The Washington Examiner interviewed Tyler Goodspeed, the new acting chairman of the Council of Economic Advisers, after the unexpected departure of acting Chairman Tomas Philipson and senior economist Kevin Hassett in the past few weeks. The Council of Economic Advisers is a policy committee that plays a central role in the White House’s response to the coronavirus-related economic downturn.
Goodspeed, 35, is a Harvard-trained economist who joined the council in 2017 as a senior economist before eventually becoming a full member. He’s expected to stay in the role and lead the council at least until the end of the 2020 presidential election. During his time with the council, Goodspeed has focused on proposals and analyses, such as economic modeling related to the coronavirus lockdowns, how to deal with rising student loan debt, a digital services tax, and plans for further middle-class tax cuts.
Prior to joining the Trump administration, Goodspeed taught economics at the University of Oxford and at King’s College London.
Washington Examiner: How would you describe your approach to economics in a philosophical sense? Are you a Keynesian like your Ph.D. adviser Ben Friedman from Harvard?
Tyler Goodspeed: I describe myself as an applied microeconomics person. I wouldn’t describe myself as a Keynesian, although Ben and I are very close. You know, I am often reminded, especially in the middle of a crisis, of the words of the great Bob Lucas, the Nobel laureate who once suggested that we’re all Keynesian in the foxhole. [Stated in a joking manner]
Washington Examiner: Where do you lie on the kind of free market versus nationalist planned economy spectrum when it comes to how our economy should be structured?
Goodspeed: I believe in markets. I am very much a Hayekian in that there’s so much distributed knowledge in society information that is discreetly held. And very few mechanisms can convey that discreetly held information in as efficient a way as the price mechanism.
Washington Examiner: What is a part of Trump’s agenda that you think is important or that you’d like to work on?
Goodspeed: A big part of the president’s agenda that I really respect and appreciate, as an economist, is his approach to trade because at the end of the day, the People’s Republic of China is not a market economy. The U.S. economy loses up to $300 billion a year in intellectual property theft due to the People’s Republic of China. Now, that alone strikes me as a very big number. But, you know, if you think of that as a perpetual reverse annuity, their real discount rate right now is about 3%, 300 billion divided by 0.03. That’s a big number. That’s $10 trillion right there. So, I think this is a really big problem, and it’s a problem that’s only getting bigger because intellectual property is only about 10% of U.S. capital stock, but it’s a third of U.S. investment. So, this is only going to get more important over time. And I think we had asked ourselves the question with respect to the People’s Republic of China, “If not now, then when?”
Washington Examiner: “If not now, then when?” That sounds just like what congressman John Lewis has asked many times when it comes to civil rights, correct?
Goodspeed: Yes.
Washington Examiner: Why do you think the president’s lead in polls regarding the economy have tanked in the past couple weeks, and what do you think he needs to be doing to get back on track?
Goodspeed: I don’t follow polls too closely. It’s not really my job. My job is to continue to monitor the strength of the recovery that’s underway and also the policies that we’ve undertaken to support that and the policies that we’re looking to undertake moving forward.
Washington Examiner: I’m curious, philosophically, whether you agree with a lot of economists who have said that the response to the virus is directly tied to our economic recovery and that we cannot have economic prosperity without conquering and solving the virus.
Goodspeed: Well, let’s take the limit or example in which the hypothetical state of a world is one in which there were no vaccine. I mean, I don’t think that that’s the likely hypothetical state of the world. But let’s just take that as the limit. The economy would have to eventually adapt and adjust and return to full employment. So, I think, markets adapt and learn how to adjust to shocks. This is a big shock, and we would very much prefer the expeditious arrival of an effective therapeutic vaccine.
Washington Examiner: So, you don’t see them as fundamentally tied, then? You don’t see that the health response as being critical to the economic response?
Goodspeed: Well, absolutely they are tied together. Until we have control of the health situation, it is going to be difficult to achieve a full economic recovery, but we have to adapt one way or another. Moving forward, I think the more we can continue to engage in optimal sorting, the more we can get support or continued recovery in which relatively less vulnerable populations return to work while we continue to shelter and protect relatively more vulnerable populations.
Washington Examiner: What would you like to see come out of the Trump administration and the CEA in the next few months in terms of economic policies and priorities?
Goodspeed: I’d like to see us get back as soon as possible to the state of the economy that prevailed in January 2020. To be honest, I’m very happy with the CEA quietly doing its job within the Executive Office of the President.
Washington Examiner: I know you’re one of the very few openly gay members of the administration. I’d be curious what role that plays in your thought process and as a part of your identity.
Goodspeed: To be honest, it hasn’t come up at all in the workplace environment. It just means that I have a very supportive spouse who appreciates it when I let him know when I’m going to be late for dinner.
