 All right. Good afternoon. I'm Sudinarski. I'm a professor of economics education and public policy here at the University of Michigan and I'm co-director of the education policy initiative here at the Gerald R. Ford School of Public Policy. We are extremely fortunate to have with us today two economists who played a leading role in shaping policy for the Obama administration. Professors Sandra Black and Betsy Stevenson. I'm going to tell you more about them in a moment, but first let me tell you how the event today is going to be structured. I'm going to ask them questions to get them talking and have a conversation about their experiences. And we are hoping for an inside glimpse at how economic policy gets made. We want juicy anecdotes. After we chat a while, we're going to open up to audience questions. There are cards in the audience that you can write your questions down on and these folks down here are going to curate them and ask them of us. If you're watching online, you can tweet your questions to at Ed Policy Ford. That's one word, Ed Policy Ford. And before I introduce these two, I also want to thank the Charles H. and Susan Gesner Fund for their generous support of this event and for the Ford School faculty and staff for their assistance in organizing this this event. So I'm going to introduce you both and then get you get you chatting. Okay, so here we have Sandra Black, who holds the Audrey and Bernard Rapoport Centennial Chair in Economics and Public Affairs and is a professor of economics at the University of Texas at Austin. She's a research associate at the National Bureau of Economic Research, NBER, a research affiliate at IZA, something German, and a non-resident senior fellow at the Brookings Institution. Sandra received her BA from UC Berkeley, PhD and econ from Harvard. Since then, she's been an economist at the Federal Reserve Bank in New York, professor at UCLA and now professor at the University of Texas. And she was on President Obama's Council of Economic Advisors for two years from 2015 to 2017. Betsy Stevenson is a professor of public policy here at the Ford School and the Department of Economics. She too is a research associate at NBER, fellow of the IFO Institute for Economic Research in Munich and Board of Directors of the American Law and Economics Association. Betsy earned a BA from Wellesley, PhD and econ from Harvard. And she serves as the Chief Economist at the US Department of Labor from 2010 to 2011 and two years as a member of the White House Council of Economic Advisors. All right, very distinguished. We also, you might notice besides all three of us being economists, there's something else we have in common that maybe you discerned and we'll chat about that too. All right, so, we're all wearing black pants. That seems a bit colorful. I want to point out. Spring! So first, let's just set some context about what role you guys played. So, can you tell us the role that the CEA plays, Council of Economic Advisors plays, and the White House, how it's changed over time in particular? So, either of you can start. Okay, I'll go. So, the Council of Economic Advisors is made up of three people. There are two members and a chair. And then they have a staff. And the idea of the Council of Economic Advisors is to give advice to the president that represents what's best for the American people. So, we represent the interests of the American people. You might think, well, everybody in government is representing the interests of the American people. But not exactly. There's a lot of different groups who represent the interests of various different people. And the CEA's goal is really to say, what are the overall pros? What are the overall cons? And what will happen to the overall well-being or welfare of American citizens and people who live in the United States if we pass some policy versus we don't? Now, when the CEA started, these three people were equal, and then they were all guys, and they fought all the time about who was the best guy. So, Congress said, okay, we can't have this anymore. It's getting outrageous, so they pass a new bill that says one of them gets to be chair so that they can actually spend their time doing their jobs instead of fighting over which one of them gets to be the head. So, that, and then under Reagan, the CEA chair became a cabinet position. So, CEA becomes a cabinet position. The chair is a cabinet member, and the two members are sort of like deputies or advisors to the chair, and the three together take all the information from the staff and advise the president. The way in which different CEA members chair those pairings, the ways in which they interact with the president varies dramatically based on who the actual chair is. And it's not always a cabinet level position. So, while Reagan made it a cabinet level position, Bush was like, I don't really need this. Not surprisingly, Trump also, definitely I do not need this. He kicked the CEA right out of the cabinet. Under Clinton, CEA was in the cabinet, so it's gone back and forth whether it's a cabinet level position. But regardless of whether it's a cabinet level position or not, it's always played a role in determining forecast, economic forecast, which feed into the president's budget. And it plays a role helping decide and lay out the kind of policies that are going to go into the president's budget. And then it plays a role advising the president on all sorts of policies that might be considered. Yeah, so I would, that sounds exactly right. So I would just add that one of the things, one of the core functions that we do is to link the academic research, I think, and the policy. So we, because many of us are academics who are serving on the council, we are in the weeds and the research. And so one of our jobs is to take that research and put it into a form that policymakers and the president can understand and make sure that as they're doing policy that we're using the best evidence possible. That's a really important point, and I'm really glad you brought that up, because one of the things that I noticed was that there really isn't an equivalent for other social sciences. And so there were times where I was like, they need to know the sociology literature on this or the psychology literature on this or, you know, the literature from these other fields. And there was, we had real debates about whether it was okay for the CEA to write a memo to the president, the literature outside of economics, because we thought like that needed to be informed. And there isn't anyone who's as close. So remember the CEA chair was a cabinet level position, so there are these like behavioral units and things like that, but there are sort of many layers down. And so, you know, economics in that sense is quite elevated. So to start out by making us feel happy about what we do, can you give an example where research actually played a role in steering policy? Uh-oh. I can. You go first. You can go first. You can go first then. But you can have my example if you pick it. Oh, so I don't know. So one of the things that, oh, I'm not, you go first. Okay, so I have two great examples, because one of them is where we moved forward because of what we knew from academics, and one of them is where we stopped badness because of what we learned from research. So the most positive one is what did we do going forward? Well, the president really wanted to see some movement on the minimum wage. The minimum wage has been stuck for some time, and he wanted an increase in the minimum wage. And there was, you know, not a lot of cooperation with Congress. You guys probably know that because we still, we never, he never succeeded in getting an increase in the national minimum wage. But he, so one of the things President Obama did when he realized he was not going to have the cooperation of Congress anymore for the rest of his presidency was to think about what could he do without the cooperation of Congress. And he does have authority over federal government contracting. So he has authority to make changes to the way in which the government procures goods and services. But it's not unlimited. It's not like he can just say, I would like to do this. And there's actually a procurement act that says he can make any changes to government procurement as long as it's in the best interest of the American people. And so that it increases the economy and efficiency of our procurement process. Okay, so these words economy and efficiency ended up being really important to my time at CEA. And so I thought the place where just we had to lean on research the hardest was deciding to raise the minimum wage for federal contractors. And we had to, as CEA, make a case. So one thing you have to know about President Obama, just in case you've gotten caught up in the current presidency, President Obama, he did not want to move forward on anything unless the lawyers told him it