tv Public Affairs Events CSPAN November 4, 2016 9:18am-11:19am EDT
> larry? >> a fair amount of what robert said i agree with. recovery has been very slow since the trough of the recession. the economy is 12 odd percent pe below where you would have predicted on the basis of a trend run through 2007. to put the point differently, if you looked at gdp from 1929 to 1940, and the best estimate of gdp from 2008 to 20 19, on the basis per member of the adult working population, those two figures will have been about the same. over the 11-year period of the depression, and over the 11-year period we have just been through, gdp has behaved about
the same. obviously, it was much more "v" shaped during the depression than it has been during the current episode, going down further and coming up but ending in just about the same place. robert is right, that if you attempt to decompose that slowdown into employment and productivity, it is much more on the productivity side than it is on the employment side. robert places no emphasis on the role of demand in all of this. i do think we have had substantial issues of demand management. there are substantial issues in the world economy of demand
management and there may be substantial issues in prospect in the united states of demand management. the best single way to measure inflation expectation s in my view is by comparing the yield on ten-year nominal securities with the yield on index funds. if you make that comparison and you make an adjustment for the fact that the index bond uses the consumer price index and the fed targets a different price index, the so-called deflator for personal consumption, you get an expectation in the united states that inflation will be below 1.5% for the next 10 years having fallen short of the 2%
target over the lags the 7 years. at the same time, the index bond yield is telling you that real interest rates are at extraordinarily low levels, suggesting in the united states and to even a larger extent for the industrial world as a whole an excess of saving over investment, which is significantly constraining the level of demand and has, in my view, contributed to the relatively weak economic growth over the last 7 years and leaves us with a very serious prospect of problem that historically with 20% probability, economies go into recession in any given year. the normal way of responding is for the fed to cut interest rates by 500 basis points.
there is likely to be a recession long before there is anything like room for the fed to cut interest rates by 500 basis points. i think without denying that there are very large challenges on the productivity side, that there are also substantial issues on the demand side as reflected in what's happening to gdp. what is to be done? it seems to me that it is not hugely plausible to argue that the united states has had a major deterioration in its leakle institutions over the last 8 to 10 years. the argument that somehow that has been a period of crushing and unprecedented burdens on
business from regulation does need to confront the observations that corporate profits as a share of income are at near record highs and the related observation that the stock market has tripled during the period when it was thought that these burdens were imposed. but it seems to me that the logic from both the supply side and the demand side points to o the promotion of investment in the public and private sector as central priorities going forward. i would just emphasize that if seems bizarre at a moment when borrowing costs have never been lower, materials costs are very low, 15% of men between the ages of 25 and 54 are not working,
that the nation has its lowest rate of infrastructure investment in two generations measured relative to gdp. so it seems to me enormously in our interest to increase the quantity of infrastructure investment and at the same time to engage a set of reforms directed at improving the project selection, the efficiency of procurement and the streamlining and execution of those infrastructure investments. it also seems to me that there is a case eachen without believing that regulation is central to understanding the
produck difficulty slowdown to looking at what can be done to encourage increased private investment and there i would cite as a priority corporate tax reform ans perhaps you will indulge me in an analogy i have used before. imagine you were running a library. you might decide that it was a good idea to give it amnesty so that people who had overdue books would bring them back quickly. you might decide that was a bad idea so you should tell people you will never have amnesty and they better bring back their books, because, otherwise, the fines will accumulate but only a fool would put a sign on the library door saying, no amnesty now but we are thinking of one next month.
