hostunder fire of other extremely important books about history and reality economic policy. doug, over to you, please. adam.ank you very much, it's a pleasure to be here. as i mentioned in 2017 president trump established a new outfit in the white house, the office of trade and manufacturing advise the president on policy measures to strengthen
u.s.-based manufacturing. this is going to be a very important issue moving forward administration, but it might come as a surprise that even though i think the issues re important i also propose abolishing the office in my memo. and that's for a couple of reasons. that it duplicates many of the functions they are agencies inin other the executive branch. it duplicates what the commerce does, defense department, u.s. tr in terms of trade and manufacturing. it's not clear what its precise mission is. because it's so recently established, it has no established expertise in the area. it doesn't have large staff.nced it has no formal policy role or uthority, and no institutional standing that's been recognized by congress. could perform a coordinating role in terms of coordinating trade and across uring policy various agencies.
but the national economic performs that role. one person could be deputized to but it'se coordination not clear that we need this office. -- regardless of whether what the next administration decides to do with this office, of the exact form it takes, there is no doubt that administration will have to deal with issues of bipartisan concern about the the state of u.s. manufacturing. there has been concerns about of global bility supply chains. the security of to these concerns. one is the pandemic, which gives us a public health rationale for ensuring that we have a strong domestic base, for health reasons, and, of course, national security in china. and so, once again, there are many agencies that are involved in formulating administration policy, and the national security area involves the national security council, defense department,
homeland security, in terms of public health, and there is the nih, the f.d.a., health and human services, many agencies have a say and a stake in these policy debates. so in terms of moving forward, i think what's necessary is the administration has to seriously study using this interagency process, what is needed moving forward, in terms of domestic manufacturing capability, the importance of supply chains, i think we need to have a clarity to the public and to the business community as well has agencies as to what our objectives are, and how to best achieve these objectives. requirenot necessarily capabilities, it could be for certain products we stockpile.
for example strategic or just to those related to national security or public health emergency. idea deserves serious study. policy.s up industrial that affect the manufacturing sector and the question is a very important first study. what it should and what it should not be doing. that is why we need a comprehensive study of these issues. [inaudible] we are losing some of your
sound so could you repeat what you just said, please? >> matters are very important for study. need support from the government, or what particular policy should be. but the principal policy. [inaudible] the first. can you hear me, adam? adam: now i can, doug but please , go ahead. we're going to have to move. thank you. doug: okay. i want to offer three broad principles to guide policy moving forward. -- can you hear me, adam? now we can, doug, but please go ahead. we're going to have to move. you. >> okay. i want to offer three broad principles to guide policy forward. the first is self-sufficiency should not be the goal.
the goal. there are tremendous gains from trade. vulnerabilityless to supply chains than has been sometimes reported in the press here i would recommend a wonderful episode of trade peterson's series posted by anibal gonzalez. from the she had simon university of geneva talking about a recent paper of his which is very important which the exaggeration of things of nce and that sort. tradeal should be to keep open, the second point would be to avoid bad industrial policy, namely protectionism. , protectionism does not distinguish between reliable and unreliable sources of supply. it does not distinguish between friendly and unfriendly allies from which we get imported goods. when we move to a protectionist solution we tend to alienate those allies and that leads to retaliation against many of the
exports which are manufactured undermining our ability to help out the very sector of manufacturing that we're trying to support. in addition, what protectionism does is raise domestic prices. that hurts downstream industries. a classic example of this is the steel industry. where here the trump administration has tried to help out a very basic large manufacturing sector, the steel industry. but by imposing tariffs we've raised prices which hurt downstream steel-using industries. ford motor company reported that its costs rose by over a billion dollars last year, resulting in a higher price of steel that it has to pay. what this does, by harming the downstream industries, raising and undermining their competitive position vis-à-vis the other domestic and foreign suppliers, is that it hurts jobs. [indiscernible] in the on mobile sector. the cost of losing jobs.
