Hubbard and Navarro accurately estimate the future deficits of Medicare and Medicaid care as largely a consequence of rising health care costs, not the aging population.
Jeff Madrick, New York Review of Books | Read more...
Recommended for a general audience with marginal interest in economic policy; required reading for those crafting U.S. Economic Policy.
Jekabs Bikis, Library Journal | Read more...
Just now optimists about the course of US economic policy are hard to find. The imminent prospect of divided government makes gridlock in Washington, even worse than that of late, all too likely and the chances of bipartisan co-operation poor. But you never know. A handbook of intelligent centrist proposals – ideas that moderates in either party could support – would be useful in its own right, and might even start bringing the tribes together.
Clive Crook, Washington Columnist, Financial Times | Read more...
In their must-read policy manifesto, “Seeds of Destruction,” Glenn Hubbard and Peter Navarro outline the biggest economic problems facing America and what can be done about them. Hubbard is the former head of the Council of Economic Advisers under George W. Bush and is now dean of Columbia Business School. Navarro, a Democrat, is a business professor at the University of California, Irvine and author of ”The Coming China Wars.” Here are some excerpts from a chat I had with Hubbard:
James Pethokoukis, Columnist, Reuters | Read more...
It's rare to find a book on economic policy that is so well written for the general public without sacrificing first rate analysis. I would recommend it for undergraduates and for anyone who wants to get quickly to the heart of some very tough issues: fiscal stimulus; monetary policy; tax reform; trade imbalances; oil dependence; runaway entitlement spending; health reform; and preventing the next financial crisis.
When a book is this quick a read, you often don't come away which much, but Seeds of Destruction pays big dividends and left me looking for more. You come away understanding the key drivers of economic growth without having to juggle equations or IS/LM graphs. They cut through a lot of extraneous issues and focus on the keys to good economic policymaking.
Pete Davis, Capital Gains and Games | Read more...
Seeds of Destruction is an analysis of what is currently ailing the U.S. economy. More importantly, it is also a set of public policy proposals that its authors believe would go a long way towards restoring the prosperity that the United States enjoyed during the second half of the 20th century.
Jerry Tempelman, Financial Analysts Journal | Read more...
Looking for some bipartisan solutions to America’s economic problems?
Well, I just read a great book on U.S. economic policy that is definitely worth checking out: Seeds of Destruction written by Glenn Hubbard and Peter Navarro. Hubbard is the former head of the Council of Economic Advisers under George W. Bush and is now dean of Columbia Business School. Navarro, a Democrat, is a business professor at the University of California, Irvine and author of "The Coming China Wars.”
Here are some excerpts of a chat I recently had with Navarro.
James Pethokoukis, Columnist, Reuters | Read more...
Beyond the usual market-oriented prescriptions, the book defends a price floor for oil imports, price indexing of social security benefits, it is anti-fiscal stimulus, anti-easy money, for job training programs, and for health care it advocates eliminating the tax deduction, removing state-level barriers to competition, and malpractice reform. The authors also devote special attention to criticizing Chinese protectionism as a reason why American job growth hasn't been better.
I take Hubbard to be a (the?) future "kingmaker" for economic policy within the Republican party, with possible competition from Douglas Holtz-Eakin. If you wish to know where those debates and proposals are headed, this is the book to pick up.
– Tyler Cowen, Blogger, www.MarginalRevolution and New York Times columnist
Read the review at www.MarginalRevolution.com
Seeds of Destruction is an analysis of what is currently ailing the U.S. economy. More importantly, it is also a set of public policy proposals that its authors believe would go a long way towards restoring the prosperity that the United States enjoyed during the second half of the 20th century.
The book is worthwhile for two
principal reasons. First, it makes a persuasive case that our current
economic problems are more structural than cyclical in nature. Second,
the authors’ proposals are politically relatively centrist, which may
make them more feasible to implement than some of the more drastic
reform ideas offered by the political left and right. The book’s
centrist approach reflects in part the mixed political leanings of its
authors, Glenn Hubbard – dean and professor of the Graduate School of
Business at Columbia University and previously chairman of the Council
of Economic Advisers to President George W. Bush – and Peter Navarro,
business professor at the University of California-Irvine and a former
Democratic candidate for U.S. Congress.
The book’s central theme is that our rate of economic growth since 2000
has been significantly less than it was previously, and that this
decline is costly in terms of living standards and employment
opportunities. The authors argue that the lower growth rate is not a
cyclical phenomenon but is due to structural macroeconomic imbalances.
Too much consumption is financed by credit but not supported by incomes.
Saving is insufficient to help fund needed increases in capital
investment. Growing entitlement programs mean that government spending
will be taking up an ever-larger share of our economy. And chronic trade
deficits, stemming in large part from our proverbial addiction to
foreign oil and from mercantilist trade practices by China, also serve
to hold our actual growth rate beyond its full potential.
The authors discuss, of course, the global financial crisis, for which
they offer fairly standard mainstream explanations, such as monetary
policy that was too accommodative for too long after the 2001 recession,
home buyers who took out mortgages that were too large relative to
their incomes, lenders who issued those mortgages in part because they
could repackage and sell off their credit exposure, and inadequate
quantitative models used to price the risk of opaque financial
instruments such as collateralized debt obligations. But the book’s main
contribution is that it offers a longer-term perspective that extends
beyond the crisis.
The authors have few kind words for the economic policies of the current
Democratic administration. But the proposals they make are only
slightly right of center. When it comes to Social Security reform, for
example, many Republicans favor a solution that includes personal
accounts. The authors are at odds on such a solution, with only one of
them (presumably Hubbard) in favor. So together they recommend instead
that the retirement age be adjusted to account for the increase in life
spans since Social Security was established in the 1930s, and that the
annual increase in benefit payments be adjusted to match the rate of
inflation rather than the rate of wage growth. These two adjustments
alone, the authors argue, should be sufficient to make Social Security
nearly solvent again.
Not all readers may agree with the authors’ underlying theoretical
framework. For example, it may well be that structural shifts in the
broader economy mean that past growth rates are no longer attainable.
People tend to save more of their income during their high-earning
middle years, while spending more of it during their low-earning
retirement years. Thus, all else remaining equal, an aging population
may result in a lower aggregate saving rate, and in turn a structurally
lower growth rate.
Not all ideas offered by the authors may find a warm reception in the
political arena. For example, they propose that when the price of oil
drops below a certain level, the government charge a levy in order to
keep the price high, thus providing an incentive for the exploration of
alternative energy sources. This idea may go politically nowhere fast,
but the authors are to be commended for its novelty.
Overall, though, many readers are likely to find the solutions proposed
by Hubbard and Navarro to be a sensible compromise for solving our
current economic woes. Their book is a welcome addition to the ongoing
debate in an increasingly partisan political environment.
Jerry H. Tempelman, CFAInstitute.org