now think about a nation whose corporations have $2.5 billion of cash abroad and have to pay to bring the cash back into the united states who tell those corporations there is no amnesty now but we are having a tax reform debate and we might have one next year. it is hard to imagine a better capital repulsion strategy than that. surely, bringing clarity to the corporate tax reform debate and resolution from my perspective best done through a significantly broader base, a significantly lower tax rate, neutral taxation between foreign income and income repatriated and greater international
cooperation on various forms of profit shifting but in some way bringing clarity and resolution to the corporate tax form debate seems to me the single most important thing we could do to encourage private investment. i agree with robert on the importance of productivity. i foe quus on public and private investment, because those are things that i am pretty confident are important and i am pretty confident we can effect. there is a great deal in productivity where the interconnections are puzzling. i would frame one aspect of his comments slightly differently than he did. although i would be surprised if he disagreed a lot. that is, i would say i think the evidence is overwhelming that
productivity is undercounted. leave aside information, leave aside information technology and just think about statens or other pharmaceuticals that have huge impacts on life expectancy and where we reflect almost no productivity improvement. from the point of view of economic policy, it barely matters. most of the things we are discussing it barely matters if productivity has been constantly understated by a constant 1.5 to 2%. the interesting thing is if the magnitude of underestimate has increased and there i think a fair-minded person has to be much more agnostic in assessing the tay ta. ago nosty sichl about whether the underestimate has been
increased should not be confused with agnosticism about whether there is currently an underestimate. >> to all of those of you watching online, you can send us questions. we would love to hear from you. go on line to sli.do and enter aei event. you enter your name and type the question and if you are lucky, i will actually figure out how to use this technology and get around to asking it. before that happens, i'm going to ask a few questions of my own. i want to zero in on a poibt that made, robert, which is incon tro vertable, the productivity situation. what i think is interesting, this is not a purely united states phenomenon. it is actually a global phenomenon. when the imf looked back at their forecast, they found their output forecast for most of the developed countries had systematically been overestimated. growth has been weaker. their employment forecast was badly underestimated. if you look at the u.k., which
has outperformed every other country on employment and underperformed on gdp. we know that as an accounting matter, this tells us that produck difficulty is a problem. we don't know why. there ace healthy debate about whether it is a demand problem or a supply problem. we know capital investment has been weak and that ar rit matt particularly reduces labor productivity. it begin to slow before the recession. i would like to hear both of you weigh in on whether you think the productivity story is a demand problem or a supply problem. >> it is the pattern that makes me deemphasize the role of aggregate command. you have this pattern where gdp has been underperforming and the labor market is pretty good, including unemployment growth. that is not the typical response of the economy we would get in
insufficient aggregate demand. you wouldn't get that behavior typically in the labor market, at least not in the models that i am familiar with. i used to work in this area but not so much recently that's the pattern that motivates me to think what matters for productivity. that's where i end up emphasizing supply side policies as you described. it could be, of course, as you suggest, some of it can be working through investment and there are some recent papers that try to break out the trend in labor productivity and how much of it is related to reduced capital formation and other forces. reduced capital formation seems to play some role but not quantitatively that large. so i don't think it is the main part of the story. then, we are left with a lot of other things that have been proposed, some of which larry debunked that might matter for productivity growth. i also agree completely with what he said about measurement error.
the case for the existence of measurement error is much stronger than the case that the measurement error problem has expanded. people talk about the iphone claim na it has become much more of a serious issue than it used to be. i am kind of agnostic about whether that is true. i aim little sensitive about what he mentioned about statens. i have had this on going argument with my doctor about whether i sh be taking a staten. they have some stupid formula to use. the completely dominant formula is how old you are. if you get beyond a certain age, it is always going to say take it. i was forced to do t i am kind of irritated about that. larry, what do you think? demand or supply, why is productivity so weak? >> you have to explain to me why the formula is stupid. it seems kind of sensible to me.
what i have said about secular stagnation has emphasized the demand side. i don't want to be heard as suggesting there isn't some mystery on the supply side as well. incompetent think there is a fair amount of evidence that there is a kind of inverses law that applies where lack of demand decratdede manned creates over time lack of supply. robert is right, you can explain something but not everything and not most by looking at reductions in capital investment. i think it is more difficult to think about a range of things that firms may cut during
recessions. rnd, development of, development of reorganizations and the like. that represent a kind of unmeasured investment and are sacrificed during periods of invest, during periods of downturn. i think i would be a bit more inclined to attribute more of the productivity shortfall to the consequences of the downturn on the demand side than robert is but i would agree with him that there is a puzzling pattern of surprisingly weak productivity growth which has odd concomitants.
