In this week's New York Times Magazine, Adam Davidson writes a dual profile of Larry Summers and Glenn Hubbard, two of the most influential economists in American Politics today. Summers is a Democrat; Hubbard is a Republican. The question that animates the piece: "How did two men, whose work is widely respected, reach such different conclusions from data about the same economy?" Here's an excerpt.
Even these two, with such similar training and moderate impulses, are remarkably far apart on basic questions. Hubbard argues that the imperative of the moment ... is rolling back federal benefits for wealthier and middle-class Americans. If it's done right, he says, taxes will fall and "more entrepreneurs will start businesses. Corporate investment would rise, creating more jobs. Individuals will work harder and save more. The country would have faster growth. The benefits are quite broad." If we stay the present course, though, Social Security, Medicare and Medicaid will keep growing unchecked, and the United States, paralyzed by debt, could burn like Rome.
Summers, who once told me "I don't do apocalypse," acknowledged that some entitlement reform is inevitable, but that it is not the real adjustment that needs to be made. "That is playing defense," he said. "It is essential but insufficient." Instead, Summers wants the country to start playing offense: the crisis that demands our attention now, he says, is long-term unemployment. Millions of Americans have been out of work for more than half a year, many for much longer; not only are they suffering, but the overall economy is poorer without their contribution. Summers argues that the U.S. government can address this problem in several ways, especially by committing to more government spending, notably on infrastructure.