The upheavals in the American economy over the past decade (and beyond) have challenged workers, business owners, and government officials. Even economists have struggled to reach consensus about the causes, much less the cures, of the difficulties facing American families. These debates continue unabated.
To help navigate these disputes, we recently interviewed two of the nation's most admired economic analysts. Each is mostly identified with one political party but is widely respected in the other. Glenn Hubbard is dean of the Columbia Business School, a former chairman of President George W. Bush's Council of Economic Advisers, and a top economic adviser to Mitt Romney in 2012. Alan S. Blinder, a professor of economics and public affairs at Princeton University, served during the Clinton presidency as a member of the Council of Economic Advisers and then as vice chairman of the Federal Reserve Board. Blinder is author of the recently published book After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead. Hubbard is coauthor of Balance: The Economics of Great Powers From Ancient Rome to Modern America, due out in June.
We spoke with each man separately, asking identical questions to produce this virtual conversation. Their responses (which have been edited for space) show substantial convergence on the problems facing average Americans but continuing divergence on how best to respond.
NJ The median income of middle-class families doubled from 1947 to 1973. But today, in real terms, it's only 5 percent higher than it was in 1973 — and lower than it was in 2000. What's the principal reason the median income has been growing so much more slowly than it did in the first decades after World War II?