Just two days after the Senate shut down President Barack Obama’s latest jobs bill, the debate extended to Yale’s campus Thursday night.
University President Richard Levin and five other economics professors debated job creation policies, the Occupy Wall Street Movement and long-term economic strategies in front of an audience of over 100 students and faculty gathered in Levinson Auditorium. While the professors differed on what the focus of a recovery plan should be, they agreed that a large, sustained fiscal stimulus is necessary.
Levin said reinvigorating the U.S. economy is a pressing issue and warrants serious consideration.
“The fact that we are now seeing public protests about the condition of the economy I think compels us as a university and a teaching institution to talk about these issues,” Levin said.
Much of the discussion centered around the recent $447 billion jobs bill, which failed to earn enough votes to pass in the Senate on Tuesday. All of the economics professors on the panel said they supported the ideas behind the bill.
“Obama is right here, but I think his proposal is too modest,” said William Nordhaus ’63, an economics professor who sat on the panel. “I would say we need the jobs bill times three.”
In order to finance a more expensive stimulus, Nordhaus advocated for a carbon tax and for allowing the Bush tax cuts to expire on schedule at the end of 2012.
Economics professor Robert Shiller, who also served on the panel, said he liked that Obama’s bill, which included a extended cut in payroll taxes intended to create jobs, would increase funding for infrastructure and raise taxes on the wealthy, but he said these proposed taxes ultimately doomed the bill.
But Aleh Tsyvinski, another economics professor who spoke at the event, questioned whether investment in infrastructure would contribute towards growth because of the risks of investing in technology that might soon become obsolete.
“Who knows what will be there in 10 years?” he said. “I don’t think that infrastructure is a silver bullet.”
Economics professor John Geanakoplos ’75, who also took part in the discussion, focused on the need for a long-term economic recovery plan. He said he sees a grim political landscape if action is not taken to mend the U.S. economy.
Many panelists referred to Occupy Wall Street, an ongoing movement in which middle class Americans have protested against the wealthiest “1 percent” of the population, as evidence of public discontent with the state of the U.S. economy.
“We were promised that if we bailed out Wall Street, Wall Street would bail out Main Street,” Geanakoplos said. “I think the riots we’re seeing now are a prelude to bigger riots.”
But several of the professors said the protestors need a more practical plan for reform. Nordhaus said the protestors have their “heart in the right place,” but they need to form a plan more focused than their current list of grievances, which Nordhaus called a “manifesto against the corporate world.”
Judith Chevalier ’89, a professor of finance and economics at the School of Management who also spoke, acknowledged that income inequality is a problem, but she said cutting CEO’s paychecks would not necessarily raise employee salaries or create jobs.
“We need job creation plans that are separate from plans to curb abuses present among the [top] 1 percent,” she said.
Four audience members interviewed all said the talk was informative and timely. Samson Mesele LAW ’15 said he appreciated that the professors focused not only on what they thought were the best economic policies but also on what is realistic in the current political climate.
Erin Johnson ’08, who works in the Secretary’s Office, said she was most struck by Levin’s claim that the issue at stake is how to put ideas into action.
“The economy is stalled, and so is our response to it,” she said. “Occupy Wall Street might be most productive in the sense that it brings a little more immediacy to the conversation.”
The US unemployment rate was 9.1 percent in September.