Jason Furman on the Threat of Inflation, Prospects for the Economy, and Turmoil in the Banking Sector

Conversations with Bill Kristol

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🗓️ 22 March 2023

⏱️ 61 minutes

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Summary

How serious a threat to the economy is the current turmoil in the banking sector? What are the prospects for a soft landing—or more turbulence ahead? How should we think about the challenge of combating inflation? To discuss these questions, we are joined by Harvard economist Jason Furman, who was deputy directory of the National Economic Council during the Financial Crisis and then served as Chairman of the Council of Economic Advisers in President Obama’s second term. In this Conversation, Furman shares his candid assessment of the current challenges in the macroeconomy: Unless you have [a] soft landing, which I think is unlikely, there’s a recession out there. I used to think the recession was more second half of this year or first half of next year. The banking crisis may move that forward, he says. Yet Furman explains how dynamic is the situation, and lays out several plausible scenarios as well as his views on the key indicators to look for in the months ahead. Furman also reflects on the American economy more broadly, and shares his perspective on the future of inflation and interest rates, debt and deficits, productivity, and immigration.

Transcript

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0:00.0	Hi, I'm Bill Crystal. Welcome back to Conversations. I'm very pleased to be joined today by Jason
0:20.4	Ferman, a long career of public service as an economist, and more broadly, a public policy practitioner,
0:28.0	with a broad perspective, served in the Clinton administration, and then Deputy Director of the
0:32.8	National Economic Council for President Obama at the height of the financial crisis, or I guess
0:37.6	at the height of at least getting us out of the financial crisis, but it was also, I think you
0:40.8	were also an advisor for candidate Obama in 2008 at the height of the crisis, and then chairman of
0:46.1	the Council of Economic Advisors in the second President Obama's second term, and much more
0:51.8	important than all of that, of course, now teaching EC10, economics 10, the huge introductory course
0:57.7	at Harvard, which you have many, many impressive predecessors who taught that, and I guess it's
1:03.2	become wildly popular, is it like half of Harvard takes the course or something? Yeah, we have about
1:07.6	half the students in the class, and I think everyone should know economics, so we're going for all of them.
1:12.8	That's good. You have to talk to you sometime about all the young, economic,
1:16.4	young Harvard graduates, I'd be here in DC, maybe they're the ones who skipped the course, though,
1:20.7	you know, that anyways. It's great to have you, Jason, and thanks for taking the time to join us,
1:26.7	and let's just get right to it, just for the record, it's March 21st, so in case something changes
1:32.2	radically in the next day or weeks or months, how could that happen, just so people know when we're
1:36.9	talking, and I want to talk more broadly, obviously, about where we are, you know, in the perspective
1:44.2	of the last few years, or even a few decades, and where we're going, but we can't, I think,
1:48.9	cannot begin with a current little crisis we're having, a little financial crisis, banking crisis,
1:54.8	so let's say it weren't about that, is it a little blip, or is it a big deal, or where in between
2:00.3	of those? What's behind it? It's always hard to tell in the middle of these things.
2:09.0	It's happened much faster than the last financial crisis. It's spread from one tiny bank to one much
	...

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