was like 100% legal. This is like an unusual view I know in our current time. But it had to be legal. And so the thing that CEA had to do was convince the lawyers that raising the minimum wage was something within his authority under the Procurement Act. So what did we have to do? We had to use research to show that raising, forcing contractors to raise wages could possibly give the government a better deal. So what did we do? We leaned on the efficiency wage literature. And we said, when you pay people more, there's evidence that they're more productive. Okay, then the lawyers come back to me. Well, why wouldn't the contractors just do that themselves? They could always raise the wages. And I said, well, they're not thinking about the externalities on the government workers. So as the federal government, we should be thinking about how the federal contractors affect the productivity of the people that they're working with. The government workers. And if the contractors are very inefficient, they're like low paid inefficient workers, then that's going to have spillover effects on the productivity of the federal government workers. And if we take those spillover effects into account, we can make a case that forcing a minimum wage of 10 is going to lead to more economy and efficiency in contracting than not. And it really relied on, I mean it was like a 20 page memo on all of the literature on minimum wages efficiency. And then we did our own research. We actually looked around the country at places where cities and states had passed like living wage ordinances, higher minimum wages. And we looked at what happened to procurement costs. We did a classic sort of diffs and diffs analysis. And we said, look, when these minimum wage increases have gone up, we have no evidence that procurement costs go up and we see in some cases actually the procurement goes down. So we also had our own empirical analysis and that was in fact passed. It's affected a lot of workers. You hear federal contractors you think that's small. Federal contractors are a large body of workers because one of the things that has happened as we've decided to sort of try to shrink government is, we haven't really shrunk government but we've turned it into a lot of outside contracting jobs. So if you look in any government agency, a large share of those workers are contractors. I have thought of an example. Sorry. And it might be the example that you are going to give in terms of when something didn't happen. One of the things that was really interesting to me was seeing how research could inform. So my feeling is sometimes good policies might have unintended consequences and that might be okay. You might still want to do the policy but it's really important to know that these are the consequences. And so while I was there, they were talking about the ban the box policy and which is a policy where you don't ask about criminal history right up front. You can ask later in the interview process to try to give kind of another chance to people who have been involved in the criminal justice system. And so I think kind of the idea of giving people a chance seems like a good one. While I was there, this really important new research came out. A number of papers came out saying that there could be unintended consequences to this type of policy. Which is that now because I can't observe that you have a criminal history but I really care because I don't want to hire you. So I'm going to choose other characteristics about you to infer your criminal history. And that characteristic could be your race. And so what this new research showed is that in areas where ban the box was implemented, that you see that it had some of these unintended consequences of hurting people who weren't involved in the criminal justice system but might be inferred to be involved. And so when that came out, it was really important and part of CEA's job was to let people know and say, okay, you might still think this is a good policy. That's a normative statement but it is having these consequences and you need to factor that in when you're making your decision. So that's a great example of research stopping policy. And the other one I was thinking of was the college ratings, which was it didn't quite stop the policy. The president announced it. Explain what it is. So college ratings was a policy where what we were going to do is go out and try to figure out the value added of each college is a rating saying like this you get the most bang from your buck out of this college versus that college. And the president actually outside the White House were sort of screaming. So every economist I knew outside was saying you can't really do this. The president announced that we were pursuing this policy my first week on the job. And I was like, I got sent the speech to read and I was like, wait, we can't do this policy. I call up everybody and they're like, that ship has sailed. It's like on the ocean. You've got to wave at that ship and just sign off on the speech. And I cried. I really cried because I was like, we can't do this in a way that's not going to hurt really good schools and unfortunately help not so good schools. And then we spent the two years I was there just doing the research and showing how no matter how you did the ratings we couldn't be fair. And that's because in plot you have to make if you're looking at wages. You have to look somebody in the eye and be like, you know, you that school there's a lot of philosophy majors and those are bad choices because those people come out and don't earn very much. So we're going to give that school a poor rating because of the types of majors that people are choosing in that school. So those theater programs, those religious programs, you know, those are the schools are going to rate poorly. And I was like, I can't do that. It feels bad. And and at one point we're in this meeting with the president and he's like, wait, it sounds like this doesn't work. We're like that. Yeah, it doesn't work. That's what we've been saying for a long time. He's like, so why aren't we just stopping it? We were like, okay, we'll just stop it then. And that that was the end of that. But something dig him out of the college, the data. Yes, but then we got all the data out there. So the good, good triumphs over bad through research. Right. I think I remember a phone call on the first night. Didn't know they were tears. One thing that was really nice just as a side, the president Obama really cared about the evidence. Like he was so interested in the research and he was, he was, you know, he really paid attention. And probably my best moment, my best professional moment was when he called. We were working on wages and why wages weren't growing, which is a big puzzle still. And he called me and Jay Shamba and who was the other member while I was there and Jason Furman, our chair was out of town. And he just wanted to talk to us about what was going to happen as technology advances and how that's going to affect wages. And it was the coolest 10 minutes of my life where I was talking to him about skill bias change and what we know and what the research says. And what we think that means going forward. And Dennis McDonough looked like he was about to fall asleep. It was like trying to get us, because I think it was supposed to be like a two minute meeting and we were in there for 10 minutes. And it was just so cool because he really understood. He kind of got it and asked all the right questions. And it was just so cool to be talking to someone who has so much power, who really cares about what the research said. That leads nicely into a question I was going to ask, which is like how decisions around economic policy get made and how CEA intersects with that. Because it sounds like it's not just something gets proposed and CEA evaluates it, but that you're sort of there at various moments in the process. So the way it works is usually the domestic policy council or the national economic council will propose a policy. And CEA doesn't usually propose a policy, although it could happen. And the lower level staff kind of get together and discuss. And so some of our staff economists might meet and talk about it. It moves up one level to the senior economists, so they have kind of the next level up discusses kind of the bigger issues. And at each level of the process, usually there's someone from CEA sitting in on these meetings and participating and trying to give the economics perspective of it. And then it would be the deputies level, which was the members, and then it would be the principals, which was the chair. And at each point you kind of flag what the issues are. And hopefully you can all come to consensus. That doesn't always happen. But often people were pretty open to at least seeing your perspective and listening to what you were doing. And then once the principals had decided and