if i told you just in the abstract that productivity was going to slow down for an unexplained, odd reason but you didn't know what it was, i think you would be inclined to expect that what you would see at the same time would be some tendency toward higher prices as lower productivity growth raised business labor costs relative to the path you expected. so you would expect to see inflation surprising on the high side. i think you might also expect to see profit margins squeezed a bit. there is something odd about a productivity slowdown that goes with disinflation and goes with a significant increase in
capitals share. those -- the disinflation in particular leads me to think a little more about the demand side. after all, it is the oldest bit of economic reasoning that when the quantity of apples goes down, and you are trying to figure out whether it is demand or supply, you look at what happens to the price. if the quantity of apples goes doub and the price goes down, you tend to think something is going on on the demand side rather than on the supply side. you also have the puzzle of rising profitability. two ideas that haven't been mentioned yet and are out there in the discussion that may be relevant to all of this, although i don't think the
evidence is overwhelming is well short of overwhelming on either, are the possibility that the level of monopoly power has increased in the economy, which would account for a rising profit share, would account for some inhibition in the willingness to invest and might, because of output restriction contribute to and reduction in competitive pressure contribute to a slowdown in productivity. that's one hypothesis that is worth exploring. the other thing i think is worth exploring for which there is substantial anecdotal evidence including, i have to confess from my own behavior, which is that one aspect of the internet is that the people at work spend
less time working and more time being distracted. if, in effect, we are now mismeasuring hours at work because there are more hours at leisure that are called hours at work, it would tend to explain robert's anomaly of employment strong and roe duck matt tift weak. there are people who whatever one thinks about this, the bits of anecdotal data from people who monitor during the day use of face time and the like from
employer domains, that type of information is fairly supportive of this type of hypothesis. >> larry has mentioned a couple times this pattern where you see low inflation, low interest rates, weak investment, private investment. my conjecture, i'm not certain about this, is that the common source of all these things is the idea of elevated disaster risk. and that that was particularly reinforced by the great recession, 2008-2009. what that would do, of course, is dramatically lower the real rate on safe assets, because there would be this flight quality kind of idea.
it can explain low inflation despite dramatic monetary because of the inability to hold safe assets, excess reserves at the federal reserve and go along with weak investment. even though the cost of credit looks low in terms of real interest rates, the underlying force can which is that higher disaster risk, would shift back investment demand. he my con jek jek yur is that that is a key element. >> all views have anomalies. i don't want to be completely dismissive of robert's view but i think a difficulty with that line of thought it seems to me is the robustness of the stock market and the fact that you have a fairly direct measure of
this, which is the price of out of the money puts, which are exactly a direct insurance policy on these things. it would be more like write to stay that that price is abnormally low than it would be to say that price is abnormally high. in certain periods. what would convince me that you were right would be some evidence that the price of buying a security where you where essentially you can price the following on a financial market. i give you "x" today and give me $1,000 if within the next three
months the dow jones average has fallen by more than 5,000 points or fallen by more than 30%. it's my understanding that you could not make the case that there has been a dramatic increase in that price and certainly over the six years, six or seven years since 2009 and 2010 that price has dramatically declined. i think it is difficult to make that case as a -- particularly difficult to make that case in explaining anything that has changed between 2010 and 2016. >> so i'm really sympathetic with that argument. i am doing a lot of research exactly along the lines that larry just gave. the price that he is talking about peak tded dramatically in
2009 and has come back up a bit from where the bottom was, in between there. that force is exactly why i am hesitant about pushing it. >> let's do it the other way. if things were terrific, if we had had a terrific seven years, you would be explaining that unlikely disasters look phenomenally likely in 2009 and 2010. and that the brord trend was it to be way down from 2009 and 2010. >> i am sympathetic with that actually. i am hesitating about pushing this line. that, i think, is the major discrepancy is what you just highlighted. >> i want to stay on the supply/demand issue for a little while. robert, you insisted that you should take statens. the rest of us should say great, because it has kept you active and productive. that is not for the entire
