Glenn Hubbard, American Economist

BLOOMBERG ADVANTAGE – How Washington Can Avert Financial Ruin After the Election

Kathleen Hays and Vonnie Quinn interview Glenn Hubbard on his "Process Before Policy: How Washington Can Avert Financial Ruin After the Election."
 
 

FORTUNE – Why the Internet Won’t Kill B-School Classrooms

While the online revolution in higher education will drive new ways of teaching, it won’t replace the best business schools. Instead, the way professors use class time will change, says Glenn Hubbard, Dean of Columbia Business School.
 
At 12:01 a.m. on August 1, 1981, MTV began its first broadcast by playing a video for the hit Buggles song, “Video Killed the Radio Star.” It was an opening salvo for a revolution in the music industry, which caused no small amount of anxiety for many who foresaw a future of music via television. Of course, MTV has since given way to YouTube, which will make musicians famous far quicker than a DJ will. But video has not killed radio—multiple surveys show that more than 90% of Americans still listen to radio every week. That is hardly the sign of a dead industry. A revolution may have happened, but it did not have the destructive effect a lot of people thought it would.
 
There is now similar anxiety about a revolution in higher education, as massive open online courses, or MOOCs, proliferate. Since the first such course appeared in 2008, people have asked whether we still need traditional classrooms. Why attend expensive colleges and universities—where costs have far outpaced inflation—when you can receive an education from world-class professors for the cost of an Internet connection? Popular free MOOC providers, like Khan Academy and EdX, have prompted many a headline of this variety.
 
To worry about the fate of universities, however, you have to overlook the unique advantages of the traditional classroom—advantages that have allowed residential education to withstand numerous innovations in the past, from correspondence courses to television academies. After all, it has long been the case that you could receive a free education from a world-class professor by borrowing his or her textbook from a library, but that free and easy access has not lessened the volume of university applications. Clearly, being physically in a classroom, interacting with a professor and other students, is an irreplaceable component of effective learning. Professors can better assess a student’s learning in person, and adapt their in-class strategies based on immediate, non-verbal feedback. They can also create a comfortable but challenging environment where students will make the leaps that lead to intellectual breakthroughs.
 
Too much and too little is being made of disruptive forces from technology shaping higher education.
 
Business schools can serve as a case study. Online courses can meet a demand for certification (i.e., do you know how to do a particular thing?), and even an online degree can be a potentially lower-cost alternative to classroom experience—if that classroom experience does not offer a rich exchange of knowledge, information, and perspectives with fellow students and faculty.
 
That competition is much less for the best business schools, in which so much of the academic benefit reflects physical connections among students, faculty, and the schools’ practitioner networks. In that sense, the disruption from online education for top schools is likely smaller than many commentators think.
 
But in an important respect, disruptive forces are larger than many academic leaders imagine. If the Internet is causing a revolution in higher education, and in business schools in particular, it’s in prompting a discussion about how we use classrooms, not whether we need classrooms. Until recently, classroom time could be used to provide a lecture meant to elucidate the readings students would have done beforehand. With the ability to upload that same lecture to the Internet for pre-class viewing, the question of how to use classroom time is forcing faculty members to engage in a deep examination of pedagogy. The trend is toward allowing the classroom to be a space for collaboration, but as faculties engage more with the learning sciences, I expect that a rich array of models for classroom learning will emerge. At Columbia, the guiding principle is to use online capabilities to complement in-class teaching with integrated case discussions, not replace it.
 
So the online revolution in higher education will be both bigger and smaller than people think: big as a driver of new teaching methodology; small as an existential crisis for the best business schools and universities. Just as people still listen to the radio in a YouTube age, there is much value in obtaining an MBA in the classrooms of the best schools, even as information becomes more accessible outside of the ivory tower than at any time in history. And after all of the hype and anxiety, we will see that the Internet did not kill the B-school classroom.
 
This op-ed appeared in Fortune.com, November 18, 2014
 
 
 

VOX – How to Fix Washington: a 5-Step Plan from a Former Bush Economic Adviser

The Republicans now have control of both houses of Congress. This speaks to Americans' dissatisfaction with how the Democrats have been running Washington. I was head of the Council of Economic Advisers under the last Republican president, George W. Bush, so I know that having a new party in charge isn't how you change the way the federal government works. To really reinvent government, we need to take lessons from the private economy. Think Apple, not Healthcare.gov. Think the Cleveland Clinic, not the VA.
 
Here's why the private-sector lessons are important:  it's less about government's lack of competence than government's lack of nimbleness. We have much to learn from the ways in which the nation's vibrant businesses and social sector organizations adapt and prosper.
 
Organizations become successful by responding nimbly to changes in economic conditions and individuals' preferences. Here are five ways the government can change to improve its nimbleness.
 
1) The president should fire agency heads more often
 
Improving accountability is the first step toward a more nimble and transparent federal government:  make agency leaders and decision-makers responsible for their actions.  Poor management decisions at agencies that should command the public's trust — recent scandals at the IRS, Secret Service, and VA come to mind — should be met with explanation and disciplinary action, not obfuscation.
 