discussed, then it goes to the president. So every CEA is different, and every CEA chair is different. And the thing that was really amazing about working with Jason Furman, who was the CEA chair, was Jason had been with Obama since the campaign. So he had a really close relationship with Obama. He also is a person who just doesn't have a ton of ego, which is not that common to find in anybody, but particularly a guy with that much power in the White House. But what that meant was Jason's philosophy was we should split up our areas three ways. And Jason had the things he cared most about, business taxes. Like cared a lot about. Which is great. And then he sort of delegated the rest of the stuff to the other two CEA members. And we, as CEA members, got way more face time with the president than a CEA member, I think typically gets, even at the beginning of the Obama administration. So that was for two reasons. One is Jason's personality. The other thing was that Obama, in the second term, he was worried that he and his chief of staff, Dennis McDonough, became worried that it was too insular, that he was hearing too much from just the person at the top. And so they tried to expand so that he was talking more directly with the people who were sort of one layer down. So that meant that as CEA members, we had a lot of access. And the way I would describe it is Sandy describes the bottom-up process, but the bottom-up process is usually started with a top-down process. So for the issues that I was involved in, it would be like a meeting, and it might be me and the Treasury Secretary and the head of the NEC and the head of the Domestic Policy Council and the head of OMB. And then we'd discuss things from a big-picture perspective. We should do something about hunger in the country. Yes, hunger! That's an issue, right? And so I'm being a little bit sarcastic there, obviously, but you come up with sort of broad, principled ideas. I'll give you a more direct one, like Ryan has proposed that we think about opportunity grants. This was something that happened when I was there. We had to reform the way in which we give money to low-income people. And so then we got together and it was like, okay, should we do that? Yeah, we should think about reforms in these ways. And then let's push this down to our staff, and then they're going to work it back up to us and tell us what is in the realm of possible, what things would cost, what the trade-offs would be. So you sort of come up with ideas. So I'll give you another really clear example about that. We all get together and say, this is the top number for the president's budget. The budget number is going to be X. Now you guys got to help us come up with all the policies that add up to X, which, you know, X is a big number. But you have to start, so there's this top decision, then it gets pushed down, then the bottom comes back up and we make decisions. Again, and sometimes we go down, up, down, up, until it finally iterates to some sort of conclusion. So lots of work to try to come up with the right solution, the right recommendation. Can you give an example of a policy decision where the president's decision was different from your recommendation, either as an individual or a CEA? So we discussed this earlier and I said I lost a lot. Sandy, she didn't lose. I wasn't there as long, I think. So yes. And I think the, you know, the thing was that even when we lost, the thing that was important to me was to know that the views that we were putting forward as CEA were heard. And that was one of the things the president was amazing about, is that he clearly heard them. So one of economists, economists have views that are more centrist, I think, than the rest of the United States, at least right now. So that means, again, a democratic administration. The economists are sort of seen as being towards the right, more conservative than the progressives that are, you know, leading the charge on a bunch of issues. And that's because the economists are always talking about the cost, cost, cost. And I don't just mean like, cost isn't how much money it's going to cost, but if we help these people, will we accidentally hurt these other people in the process, the unintended consequences? And so we're, you know, Alan Krueger once said, the worst thing about being a CEA chair is always being the skunk at the garden party. And so that's the sort of, that's the role of the economists in, partially in the Obama administration. And I think if you look in more conservative administrations, because, again, economists tend to have more new views that are sort of more in the middle, you'll often see them having more lefty views in a very, very conservative administration. But that meant one of the big policy debates we had was on how much to raise overtime pay to. And I had a lot of, I have a lot of concerns about the idea of time and a half because of the fact that it, now I'm going to sound like a wonky economist, it puts, there's a non-linearity where you have to, at some point in the budget set, the person hits a certain number of hours and you have to pay them time and a half. Well, once you do that, what's the probability that the, you know, their, the, you know, what they can produce in that next hour is now 50%, worth 50% more than what they could have produced in the last hour. So what we tend to see in the data is that the more overtime there is, the more people just get restricted to 40 hours. Or if they want you to work sort of a regular, regular overtime is no problem because they just renegotiate your salary so it's the same regardless of whether you're required to pay overtime or not, right? So if you're required to pay time and a half and you work 50 hours, they do the math and if you were making $40,000 a year, you're still going to make $40,000 a year, it's just going to look a little different. But there was proposals to raise the overtime threshold so that anybody making under $65,000 a year would have to get time and a half. And that means that you're essentially an hourly employee. $65,000 is a lot of money. There are CEOs of nonprofits making less than $65,000 a year and I had a lot of concerns about telling those people they're now going to become hourly CEOs of nonprofits and that they're going to have to figure out their nonprofit budget if they want to work more than 40 hours a week. And we had a meeting with the president. It went like an hour and a half where I presented my case and the labor secretary presented his case which was a much higher number. I was down at like 40, 42, 45,000. So we all wanted to raise the threshold, okay? We all wanted to raise it with how far we were going to go. And, you know, my favorite memory of the whole time being in the administration is we're having this, it's two parts of this. One, right before I walk into the meeting somebody pulls me aside and they say, Jack Lew is really worried because you're the most left-wing person on the president's economic team and you're representing us. So I was my job to represent it in the meeting and I was like, you tell Jack I have his views. And so I go in and I'm making the case that it shouldn't be that high. And then at one point the labor secretary says, you know, Mr. President, we've been debating this and debating this and I just want to say clearly, you know, what I believe is we have to put more money in the pockets of middle-class people. And the president says, whoa. He's like, we're having a discussion here and I just want to put on the table. I don't want to speak for you Betsy, but I'm pretty sure she's not over there saying, I hate middle-class people and I don't want to put money in their back pockets. Is that what you're saying, Betsy, that you hate middle-class people? I'm like, no. He's like, aren't you saying that you think there won't be more money going into their back pockets? I'm like, yes. He's like, OK, now that we're all straight on that, let's get back to discussing the merits of this policy. And so he really got research. He really, really got it. And at the end, we lost though. At the end it was the politics. It was that he felt like the progressive wing of the party was going to think he was too conservative if he went with a number as low as where CEA wanted. But he walked out of that meeting and he said, this is hard. I have really heard your really important economic concerns that there's some guy out there right now who's working his tail off and he wants to be working a lot of hours because he's bringing home more money for his family a year because of that. And I'm going to take that option away from him with increasing overtime. So he really got it. And he said, but there's this other thing which is people don't see us doing anything for the middle class and they need to see us doing something. And all my messaging folks over here are telling me this is the best policy. So I'm going to go