world. one of the supply factors is demographics. in it 2008, lehman failed and the first baby boomers started collecting social security. this is another thing you see across the entire world. it probably can't explain the synchronized nature of the slowness of output demand is that populations are aging everywhere. you get declining labor force growths and there are changes. companies are probably less likely to invest if their customer base is shrinking over time and if their work force is shrinking over time. yesterday, you were citing this working paper. the trend of the neutral interest rate since 1980. it is a pretty persuasive little bit of evidence. is there much that we can do as a policy measure to change that other than to go out and tell people to have more children and wait for 30 years. >> let me just clarify what the
effects of dem oggraphy are. i think the things i am about to say, the things i am about to say about policy, robert which, i suspect, not agree with. i think he will agree with these analytical observe vations. if the population gross less rapidly, the labor force grows less rapidly and so output grows less rapidly. there is an easy way to take account of that, to look at per capita output. i think robert and i both did that in the statistics we cited and productivity growth has been slow. the second observation is the reason societies invest is in order to -- is in significant part to provide capital for new workers and to provide housing for new families. so if the growth rate of new workers and new families slows, then one would expect the share of gdp devoted to investment to
decline and that has happened. i think demography is a significant part of the reason why. that is, i think a significant part of the explanation for why real interest rates are solo l and part of the reason why people who look at the interest rates and say they are extraordinarily low by historical standard, therefore, policy is highly expansion nary are making a mistake because relative to the proper benchmark, policy is not so expansionary. a substantial part of what we have been emphasizing is that productivity defined as output per bit of labor and capital has declined substantially. there is no obvious and natural
reason why productivity should go down just because the labor force is growing less rapidly. if anything, when the labor force grows less rapidly, you might expect some tendency toward increased capital tendency, which would lead to a higher growth rate in productivity. i think invoking dem oggraphy as an explanation for slow productivity growth actually is not terribly plausible idea, at least from the point of view of economic theories. i do think we would be better off with more rapid gdp growth coming from a more rapid growth in the effective labor force. i think there are things that
can be done that effect that. i do support more generous and expanded family leave policies. i believe they are likely to raise labor force participation and that is likely to lead to more rapid growth in the labor force. it seems to me there is a fairly clear market failure as to why the market will not in and of itself generate enough of that, which is that if i'm the employer who competes by offering the best family leave policy, i will be the employer who gets the most people who take advantage of my family leave policy and so, therefore, everybody can benefit from everyone offering family leave but any one firm who innovates is strongly disincentiveized.
i also think there is a quite strong case for immigration reform which de reform which done in reasonable expand the growth of the labor force and particularly if done in ways that affected high skilled workers. would i offer the prospect of entrepreneurship that would bring some increases in productivity. >> robert whar, what do you thi? >> i agree with your important observation that the productivity slowdown is something that is common across a group of countries. that certainly pushes you in the direction of saying your explanations for this phenomenon should be something that works in common across the countries rather than being country specific. one thing that pushes you toward it is this view of technological
progress, growth rate is weaker than it had been. that is certainly something that effects the countries in common. i agree with larry that the sort of tendency toward diminishing growth is not a promising factor. in fact, it's well-known that diminishing fertility rates, which had been quite pronounced, are a source of positive per capita gdp growth. that's confirmed empierrickly. it might be the case that age structured going up and more retired people can be a drag, although i've never been able to find empirical evidence for that across countries. that part maybe. the fertility should go the opposite direction. i wanted to say something briefly about public infrastructure investment, which larry said before. i'm basically sympathetic to that if one can concentrate on things that enhance productivity. if you want to do something like building a bridge or highway,
you have to think about what does that do to productivity. you wouldn't focus on the sort of jobs program aspects of these projects. you wouldn't be focusing on the expenditure side, contribute to aggregate demand, you'd be focusing on productivity enhancing effect after infrastructure was in place. that's when it would be expected to actually matter. something that makes me skeptical about the potential for this is what i understand about the experience of japan. i think they have had a tremendous increase in infrastructure investment over the louisiana couple of decades. it certainly has not helped economic performance, including economic growth. i was also told that basically they have gone so far in terms of infrastructure investment that the marginal return is probably negative, so not a good model for u.s. to follow. >> i want to pick up on that with you. you've been very emphatic doing more public infrastructure investments is kind of a