and still. theectionism in manufacturing sector overall. [inaudible] adam: doug, we just lost you again. it's a real shame. i encourage everyone to read doug's memo. his last points about the insufficiency, in fact, self-defeating nature of trying to derive industrial and any factoring performance through protection and trying to derive resilience through self-sufficiency are just not on. the evidence doesn't support it and we've seen that right now in the pandemic and we have seen that in developments of u.s. manufacturing. again, my apologies to doug. we were unfortunately losing too much of your sound in this last bit. we will put out more by doug in a little while. i'm now going to have to turn to have to in the sense of turning
away from doug, which i am regret but i'm excited to turn to nicholas. -- nicholas lardy. he's the senior fellow at the peterson institute where he's been with us for nearly 20 years after a distinguished career in academia and across the street at workings. as the anthony m solomon fellow, he is the leader of china studies and arguably the leading american-based economic analyst of china in the world. i mean, in the u.s., remarkably, outside china. two recent books of his are hard hitting intellectually sound and important books. his book from a few years ago, markets over mao, which documents how he contrasts some of the fantasy theories being put up at the moment that it was the private sector in china that led to china's growth
and more recently, the state strikes back. a book which got rave reviews in prominent venues and in foreign affairs because it was a no holds barred look, who has been willing to say good things about china, how the state has come back under president xi. reform has gone backward. in recent years the economy has gone backward. importantly, that this does have costs. now, it's a critical part of the white house mission to staff and appoint the chair of the china-u.s. strategic dialogue, whatever it will be renamed. and this dialogue being constructed is critical to the global economy and all of our wellbeing. so we have asked nick to give us his advice to the chair of the u.s.-china economic dialogue. nick, over to you. nick: thank you, adam. i think the first thing to recognize is that any policy directed towards dealing with the challenge that china represents has to be part of a
comprehensive program of u.s. economic renewal that focuses on rebuilding our crumbling infrastructure, rebuilding our support for research and development, which has lagged, federal support in particular, and thirdly, a smarter immigration policy that brings in scientists and technicians that is can improve the productivity of the u.s. economy. what we've seen in the last few years is a policy that seems designed not to enhance the u.s. economy, but tried to slow the rise of china. my view is that slowing china's economic rise is not a viable economic policy in the medium and long run. i'll come back to that. to enhance the u.s. economy, but tried to china.he rise of my view is that slowing china's a viable ise is not economic policy in the medium and long run. to that. back the second major suggestion i
a more that we need robust interactingcy process to internal e kind of bureaucratic squalling that's led in recent years to a very policy to address china's economic rise. policy should s include a rigorous estimate of the cost to the united states of weaponizing trade policy. by weaponizing trade policy, i example, tariffs, export controls, and secondary sanctions. currently, these policies are being weaponized with little or regard to the cost to u.s. onsumers, to u.s. businesses, or to the long term competitive position of the united states. major that's a second change in the approach we would have to have on china. back to why i think china's rise is likely to -- in e, i think we have process of negotiation with
china needs to recognize that relatively low level of per capital output, substantial potential for further economic convergence, and that means that china is likely to continue to more rapidly than the united states, and thus economy will na's surpass that of the united tates at least in terms of overall size, and i think the orollary of that of course, is china's global economic role and its influence will continue to just to enhance and further what jason said, we certainly see that right now the covid pandemic globally. china was the first to get the under control. it has had a very strong recovery. while the united states and many other countries around the world struggling with multiple waves of infection, deaths.izations, and as a result, china will be the
only significant economy this to register positive economic growth, and by 2021, likely to be y is about 10% larger than it was in 2019, and that's a situation shared by any e other, or many other advanced economies or any other economies around the globe. some may come close but i believe we'll see china is economy with a 10% expansion over a two-year period. on a is also outperforming the trade front, imf forecast, that global trade will be down year, while in september, china's exports and rosets measured in dollars by 10 and 13% respectively. so china is doing well in terms growth.economic it's doing very well in terms of its participation in global trade. the final point i would make is of i think a policy economic decoupling from china
is so decoupling is likely to look like a unilateral u.s. decoupling from china, result in u.s. self isolation from the most important source of global trade and economic growth. i think even a narrow decoupling in technology, for example, in semiconductors, is likely to lead to substantial reduction in revenues of american semiconductor firms, a decline in the research and development of these firms, and if this continues for any period of time, the united states could lose its longstanding global leadership position in an industry that's crucial for u.s. economic competitiveness and national security. i think those are the main points to be kept in mind as we resume a systematic economic dialogue with china. adam: thank you so much, nick. the substance of not being
unrealistic about what the u.s. can and cannot achieve with china, and what china's vulnerabilities and benefits are, is critical and it's not about just being nice or being suckered as some would put the rhetoric. and you very carefully, rightly stayed away from that kind of thing. china is large with its self-interest but interaction with it is critical. this is spirit in which i think all of our speakers today spoke. just an announcement, doug and i just exchanged on the chat, we'll re-record in full his remarks, ideally later today, and post them on the website. they are well worth everyone hearing. but now, let us open it up to questions. for those of you who can, please use the q&a function on the zoom chat. in the interest of time, i'll
gather the questions but we'll attribute them to the person posing them. so to start off, john west of the world trade center, orlando asks, for climate change, can we get more about how this plays into the rebuilding of the global economy initiative, and in particular, i think going to jason and karen's remarks, but also obviously, there is a china cooperation aspect to this as well. so first to jason, and then karen, then doug, on climate change, please. jason: yes. so i could spend my entire time on this incredibly important topic. the paris agreement was, in one sense, a very good framework. it's the best we've ever had, because it got almost every country in the world in. but it got almost every country in the world in because it led every country in the world to decide what it wanted to do. and decide how it was going to do it.