away and think about it for two days. So when we lost, Jack Lou said that I represented the case as well as he would have. And we felt like it was really... He made a decision that was based on the economics plus the politics and he heard the economics. So we lost, but it was well heard. The thing that I really thought a lot about while I was in DC was the distinction between being an economist and what your politics are because as an economist we're perceived as being less progressive because we say that sometimes something that seems like a good policy may have these unintended consequences or raising the overtime might not have the goal, might not achieve the goal. When in reality that's not politics, that's the evidence of what's going on. So I found it really... I struggled with this because I would say my politics are definitely more progressive but my research is my research and I keep that distinct. And so showing that something like the ban the box policy could have these unintended consequences doesn't mean that I don't think that helping reforming the criminal justice system is important. I think it's incredibly important. I think that when you make policy you want to make the best policy that you can and know what the consequences are going to be. You might still decide to do it. And like the overtime rule, the evidence didn't suggest that it was actually going to help as much as people thought it was going to help and that's important to know when you're making the policy. So I realized while I was there that they're very distinct. My research and my politics are very distinct and in DC it's very hard to keep that distinction clear. So I think that's a really good point is when I said that economists' views are more bounded what are they bounded by? Facts and the research, right? So I mean we have pretty unilateral views on trade. That's because they're bounded by the facts. Peter Navarro being the only economist in the entire universe who has a different set of views. But they're bounded and we don't... They're bounded by facts. So it doesn't mean that you don't care and you're not trying to help. So if you think about your politics as how much do you believe in redistribution or how much do you want to like help others then we're just as progressive or conservative as anybody else but we're just bounded. We will say that trade has overall gains but that some people are going to be hurt by it and so how much you weigh the fact that some people are going to be hurt by it is the fact that it actually happens is the research. And so to me it was something that was really important to think about that distinction because it is my politics and the research don't always line up but because it's something that sounds like a good idea to me and helping a group of people that I want it's really important if you realize that it's not actually going to do that and then you think okay well then what? Does that mean that I don't want to help these people anymore? No it means that I need to know the evidence to make a good decision. So I'm going to circle back to the thing we have in common. So we're all economists and we're all women and this overlap of these two groups is not very large and some of the things you've been talking about really get me thinking about gender dynamics who's arguing and how are they arguing and large rooms of people jockeying for position what are gender dynamics like when you are working on these issues whether in the White House or with agencies or Congress? So the White House made me angry about my profession because I was like oh wait it's not always got it's trying to shut me down and trying to silence me like I mean the aggression towards women we see as economists in our profession that's not flying in the rest of the world it turns out and when you go into the White House you see like there's like manners and social norms and things that mean that men and women work together nicely so it's not all sunshine and roses but I found it much better than anything I've experienced anywhere else I don't know about you. No I was telling Sue yesterday that it was so interesting to me that when I went when I was there especially when I was talking to the president I never thought about the fact that I was a woman that I was an economist he was listening to me and that was I really felt like that was my role and that was how I was viewed and I felt that way generally yeah I thought the group of people we worked with were really a great group of people I had I was working with Jay Shambaugh who is the member as I mentioned and we had a really interesting dynamic because Jay is a talker and he will admit that you know so I don't think he'll take offense but he really liked to be part of the conversation and I'm much more waiting and seeing and kind of waiting for my moment and so he was super aware of that and so we were he would kind of wait for me to make my comment and then he would kind of support my comment you know we usually talked about things before we went into meetings and I really appreciated how kind of where he was that our dynamics are really different and you know when I knew something was coming up that I wasn't going to want to talk to I could always turn to him and he would take the lead but he was also kind of watching me to make sure that if I wanted to take the lead that he would let me do that and I really appreciated that Were there any particular rules of thumb or you know customs that folks went by to try to make sure those voices were heard around the table and that there was not voices being quashed? So one thing is that there would be explicit requests to hear from someone's group yeah to hear from a group like I haven't heard from you what do you think I you know that if you like if there was somebody at the like if there was somebody in a meeting who hadn't spoken the whole meeting we wouldn't end it without like getting them to weigh in so there was an understanding that everybody needed to be heard and you know that I think part of what really made a huge difference is just it was really gender balanced so when like 50% of the people around the room are women when there's a good representation of you know people of color when there's a good representation of just difference differences of all sorts of sexual orientation parents non-parents you know socioeconomic status in terms of you know your family background it was just there was a lot of diversity and that meant that people there was a different dynamic like people were used to it there wasn't a feeling of a dominant group there was a feeling of a diverse group and I think people you know you're forced to interact in a more inclusive way once you're in a really diverse group like that and it was also really cool that everyone had a set of skills that was kind of you to me it seemed like it was unique the economists kind of brought something to the table and you know each person kind of brought something different to the table and it was people listen to each other and you did have to kind of weigh in so they would say oh we haven't heard from CEA and what does CEA think and so yeah it is a case that these different groups are really bringing something different so CEA is bringing you know the wonkery but then like what are the nerds think but then there's these various councils and everybody sort of assigned different roles one thing people get really confused about is there's a National Economic Council and a Council of Economic Advisors what's going on with them so the Council of Economic Advisors are people who know how to do economics there are people who have studied economics they're typically academics the National Economic Council typically know economists because they're not actually giving they're not trying to develop economic advice they're going to run the process around making decisions on economic policy so that means that they're going to they are in charge of making sure they know what CEA thinks and they brought CEA's views in that they know what treasury thinks they know what labor thinks they know what you know they've got to go across these various groups and so you know it's set up in a way to make sure everybody gets heard there was something that happened at the White House that was sort of before my time it was in the first term which was a lot of the women were like okay we're going to make sure no guys take our ideas so they did this amplification thing where you know if a woman said something another woman would try to say it again really quickly before some guy said it and tried to claim credit but they were like they said like the women were on top of this day one in the White House they were like okay guys this is the Obama White House we're not having any of this men stealing women's ideas stuff this is how we're going to do it by the time I got there you didn't even need to do that anymore