no-brainer. i think it's an issue which there isn't a lot of partisan disagreement. both presidential candidates want to do more on infrastructure. my question to you, can it move the needle on the problems we've been discussing here. you said we're 12% below gdp right now. public infrastructure is 2% of gdp, something like that. how much would you really have to spend to change that matter. as a practical matter you've written about the bridge over charles river hundreds of millions over budget. it's very hard to do infrastructure efficiently and quickly. what do you say to those two problems, magnitude and logistics make it difficult solution to this that we talked about. >> first, i'd like to say there's a very substantial amount of maintenance investment that almost certainly has a high payoff. i think there is a tendency when
people talk about infrastructure to envision mega projects of one kind or other, complex public, private partnerships and the like. i think the evidence is most compelling on the desire ability of maintaining infrastructure we have. i agree with robert, i don't think it's either-or between creating jobs and raising demand and doing things that are efficient in terms of augmenting the economies capacity. i don't know why you have to choose between those two things. i do agree completely the right focus in choosing projects should be the ones with economic benefits. my read is the highest payoff stuff, much of the highest payoff stuff involves maintenance. who knows whether their estimate
is precisely right, but the american society of civil engineers estimates the average american pace the equivalent of $0.70 gallon gasoline tax in extra repairs on their car because of unnecessary potholes in american roads -- in american roads and highways. i also think there's another argument that needs to be factored into the infrastructure discussion particularly when you talk -- particularly when you talk about maintenance. that is that we measure the national debt. we do not measure national deferred maintenance liability. both are burdens that this generation are placing on our children. i would argue at current interest rates, the cost of
deferred maintenance compounds substantially more rapidly than the cost of paper debt. so eastbound apart from any economic benefits in the form of higher gdp, dimpsimply doing th deferred maintenance more promptly is a good thing. is a reasonable program of infrastructure investment going to be the silver bullet that eliminates 12% gdp gap? no. i think it would be a very ambitious target for growth policy to raise the growth rate of the economy by 1% from its current level. if you raised the growth rate of the economy by 1%, it would obviously take a substantial time to fill any gap.
i think infrastructure investment is best viewed as one important component of a program that might have that aspiration. but i don't think there are silver bullets that all of a sudden add 12% to the gdp, so i think the right task is to try to find strategies and -- strategies that will generate benefits and increase the growth rate. i do think it's a little bit misleading also to frame the debate entirely in terms of the g gdp. when i putter around doing the things i do on saturday, my life is better if there's less congestion and i can get where i'm going faster, but that
benefit doesn't show up in the gdp, but that doesn't make it less real. so i think i would want to frame the argument for infrastructure in terms of carefully constructed cross-benefit analysis rather than in terms of benefits just as measured in the gdp. >> larry, i would say just in personal observation, i've noticed that your output on the issue goes up dramatically after you have a flight that passes through jfk. there actually might be a case -- probably worse in the other direction. that said, how would you respond to it? >> first, i'm glad larry and i can agree fixing potholes is the most productive activity in government. i mean, more generally the question of deferred maintenance is the idea that when you think about the government debt and people obvious supplemented that to think about payment on
pensions you'd also want to include there the value of the public capital stock which would have to be properly depreciated. the deferred maintenance would be part of that general framework looking at a net position in terms of what the government owns and what it owes. i can't resist saying something about what larry said earlier about amnesty because he missed the obvious optimal amnesty program with respect to library. the obvious amnesty thing you announce bricking in illegally held books, you'll not be punished and not pay any fines. then after people bring it in, you're supposed to say, i was only kidding. in fact, you have to pay the full amount. that accomplishes two things. you get the revenue and also you provide credibility that they are not going to do this again. so it's actually the optimal amnesty program. >> robert, you're dating your self. if memory serves, which i think
it does, it was 28 years ago that you published that idea in the "wall street journal." >> i think most people didn't notice or had forgotten. >> i don't know if this is a more recent idea, robert, but you recently observed 45 minutes ago that no great idea was ever come up with by somebody wearing a tie, so i'm actually tempted to take my tie off. >> likewise. >> my question right now, certainly goes to the idea anything we can do to generate more ideas is probably unambiguously positive thing. nobody has come up with a formula for that. certainly in the area of policy you want to do things that sustain risk taking and idea creation rather than restrain it. i think this is where the debate over regulation often comes in. it's not so much the cost benefit, we have to pay more to fill out these forms, you sometimes wonder whether regulation discourages risk taking. if innovation is really about yields, you know, only 5% of