so it aimed for breadth over strength. the whole logic of paris is that it would be a ratchet, where countries could put pressure on each other, to do more and build on the commitments that they had made there. that process only works if countries like the united states are actively engaged, both internationally in the paris agreement and domestically putting something forward. i think that a lot of the ideas about spending money to deal with climate change play a role. more charging stations, more subsidies for wind and solar, and the like. but we're never going to get to 80% or a 100% net emissions reductions by 2050 without also a price on carbon to lead to more sweeping and widespread changes throughout the economy. individuals and businesses. the united states can do that policy all on its own.
but it would work a whole lot better if other countries are doing it so it isn't partly undone by leakage, as manufacturing shifts from the united states to other countries, hurting our economy and undoing some of what we want to do on climate change. that's the importance of the border adjustment that i talked about in my opening remarks. and creating a system where you don't just have mutual cheerleading to get other countries on-board. you also have a concrete incentive for other countries to get on-board. and some of that, maybe my trade colleagues here get nervous about it, i think should operate and needs to operate through the trading system. karen: i'll keep this short because basically i agree with everything jason said. yes. so absolutely, climate change has to be part of the agenda. are running theme in a memo that
i wrote was the need to invest in the future. the three types of investments i was thinking about, talking about were, children, and infrastructure. then in climate and technology, and i just had to choose two of the three, but that third one is just going to be very important for a whole bunch of reasons. adam: thank you. nick, anything to add on the china front? nicholas: well, china stepped debt set forward for the first time a very ambitious agenda to be carbon neutral in a few decades. -- china set forward for the first time a very ambitious agenda to be carbon neutral in a few decades. they haven't laid out how they are going to do it but i think it's very encouraging that they are embracing the goal, so clearly it's a country we could work with if we had a more enlightened policy on our end. adam: thank you. i'm now going to turn to doug irwin.
in making a dispute mechanism more effective so the u.s. can be more engaged in a positive role in the system. now, we talked about this a bit at the event last week but in your role as advising the white house on trade policy, how would you tackle the wto and especially the dispute settlement issue, doug? unmute, please. douglas: i want to make one comment. i apologize for the poor -- audio here in this house with solar panels. imported solar panels. is bad in terms of jobs. there are many more jobs in the solar installation industry than the solar panel production industry. and it is bad for climate change because it raises the court of purchasing those solar panels. on the wto i would for two chad but i think one of the problems
is that the united states has complained about the appellate body and the dispute settlement system without putting forward a positive agenda for change. once we identify exactly what the united states wants out of the dispute settlement system , then we can move forward. but unless there is a positive proposal for change, we're going to be in this deadlock. adam: thank you, doug. change. once we identify exactly what the united states wants out of settlement system then we can move forward but unless there is a positive proposal for change, we're going be in this deadlock. doug.ank you, before going on to on the peterson institute www.pie.com, all of the memos and videos are present. continuing to push on a rolling basis new ideas, new before going on to the next substantive question there, have been questions about where to
find the memos that these speakers are posting from. on the peterson institute website, www.piie.com, all of thememos and videos are present. we'll continuing to push on a rolling basis new ideas, new videos, new explainers and there is a way to subscribe to #piie rebuilding or rebuilding the global economy project, and get our newsletter and stay up to date so thank you for the interest. jason, you pointed at the need for international cooperation on taxes. karen markoe asks, could you elaborate a bit more about what specific changes could and should be considered by the u.s. as part of this international process, and how that would affect the large corporations who pay no taxes? jason: thanks for that question. let me just give an overarching principle for how to approach it and then i'll do the details. it would be nice if every country in the world could get into the room and agree on a new corporate tax system. i think that's hard to imagine. instead, what i think you can aim for, and this is similar to what i said on climate change, something that one country does, that puts pressure on other countries to do the same thing, and it's more of a race to the top. instead of what the tax system is right now, which is a race to the bottom. the united states has a tax
provision called guilty. global low tax intangible income. i got the order of that wrong, it was passed in 2017. and it's based on the idea that you have to pay at least a certain minimum tax rate on the income you earn overseas if it was earned in a low tax country, in a way that looks like it was not really linked to activity, for example. through intangables. the income you earn overseas if it earned in a low tax country, in a way that looks like it to economic activity, for example. through intangables. provision was written in the united states, it had two important flaws. that you would do it based on your worldwide income. to do it y important on your per country income because when you do it worldwide you can use investments in one offset, you know, another.