as you sort of said when you started those comments this is not what it's like in economics in general there is not gender equity or equity of ethnicity or race or any of that stuff so the economic research is being fed up and that you're tapping into in order to advise the president is not coming how do gender dynamics in general economics not turning out many feeble economists how does that affect your ability to advise the president about economic policy are the right questions being asked are there questions that are not being asked well one point I make when I talk about the problem the need to increase gender diversity and other forms of diversity in the economics profession is that research shows that while men and male and female economists believe equally in sort of standard models of economics we can all read the same 101 textbook and have the same sort of main ideas about how incentive shape behavior but our politics differ and our differing politics mean that our policy recommendations that come out of having the exact same model about how incentive shape behavior we still end up making different sort of policy recommendations and becoming interested in different types of policy issues and so we see that in the data like women believe female economists believe more in redistribution than male economists it's not because female economists don't believe in efficiency equity trade-offs it's not that they don't think that when you tax people you know that there's no incentive effect that they think the cost the benefits of redistribution outweigh any cost so if we have a field that's less diverse there's two things that are going to happen you're going to have a smaller pool of diverse people to feed into policy advice positions like ours and that was definitely the case when I was leaving I was looking hard to find a woman to replace me because I didn't want the whole economic team to be male and that's because I think that women do bring different perspectives I also think that the pool of research we're drawing from is different because of who's actually doing the research not that they find different things but that they choose different questions and so we only have the pool we're given the more we can diversify that the more we'll have done research that actually represents what the general public wants to know rather than a smaller sliver of the public Should I turn to questions from the audience? Hello, can you hear me? Hi, my name is Shawn Martin I'm a second year in econ and Ford we have several questions here about the role of other social sciences so you mentioned that an alternative perspective from other sciences including sociology and psych is lacking the White House what can we do about that? You have thoughts? I can have thoughts if you don't have thoughts You can have thoughts I guess I was the one who raised it you know I think well there is a science and technology there is a science advisory board particularly for... no not anymore when it came to pure scientific research I should have been clear about this in the morning meeting this guy taught me everything I know about climate change and terrified the shit out of me about all sorts of stuff like antibiotic resistance oh my god it was like a daily terror warning from the science guy that continued on when you left I mean he was really good but he was really scary so I was thinking more about social sciences and like the psychology and sociology and... political science oh no I just didn't know they had anything interesting to add oh just kidding we are interdisciplinary school here board I'm just kidding no you're right there's no political sciences so you see some of them I think doing forum policy advice right they have windows through forum policy advice you know I do think that getting advice from research is a really good idea and you do need in order to do that you need to have people who can interpret the research having a voice at the table so I saw econ having a big voice by being in the chief of staff's morning meeting with the president's top advisors having the science advisor in that morning meeting you just see more influence and so the question is should the council of economic advisors become a broader council I think that's one thing that could happen and could actually be quite useful and you know so that it's a little bit more interdisciplinary or should there be some other kind of council I think it's hard because you can only jam somebody into that room until you once again nobody has direct a direct line to the president because there are just too many people around and one of the things that we tried to do is when we were working on a particular topic we would try to bring in experts on the topic to talk about so workplace scheduling for example was something that was an issue that we thought about you know should you have fixed schedules and how would that affect workers and so in those cases you could bring in the experts across disciplines and have that conversation in terms of getting it to the president it's a little bit harder certainly with certain topics like education there's a lot of different evidence and so we would put all the evidence together or try to when it was a particular topic it is hard as Betsy said to get more access to the president because it's a finite amount of time and so it's not clear what the best strategy is for that. Yeah it turns out they only give presidents 24 hours in the day too right. Okay my name is Hanna Zlatnick and I'm a first year MPP student and so this question is how do you deal with policy problems and issues when the evidence and research is mixed or inconclusive about what direction to take so I think that's a really good question because that is often the case right most of the research in some ways that's why it's exciting because we still don't know the answer and I view it as that's our job is to say what is a good paper what research is more compelling what's less compelling and why our job is to be the expert and kind of to make the decisions on what we know and also to be honest about what we don't know but to some extent you have to make policy without having run a policy experiment before and so you're taking kind of historical things that have happened and trying to infer what would happen if we made policy it's nice when it's conclusive and you have the answer all set that almost never happens and so I view it as really that is part of our job is to be the one to say okay these are the studies we find the most compelling and this is why so it's completely right and that's exactly sometimes there's like a lot of conflicting studies and we sort through it sometimes we have to lean back on theory so going back to Sandy's like ban the box example in some sense like you got really lucky and that these studies came out that had found exactly what we thought could happen which was an increase in and racial discrimination when I was there we were discussing whether or not to do it and I didn't have any studies I just had theory that told me this could happen and the argument I had to make was I was like well I'm anxious about moving forward on this when we have a bunch of states that have done it and we're going to get some evidence and here's the potential negative consequence what would you do if it turns out that that negative consequence is right and should we wait until we have more evidence before we make the policy but that was really hard because it was a not there yet but here's where my anxiety is coming from and it was definitely harder to make that case than when you actually had some evidence in front of you my name is Stephanie Owen I'm a third year Ph.D. student in economics and public policy so the committee on the status of women in the economics profession they just published their most recent newsletter and it includes some pretty egregious accounts of sexual harassment and assaults within the field of academic economics you all three have probably seen this so one proposal within this newsletter is to adopt a reporting platform like Callisto for women and others to report experiences of sexual harassment do you think this is a good idea and do you think it has any chance of being implemented and if you have any other general thoughts or experiences on the topic of sexual harassment in economics first what such a platform would look like I don't know if you've read up on it I believe I think this just came out today it's been discussed before there's some sort of central reporting platform where a person who's been harassed can register the incident and it sort of sits there unless another for the same accusing the same person comes in and at some point it gets triggered and information gets released I believe this is the format of it let's pretend that's what it is respond and you can respond to this too I think you're open I already did on Twitter