good ideas produce a good outcome, you basically want to do whatever you can to raise the denominator so you get more good ideas. you certainly hear -- certainly i hear this all the time from business folks, in big business and small business, that the burden on risk taking has grown in the last six or seven years. you can see a lot of areas but perhaps nowhere more profoundly than financial area. to go to your point, fear of economic disaster puts a very high premium on avoiding any sort of rick taking that could lead to another. is that a problem? is that part of the explanation going on here? can we do something to fix that. >> i need to sort out two differ things. job whether there's a problem of unicorns or not. there's certainly a lot of people who think there are. every fifth harvard student who
comes into my office has some kind of idea to start a startup of some kind. you look out at what's happening in the financial technology sector and there are literally thousands of firms trying to innovate in one source or other of financing. so the idea that defining feature -- defining -- importantly defining problem of the american economy is that people can't start companies based on new ideas seems to me to be at the edge of absurd. i said 15 years ago that a great strength of the united states was that it was the only country in the world where you could raise your first $100 million before you bought your first suit. and it seems to me that that is more true today than it was when
i said it 15 years ago. i detect no evidence that that has been crushed by regulation. if anything, i think that there's a real question of whether some of the what holds it's self out as technological innovation is kind of a regulatory arbitrage because we're doing things in the silicon valley way. we're not covered by traditional laws and the advantage comes more from the regulatory arbitrage than it does from the -- than it does from technological innovation. there is a different question about what the in exhibitions are or aren't on big banks contemplating big syndicated loans and the like. but it seems to me that in terms
of entrepreneurial fundamental technological innovation, i find the argument that that's being crushed by regulation to be a very difficult one to see any evidence for. >> in terms of incentives for risk taking-type investments, i think there are two important forces that come into play there. one is kind of standard property rights issues which brings in the role of patents, taxes on success, those kind of standard issues. with regard to patents, there is a standard tradeoff understood at least going back to thomas jefferson. there's an advantage rewarding people that come up with new ideas. once they are there, you want to have them freely accessible. there is a tradeoff there. the other force which i think
has become much more prominent recently has to do with scale. so the kinds of activities that larry was referring to, if you're successful with something like facebook, the scale in which you can use that is so much bigger than things used to be. that, of course, is going to go the opposite direction in terms of motivating more risk taking activity compared with the in exhibitions that might relate to things like regulations, taxes, lack of patent protection. so i think you see a lot of risk taking activity that are prominent now because of the scale phenomenon that basically there's a fixed cost of figuring something out but then you can operate in terms of almost an arbitrary scale. that can, of course, produce great rewards. >> this has been great. i have lots of questions but i'd like to bring some of you into it. if you put your hand up i'll try
to get to you. for those online, your question may or may not show up here. start with you, sir. state your name and your affiliation. >> doug carr with carr capital. dr. summers, you talked about the importance of investment for stimulating growth and increases in productivity. but since we went off bretton woods, the old model that i was taught of accelerator modifier government invests money, stimulates economy. that's reverse, both secular as well as cyclical. similarly government deficits strongly negatively correlateed with enforcement. ultralow interest rates strongly
correlated with negative investment. now in the u.s. when we're ostensibly near full employment. >> is there a question here? >> how do you stimulate demand? >> it's for you. >> how do you stimulate demand and investment with all these tools -- >> i wouldn't subscribe -- i think there's a substantial part of your analysis suggesting all these things are negatively correlated with investment i don't think has the causal significance that you attach to it. it will be generally found in the presence of more oncologists there's more cancer but that is not usually taken as evidence that oncologists cause cancer. in the same way interest deficits lowered, investments at
times economy is weak, to enfer lower interest rates and budget deficits are necessarily causes of low investment. so i think that relatively standard economics involving a role for the multiplier, involving recognition that investment is sensitive to costs of capital continues to be the right way to k about economic policy towards investment. at other points i would have found it highly plausible, as i did, for example, advising president clinton in 1993 to believe that high capital costs associated with budget deficits and perspective, budget deficits were a significant impediment to investment and that fiscal restraint, which reduced those costs could contribute to lower capital costs and contribute to increased investment. i think that was a plausible view in 1993 and plausible view