No change in the law is needed here; responsibility for accountability must reside with the president: "the buck stops here." Firings should not be a dragged-out afterthought. Outside experts can advise the Executive Office of the President on difficult problems ranging from the culture of the Secret Service to managing Ebola, but trust will improve only when the president enforces accountability quickly.
 
2) Government programs should be competitive
 
The second and critical step is fostering competition among programs and alternative ideas to achieve legislative goals. Products, services, and even the organization of firms are shaped by the battle to win over consumers and investors.  Monopolies are slower to innovate, and true monopolies require regulatory fiat (think the Postal Service).
 
The government needs to introduce competition in the ways federal funds support individual beneficiaries. One example is Personal Reemployment Accounts, an idea I developed when I was chair of President Bush's Council of Economic Advisers. In this system, unemployed Americans would receive a transfer to use to purchase the job training of their choice. Such accounts allow the unemployed to choose the training that is best for them. Then, once the unemployed person finds a job, he or she would get a reemployment cash bonus. This would give the unemployed an incentive to find work quickly.
 
Another example is premium support proposals for Medicare, which would allow recipients to use federal subsidies to choose among alternative private health insurance plans.  Gains from competition can be achieved even in redistributive programs.  The amounts of subsidies in Personal Reemployment Accounts or Medicare can vary by income or other characteristics, but still give individuals access to the greater choice and quality made possible by competition.
 
3) Government programs and agencies should have to justify their own existence — or get eliminated
 
While accountability and competition are important features for advancing performance in any organization, the threat of exit, or elimination — either directly, or via replacement by a superior organization — is critical.  Unlike business firms threatened by competition, government programs and agencies can take on a life of their own. Such stasis has two consequences that worry the electorate.
 
The first and more obvious consequence is that policy reform proposals — for Social Security or Medicare, energy or financial regulation, and health care or housing subsidies, for example — face an uphill battle against entrenched rules.  Any reduction in the future growth of program benefits or subsidies is a "cut."  Any updating or correction of the rushed Dodd-Frank Act or Affordable Care Act faces opposition as "weakening regulation."
 
The second, less obvious consequence is that a kind of passive voice, or bureaucratic shrug, envelops government administration: existing policies make certain courses of action inevitable, regardless of how well they fit contemporary policy needs. Examples include failure to address regulatory confusion in the mandates in the Affordable Care Act, or clarifications of rules to apply to so-called systemically important nonbank financial institutions.
 
Two reforms come to mind: changing the time period over which spending and regulatory rules remain in force without review; and forcing regular congressional debate over spending and rules. While these changes cannot replace needed policy debate, they make such debate more likely to lead to action.
 
4) Government programs and regulations should not live on indefinitely
 
Significant programs and regulations should "sunset" after a period of time, requiring explicit reauthorization or change.  Sunset provisions do not preclude continuing a program exactly as is, but they shift the default from bias toward the status quo to a renewed debate on the program's merits.  Such a debate ensures that programs are appropriately designed for current conditions.
 
5) The budget process needs to be transformed
 
Returning to a budget system with strong congressional chairmen for both policy and appropriations committees — as the nation had before the mid-1970s — can once again force timely debate on all twelve appropriations bills, and meet overall spending on Social Security and Medicare objectives.
 
Congress should be willing to shift "mandatory spending" on Social Security and Medicare to regular multi-year appropriations. If it is unwilling to do that, it can at least place changes in the liabilities those programs accrue on budget. Such a change would force a debate over the cost trade-offs among mandatory spending, discretionary spending, and tax proposals.  Importantly, this turning back (to strong committee chairmen) and turning forward (to placing "mandatory spending" on-budget) of the budget process should make elimination or replacement a viable option for out-of-date programs or program organizations, just as the debate enhances competition among policy ideas.
 
If the post-election discussion is only about policy, you can safely tune it out until the next election. Only when we learn how to make government work in the first place, in today's world, will anything change.
 
This op-ed appeared on VOX.com, November 17, 2014
 

Glenn Hubbard, Dean of Columbia Business School, served in the Bush White House from February 2001 until March 2003 as the Chairman of the Council of Economic Advisers and the OECD’s Economic Policy Committee {Read more}

Contact

For further information and media inquiries, please contact:

Rimjhim Dey
PUBLISEZ PR | www.Publisez.com

Send an email | 917.514.3359
 


In The News

Glenn Hubbard with HH Dalai Lama

Glenn Hubbard making his presentation during the first panel discussion with His Holiness the Dalai Lama at the American Enterprise Institute in Washington DC on February 20, 2014 – Read the full article on DalaiLama.com


The New York Times – Review


Morning Joe – Watch the interview


Glenn Hubbard - Balance

Squawk Box – Watch the interview


Glenn Hubbard with Charlie Rose

Charlie Rose – Watch the interview


Glenn Hubbard - Balance

Fareed Zakaria – Watch the interview


Tom Keene – Watch the interview


Glenn Hubbard in The New York Times Magazine

The New York Times – Read the article


 


Books by Glenn Hubbard