it was cursing well you didn't respond to the policy I don't think just your frustration with the situation I have not read up on this particular policy I know that it's heartening to hear that it's better in the White House than it is in the economics department so we just all have to aspire to work at the White House let's get our tenses clear burn number two in fact there's no females nothing to worry about so academic economics has a particular problem it also appears that it's also a problem appears in financial economics or in the field of finance in Silicon Valley among findings so there's a lot of places in econ that this is an issue it's not just about academia maybe the government is better than these other places we have a cultural shift that needs to take place I'd say and the only one of the few ways you get cultures to shift is to change the people who are in the culture so I do think that improving the pipeline and getting more women into economics is an important part of this so I think there's a limit to what you can do in terms of educating men about how they should behave there's something to be done there but at some point you hit a limit and you need to get more women in econ itself and this is a chicken egg problem so do you use quotas for example do you report bad behavior or do you affirmatively try to increase representation of women I clearly don't have a clear policy position on this I'm just mad about the whole thing one of the challenges is that there is a process in any given university for someone to report if it happens within their university the problem with any academic field is that a lot of this stuff is happening across universities at conferences and there's still situations of power somebody who tells you that they're editing your journal article the editor of the journal that you've just admitted your article to and you need to publish that article if you get tenure sees you at a conference and perhaps is doing things they shouldn't do where's what should we be doing so I was recently elected to the board of the American Economic Association we have a board meeting next week you know there are people who have different views and so I know about what we should do there are associations that take on a role of like an ombudsman so that if we see this happening you know there's a place where you can report where they can decide but as an organization that's not the kind of thing that's done in the past so there's a real question as to whether the AA needs to step in and do something if they do step in what is it that they would do how would they collect information who would they report to would it only be if you're at an conference or journal and so I think those are the kind of questions the association's going to have to wrestle with because when we think about that as a profession what should we do I mean that's the only professional organization we have we're not a collective in any other way and I think every university has already taken the steps that the university really can take I think most universities have good policies in place so I think that's sort of the next place to go and I think I don't have the answer to how to fix it I do think the long run solution is if you have more women these things will become much less common because you will be much less likely to be at a table with all men I'm sure I have certainly been at conferences where there are no women around and it is you know even if it's only one person it's really hard to be in that position where you feel like you're alone and no one is defending you or no one has your back and so I think kind of having more women around would make this a much better situation and there's what men in the profession can do now, there's trying to shift policies and change the pipeline there's what can people do as people who are in this profession and I've had some male colleagues, classmates of mine who've been tweeting back and forth about what they try to do to improve things you know so if you're a man who's been invited to be on a panel and you want to make sure there aren't more manals inquire about the composition of the panel and refuse to participate if you if it's not going to have any women on it you know so use the power that you've got to try to shift things a bit, they're all small things but small things can add up and they have to call out bad behavior one of the things that we heard a lot from men in the profession when the study came out that found there's this website economics job market rumors the top 20 words used to describe women, only one of them could possibly be related to the economics profession, I think it was non-profit the other 19 I mostly cannot say in this room and I have a potty mouth that you've already probably heard a little bit of and I still cannot say those words so it, so that comes out and several male economists have said that's just like three guys and we're like, no actually a lot of guys are going on to that website and they're certainly not saying like what are you saying, that's horrendous, like don't talk that way nobody's like like the lots of guys admit to going on to that site and they're not embarrassed being on that site even though they know that's how women are talked about and when this whole thing came out on this hubbub, there were two things one is I read an economist who posted on a public site with his name what does she think men think about when they're talking to their female colleagues and I was like dude, no he was like, this is just male sexuality and I'm like, no that's not but he thinks it's okay that he put that out there with his name so that's a problem what was his name he put it out there with his name and then the second then the second thing is a woman told me that she went to a conference not long after that and there was a group of guys sitting at the table next to her who were talking about how it was a bunch of oh those ugly girls that they let in the econ those ugly girls don't like it when they are talking like this and the whole problem is about the attractiveness of the women in economics and that is exactly what's going on on that EJMR they're always talking about women's physical attractiveness and then the idea is that we're only getting upset because we're not physically attractive enough so and that's happening in a setting and nobody's like jumping up and down and saying you can't talk this way none of the guys at the table even if only one of them was saying those words you guys are just sitting there and you just can't we can't tolerate it anymore she was actually tweeting that out as it was happening which meant that a lot of us could come out to at least support her which I thought was useful a good use of social media that she was basically as these people were saying these things she was transmitting it and we're like get over there and take a picture post the picture we want to see who they are so that's the thing I think it's the anonymity the problem right you can't you're not held responsible for what you say and so I suspect there would be much less of it if they had to put their name on it so so the AEA the new ethics statement does say you should not hide behind anonymity whether it's in referee reports which are also anonymous or on a website there's a certain way we expect everyone to be treated because I do think the anonymity is playing a role question how does or did a position like CA impact your academic career does the work that you completed there kind of scholarship so it was really interesting for me because when I was there I got interested in the whole different area of research so a lot of my research focuses on investing in children and clearly that's something that policy makers care about I learned a lot about macro policy and wages and thought about what's driving wages and so I think in some ways it's broadened my research so that I want to do more about you know I've talked to some of our macro economists at UT Austin about maybe working together and which they were very excited about to be trying to bring me over to the dark side but but I think it really it gives you a lot more insight into what's what the important questions are that as academics I think sometimes you get you get buried in the weeds and when you're in DC you really have to take that step back and say okay what are the big picture questions that people are thinking about and how can I use economics and data to help inform inform that that's a really nice answer it's a nice answer because like there's like the not nice short answer which is you can't do research for two years you can't know what you do there does not count as research doesn't matter how many papers you're right there doesn't matter how many chapters you publish in the economic report of the president you know one of the things in government is we never put our name on anything