in many places and many times. at the current moment when ten-year real interest rate is zero, and price earnings ratios are at extraordinarily high levels, very high levels -- not extraordinarily high levels, very high levels, by historical standards, i don't find that line of thought to be particularly compelling as a way to understand fluctuations in investment going forward. >> yes. over there. >> bonnie, i'm in the investment business. this is to some extent a variation on this question. that link that mr. summers doesn't see i think is provided by alan greenspan on the subject of confidence. you mention simpson-bowles, and that's why i'm addressing this
to you. i think what greenspan would say, if you look at the lack of investment, it's all in long-term assets, not the stock market which is perceived as a short-term investment. long-term investment. then he says when you look at the situation with the budget deficit and projected budget deficits, which are an order of magnitude higher than they have ever been before and are really pretty scary, put those together it's very difficult to have confidence in the future to make long-term investments. maybe we should be flipping this argument around. if we can fix that long-term problem, it might help with productivity and growth. i'm wondering, i know it's all politically impact. is part of the reason why it's politically impossible because economists don't convey the message, yes, we really have to focus on this and do it. >> i agree with that sentiment,
uncertainty about the long-term fiscal situation is probably -- invest me a drag on investment. taxes, entitlement programs in terms of the projection looking unsustainable in terms of the current situation. it's something basically has to give. that was the whole point of the simpson-bowles commission which delivered its report in 2010. i thought they had a lot of sensible ideas, gradual change that tried to cement long-term fiscal situation of the u.s. government. this went back to some packages particularly from the 1980s that had been put in place and went further in some regards eliminating some deductions on the federal income taxes is another example, especially home mortgage interest. it seems every now and then the
government can get to a situation where it has serious discussion of those kind of matters and sometimes delivers results. it hasn't been since 2010. i think that commission report could actually have been implemented if the administration had been interested in it at that point in time. we may get back with that kind of thing. i agree with your implicit argument that's important with respect to investment and other things. >> wait a minute. we've stayed out of politics here pretty well, but you just crossed the line. >> it wasn't much of a line. >> it was. you just crossed the line by blaming the administration on simpson-bowles. let's just be clear that there are three members of the simpson-bowles panel from the house majority. all three opposed the report. it was a nonstarter in the house of representatives that was controlled by the republicans. the one thing that would have made it more of a nonstarter
would have been barack obama's endorsement. barack obama did what made it more likely to happen, which was stay away from it and see if the process could be started later. whatever you think about simpson-bowles, somehow blaming that failure on the administration, when the administration's representatives supported the recommendation and house republicans did not, i think that was unworthy of you. that part of it -- that part of it i think is not fair. >> i think democrats were in charge of congress at this time. i don't understand this argument. >> no, they weren't. >> they weren't. >> they weren't. it came after the 2010 election. >> staying on noncontroversial subjects, i'm going to ask, we have question about corporate
tax reform from the online audience. i think it's pretty important because once again thinking about the next president's term, it does seem to be one area of common ground between democrats and republicans. although getting there is obviously the challenge. the question is how much growth would come from tax reform it's self versus resolving the uncertainty that surrounds the corporate tax system. >> i think both matter. i think the uncertainty has a certain tendency until i know what the rules are, i'm not going to make my investment plan. so i think bringing clarity to the subject would make a positive contribution, particularly on the aspect that i referred to in terms of the return of foreign capital. obviously bringing better clarity to it will produce results that are better with a better package than with a less good package.
i think there is -- i'm going to show you something very important thinking about what may happen over the next nine months. i think there is a rather -- i am for, as i made very clear, both infrastructure investment and corporate tax reform. there are many people saying those two things could be twin, they are good, like infrastructure and republicans like tax reform. businesses like corporate tax reform and corporate tax reform will pay for infrastructure. there is -- there are some laws of arithmetic that are constraining here which are the kinds of corporate tax reform businesses like tend to be corporate tax reforms that mean the business pays less. just kind of the way the world is.