you can locate a lot of things andyou know, cayman islands then somehow get out of paying somethinghat by doing somewhere else in the world, if you are in the cayman if you did that it would reduce some of the incentives other countries have to lower their tax rates to attract activity because that wouldn't benefit american multinationals. other companies would have an incentive to adopt a similar policy, and it would essentially create a de facto floor on the global corporate tax rate. >> thank you, jason. karen, following up on your critical reminder about the importance of investing in human capital, given that education is almost entirely funded and designed by state and local governments in the united states, what can the u.s. federal government do to fund
greater investment in u.s. human capital? what specifically would you suggest? sure. so, a lot of education is done at the state and local level. but particularly when you're talking about higher education, there is also a very important federal component, so as i mentioned in my talk, we have this federal student loan program, which is working for many, many people but not working for everyone. there are reforms that we need to do. we should also just be thinking about more federal grants to low income students to support their college education through the pell grant program. as opposed to, you know, having to take loans in the first place. and then the third thing i would say is community colleges. so the federal government could push a lot more money towards community colleges, which i think it should do. these colleges, some of them have excellent track records but not all of them do.
i think the money should come with a set of reforms to make them more effective. in particular, incentives that would help them build structures to make sure students get matched to the right programs that they are making the best use of their skills, make sure that students finish those programs, and to help students find jobs once they are done with the program, so i think all of those things are things that could be done at the federal level. thank you, karen. there is a whole lot of questions, unfortunately we're not going to get to but we got two simultaneous questions from gregory and damien williams about the divergence of u.s. antitrust competition policy, and in particular, with regard to the digital sector. jason, you played a leading role in the uk setting of a new digital policy agenda. you spoke at the start of this event about how important the
antitrust policy is to you, and you think it's a credible concern. you also said we can't have one antitrust policy for the world, but can you say a bit more about how to achieve the kind of convergence in antitrust or digital policies that you were talking about? >> yeah. so right now, if you apply to merge as a multinational you have to clear competition authorities in all the countries you operate in. all of those countries, competition authorities, are using pretty similar rules, and so you know if you can clear the united states, you're going to be able to clear europe, australia, et cetera. that's something that i think we need on the procompetition regulatory side. essentially a set of code of conduct for what you can and can't do, that is relatively
clear, that only applies to the biggest platforms that have a gateway bottleneck power for the system, and that's similar to the responsibilities they have under antitrust but spelled out more clearly, rather than having the types of lawsuits that we've seen in europe and the united states. i think more intra-operability and data mobility is important for creating more competition as well, and those types of standards, rules, codes of conduct, you know, if you had a well worked out one in one country would you probably see the companies complying with it, and that effectively working for them on a worldwide basis. thank you, jason. incredibly concise on such a complex issue. we've come to the end of our time today. our second event in the rebuilding of the global economy series, with the peterson institute, as our social media editor, bob, posted on the chat, all the memos, all the briefings, all the videos and accompanying materials are available on a rolling basis, and then permanently on peterson
institute website. we encourage you to look there, to engage with us and as i said at the start over the coming months as we roll out more and more of this work, we look forward to getting to hear from other voices and other places, than the once we've emphasized but heading into the election , and either a second term or a new administration in the white house, it was critical for us to set out what should be the priorities and what will be the right things to do for the national economic council, for the council on economic advisers, for the industrial policy of the united states, and for the u.s. dialogue with china. all of these, as all my colleagues said, take place in a global economy which like china exists, withdrawing from it makes us worse off so the question is how do we best engage in a way that makes us all better off? it is attainable, and using some of the ideas that jason, karen,
doug and nick spoke about today will get as part of the way there. thank you for joining us today, i look forward to continuing the conversation and rebuilding the global economy. this meeting is adjourned. with eight days left until election day, our -- on november 3, when voters decide who will control congress and occupy the white house next year, stay with c-span rivet watch campaign 2020 coverage every day on c-span. stream or on-demand c-span.org, our visit on the c-span radio app. your place for an unfiltered view of politics. c-span's washington journal, everyday we are taking your calls live on the air, on the news of the day, and we will discuss policy issues that impact you. coming up tuesday morning, we
will look at this year's presidential campaign in the battleground state of wisconsin with craig hilbert, washington bureau chief for the milwaukee journal sentinel, and david cannon, political science professor at the university of wisconsin madison. watch washington journal live at 7:00 eastern, tuesday morning. be sure to join the discussion with the phone calls, facebook comments, text messages, and >>.ts in warmp lot on springs, georgia. that's 1:00 p.m. eastern on c-span. at 3:00 p.m., senator kamala harris campaigns in reno, nevada . later, at 3:30 p.m., vice president mike pence speaks to -- speaks in south carolina. at 2:00 p.m.,