so that's one reason but it's just particularly at the level we were at we neither have the time nor are we permitted to touch our own research and we were designed from the national bureau of economic research you know again that was back in the day where there was a certain amount of ethics that were being imposed and we were told resign from everything except the only thing you have an exception on is a tenured position but but it does broaden it broadened me so much and it helped me think about like what matters and what doesn't matter and it better thinking about policy and it made me want to come to a school where my knowledge about policymaking would really be appreciated and so it was one of the driving forces moving me here to Ford was that I could think about policy and research at the same time and like both parts of me would be highly valued by the faculty I mean I would say that universities and departments differ in how much they value public engagement and if you are somebody who cares about if you're going to be an academic and you care about engaging with public policy and that's going to be part of what you do you choose a department that values that because otherwise you will not get credit for it but schools of public policy in particular tend to value this quite a bit so how do you think that the facts economists find through their own research can become more commonly known or part of popular discourse send them to Sue it's kind of true I do think we need to be more inventive about so communicating well is not something that is taught in economics departments you might have noticed that present company then there's selection into economics so there are some people who come in already having some communication skills and we hope they survive being trained having that trained out of them but I think this is you need to learn I actually think that the kind of training that we do here to master the public policy is terrific in that regard because we're all about translating expertise into a format where it can make a difference in politics so speaking good English is important and not using in tribe language I think this is not just true for economics but also sociology and psychology if you go out into a public setting and you're speaking about the evidence around a given policy but you're using tons of insight or jargon you're not going to get anywhere you need to be able to speak in such a way that people who are not total nerds can understand so I think people who play the role of translating facts into engaging sticky facts there's a nice book out there called what sticks is that what it's called do you know this book make it stick so it's basically about stories so you know charts and tables don't tend to grip people's minds stories and narratives and anecdotes tend to so it becomes about you know if you're going to get a fact out there you need some sort of story that goes with it as well something that makes the whole statistic stick in somebody's mind and we're not particularly well trained to do that but those who care about policy probably do need the training so it's you know I think the professional associations can play some role in that for example so I completely agree with that and it's not just about caring about policy so I'm writing a Principles of Economics textbook anyone who's read it probably knows I care a lot about stories because I think that stories communicate ideas and so you know when you know my development editor says do you think it's too gross to describe a negative externality as farting in an elevator like do you think that anybody who reads that is ever going to forget what a negative externality is she's like that's a good point so you know you have to figure out how we communicate these things in a way that makes it stick I completely agree with this and I've been having actually like an existential crisis about it with some recent public policy decisions because economists have pretty uniform views on trade and yet we seem to have failed to communicate to the public the sort of general facts about trade and I'm thinking you know I wash my hands all the time because the doctors tell me that there are germs on them and if I wash my hands I won't get sick as much but I never see those germs and they never have any actual evidence that hand washing is keeping me healthy but the doctors convinced me the health professionals I never question it and how do we get economics to be like hand washing so that the general principles of our field can be communicated so that we're not like so that the current the definition of the current account which is that identity becomes like a political debating point about the relationship between various parts of the current account we have to do better I'm noticing comparative advantage right so this is an example of something that economists agree on it so much that we don't talk about it and we don't spend much time convincing each other of it using words other than you just say compare advantage and conversation is done okay back to our offices that's not sufficient in the public arena or current account identity room call silence no that's fair that's fair but we do have a bunch of facts and we need to figure out how we're going to communicate the facts to the public that if you know what happens what do we need to have happen in order for us to reduce the trade deficit with China right we need to buy less of their stuff so we need to pay more for their stuff and you know we need to send them more of our stuff so that they pay less for our stuff and we also need to make sure that they're not buying our debt because we're passing a debt package where we need to get more people to loan us the money those are the things that will all have to happen the public understands those are just facts they're not opinions but getting back you know valuing persuasive writing I think is something that economists don't tend to do I've heard people say things like well you should just be able ideally you should just be able to publish the tables and the figures and that's science that's the science and that should convince people and everything else is sort of public relations or window dressing or somehow dishonest and even comments like something that's well written makes me nervous I don't trust something that's too well written because it's sort of using these tricky persuasive methods to make me think things and that just needs to be stamped out but the idea that having a narrative is window dressing I think needs to be stamped out if we actually want this stuff to have an impact beyond our classrooms you need to actually be able to communicate it in a way that is persuasive research has shown that female co-authors get less credit if their contributions are ambiguous publishing in economics is alphabetical in terms of order of authors do you think changing this practice is something people are discussing do you think it could possibly or is it should something that should be changed it's definitely something people are discussing there's discussion about whether it should be randomized actually so that doesn't help in terms of the reducing ambiguity it just means that's because the people at the end of the alphabet are sort of throwing a fit a fitter well that seems black so I'm good with alphabetical for the most part so there is this like research that the first author gets excess credit and so then there's this stuff about should we randomize it and one of my fears about randomizing it is like so randomly Sandy gets her name put a second author are people going to be more likely to think that it wasn't random because you're a woman when you get randomized to the back so I think it's just like we don't know what to do but people are definitely talking about the fact that we need to think about what to do we could I guess line it up by order of contribution but it's actually not how economists work with each other I would find it hard to work on a paper where someone would be like I'm going to be the 30% and you're going to be the 70% like economists basically are like I'm going to be the 100% and you're going to be the 100% so the research that's being referred to showed that when it comes to tenure time when women are with men men that counts towards men's tenure and it tends not to count towards women's tenure just when you look at the probability of somebody getting tenure against their number of publications if a woman co-authors with men it tends to get under counted just if you look in the numbers like who actually ends up in tenure so I was at a conference recently with the author Heather Sarsons of this work was talking about it and yeah what do we do about it how do we fix it her tracing back where she thought she was coming from it seemed in part it was that women were less likely to be presenting the work at conferences and seminars and that's where a lot of us start to attribute whose work it is so you see somebody give the work and you decide it's their work so it came back to if you are somebody who organizes seminars organizes conferences to make sure that the female author is out there and presenting the work quantitatively that's at least part of the explanation that she came across but it's also part of the fact that you ask I've seen this I've witnessed it in many faculty meetings where it's a woman and she has co-authors that ask about well the co-authors are senior more senior than her should we be worried about this and somehow you see a guy in the exact same situation and they don't ask the question so I shout it down now just every time like you know people our profession is full of people who write co-authored papers I don't think we should be having that conversation because I do I mean it's that implicit bias it's that it comes up when it's women and it doesn't come up when it's men and I think part of the problem is that there are too few women in the room when they're having that tenured conversation because the number of tenured women is much lower so that's not my favorite thing is that there are guys who get tenured letters that say he's much better than his papers no woman's ever gotten that tenured letter that says she's much better than her papers it's usually she's much worse than her papers the example from Dr. Black about having to recommend a halt to the ban on the box because of research was very interesting do you have any other examples of when this happened gosh I thought that was such a good one do I need more than one I know I need to think I can't think of one I think public policy and engaging in public policy as a researcher as an advocate is much more about stopping dumb things than promulgating smart things than people tend to think so a lot of the biggest successes I can think of is stopping something really horrible from happening so you got but it's usually not something where there's like a ton of ambiguity and then the research helps you it's sort of helping them solve the problem but I'll give you an example so I said we used the research to justify raising the minimum wage for federal contractors to 10-10 but the president had this weird relationship with the minimum wage which was he decided in 2011 that he was going to support an increase in the minimum wage to like was it 9.50? 9.25 and he announced it in the state of the union and then the congressional democrats were like you are weak progressive we are going to 10-10 buddy and he's like great now I got a misalignment between me and the congressional democrats and then there was like lots and lots and lots and lots and lots and lots of debate about whether you should come up to 10-10 and we did tons of analysis and decided that 10-10 was still really in the range particularly because if you wait long enough inflation helps you so that these numbers get closer together because we're always talking about it in nominal terms so you wait it out and then it's a smaller number the DC trick keep the level the same and we'll move it further back and then inflation adjusted it'll be different so we look at it and we're like well it's still in the range where there's very small negative employment effects so he comes he supports 10-10 and then two more years pass and now it's like 2015 and congressional democrats have decided that they are done with 10-10 and they want to go to 13 and then they come to us and they're like well should the president go to 13 you know how painful it is when he's in a different place than the congressional democrats and I looked at their research and I said 13 if he wants but don't ask me to say there's going to be no negative employment effects because if he goes to 13 either like you don't want me talking at all to the press or understand that I'm going to say there are benefits, lots of people will get raises but some people will lose their job according to the research and that's just because once we get into a big enough real wage increase where we get that sort of deep into the distribution there really isn't any evidence that you wouldn't see no employment effects and there is some evidence that you would see employment effects and so we had to say well this is what we would say and that was respected, like that was taken as here's one of our limitations if the president comes out for a higher minimum wage the economic team cannot say there will be no negative employment effects may one more question great so as part of the council of economic advisors you probably had to learn about a lot of topics that were sort of outside of your specialty area so was there anything you learned that really surprised you or changed your mind about something so when I was there as I said one of the pressing issues at the end of the administration I think was trying to figure out why wages didn't come up so every time the job numbers came out and they were usually really good but wages weren't going up and why when unemployment is so low do we not see wages going up and so there had been research on this idea of market power that affects workers and I got more into that research and kind of realized and now you see a number of papers that have come out recently showing that firms have market power when hiring workers that that relates to wages which kind of makes sense but I'd always kind of lived in the land of perfect competition in my head like that was my default thinking and while I was there I really started thinking I don't know why that's my default except that that's like the ECOM 101 framework that we were taught and we don't really think that's true that if wages go down by five cents in this firm I'm going to leave and go to another firm that doesn't really make sense so I think that was something that I wasn't aware it wasn't new to everyone but to me it was something that I was thinking about something that I didn't think about in my day-to-day academic life which is kind of what's going on with wages today but trying to bring what economics could say to it and it changed the way I thought about things so I guess one thing I should say is it was hard it was really hard at CEA it was really hard really really hard so one thing I learned is in some countries they don't have a firm academia for short spells the way we do in the US and there were often people who thought it's kind of weird because it wouldn't be better to have only sort of career people who do this all the time making all these decisions and I thought it was actually really important that at my most frustrated moments I would be like I'm just going to pack up my ball and bat and go home because I had a home to go to and I would like calm down and I would put my ball and bat down and I would get back to doing the hard things that were really really hard to do and so one thing I learned is there is something to bringing in people who have outside perspectives who are really knowledgeable about specific areas and then ask them to work really really hard on stuff that they've never really done before because I learned things every day I was asked questions and told to come up with an answer for you guys who are public policy students in five minutes I get a call from the chief of staff I need a memo from you on this thing that you know nothing about in the next like three hours and I call my staff and be like okay everybody here, Hubble, who knows about this nobody, who can read about it the fastest exactly and they're like you start writing the memo but I don't know what to write just start writing the memo so it was really hard because you were learning a lot of a lot of stuff all the time so it's hard to pinpoint one thing but I think the thing you already said which was God I had to learn a lot of macro I learned a lot of macro and a lot of corporate tax so I think at the beginning I said like Jason was like I'm gonna be the corporate tax guy business tax reform kept getting put aside and then it looked there was a point in the Obama administration where it looked like it was gonna pass Jason was on paternity leave and I was the acting CEA chair and he calls me like you're gonna do business tax reform and I'm like I'm not gonna do business tax reform and he's like I'm coming back from a paternity leave and I was like you can't do that you can't do that, that would be awful and so I yeah I learned a lot about business tax reform and I think Jason and I ended up writing a piece on business tax reform about a year before the tax bill and I think what we said was as long as tax reform isn't used as an excuse to transfer lots of money to the top end of the income distribution it's worth doing good thing they read that on that note thank you very much for sharing your time with us and your experiences we learned a lot and I thank them for their time and their thoughts thank you