tax reforms where business pays less are likely to be tax reforms that need to be paid for rather than tax reforms that pay for other things. so the idea you can do a tax reform which both in a genuine sense improves the government's budget position and provides money to pay for a new spending priority, and makes business better off, there is a real arithmetic problem there that is underappreciated by many of the trib u.n. unes of bipartisan agt people want to square the circle with a kind of budget trick, which is we'll only count the revenue in the short run and
we'll do something where business pays more in in the short run but gets promised long run benefits whose impact on the government budget we won't take account of in our calculations. that's one way. that's one way of squaring things. but i think it will be somewhat more difficult to both genuinely pay for infrastructure and give business what it's hoping for in terms of the reduction in the amount they pay than a fair amount of the commentary suggests. >> in terms of simpson-bowles in particular, i think the central idea is we were already in trouble with entitlement spending in terms of the project shrubs and then we're trying to do things with revenue that are in that context. so it's not particularly providing additional moneys for other kinds of programs, which
larry was indicating would have been problematic. in terms of uncertainty versus kind of the overall package and rates, they clearly came together in that kind of context. i'm not sure how to say how much of importance is one piece versus the other, but i think it wasn't an attempt to make the overall package sort of sustaining over a long period in terms of squaring entitlement spending with revenues. but at the same time, i think it was trying to make tax rates for favorable for things like investment, including things on the corporate side and things on individual income tax li eliminating unproductive. >> there was a lot good in simpson-bowles, particularly on the tax reform side. i do want to come back to this, on the tax side it's appealing.
a little while ago, does apply. new buildings are pretty good subs substitutes for old buildings. a new office building competes with an old office building. so if the environment is somehow such that it's discouraging the creation of new office buildings, the environment -- that same environment by the same logic should be reducing the value of old office buildings. if you look at commercial real estate prices now, people are discussing whether they are a bubble. i have no idea whether they are a bubble or are not but commercial real estate prices are not depressed. the greenspan theory that we're not having investment in real estate and structures because of of all the uncertainty has a pretty clear testable
implication, namely that the structures that substitute for new investment, existing structures, should be declining in value or should have seen their value go down or should have their value depressed, or you should be able to see some impact of all of this uncertainty in the value of existing structures. all you have to do is look at reit prices to test that idea and the data go very much in the opposite direction. so i think if you want to make that argument, you at least need some explanation for what's happened to the price of existing assets. >> so do you have a story about why elevated commercial real estate prices would go along with weak private investment? >> yeah. i think that there are a set of
issues around regulation, zoning, rules on land use, difficulty in permitting that would operate in exactly that direction, make it harder to build new structures and that would tend to raise the value of existing structures. i think that line of thought is more plausible than one generalizes uncertainty. >> i think we have time for one more question. yes, you at the very back. >> greetings. first i want to state last week there was two great programs here, one on innovation, plays into the growth aspect and one on infrastructure that i'd recommend everyone to look at. my big question goes back to the issue of underlying growth. how do we get growth when we have a couple issues going on. one, third quarter growth came out at 2.9% i think it is.
overall we may not have 1%. >> time is short. >> but two things that come into play. one we have to look back in 2013 in august. >> question. >> that changed down 3% the price, what is the gross really of that number. also in the pricing, if we have taxes and everything else taking money out, how do we ever get growth if we're only looking at taking the money out of the economy instead of get it into the economy. >> higher taxes with long-term growth outlook. >> i'm sympathetic to the idea that marginal tax rates apply to individuals or businesses matter for things like investment and economic growth, so i'm more sympathetic to the idea that the kinds of tax cuts that particularly were in place in the 1980s actually worked and did encourage economic growth. that's not to say that's all
that matters. you certainly had growth in the 1990s without having those kinds of cuts in tax rates. certainly a part of the picture if you're thinking about growth and investment. >> you're going to have a little bit of a tough time here because you're basically making roberts -- reaching robert's kind of conclusion with my kind of argument. >> sounds perfect. >> you're basically making ab argument in keynesian terms about the impact of tax increases. i don't think the imperative right now should be -- i think the imperative should be raising the growth rate. i do not think that fiscal rerestaurant is plausibley a major growth promotion strategy at a moment when interest rates are effectively zero.
i think it was reasonable to think of fiscal restraint as a central growth strategy in 1993 when capital costs were high and plausibly holding back investment. i think there's a very good debate to be had about the respective role of public investment and reduction of barriers to private investment. i think obviously one has to pay attention to long run fiscal sustainability. but i would tell you that i think if we are successful as a country in raising the growth rate to anything like 3%, there will be a strong tendency for these fiscal problems to melt away as the economy grows out of them. almost regardless of what we do in terms of fiscal packages. if we are not successful and the
underlying growth rate of the economy remains in the had 1.5 to 2% range, i think we're likely to be preoccupied with questions of long run fiscal health almost no matter what fiscal packages we are able to adopt. and so i think the -- i think there's a need in washington, which i think is substantially happening, for the frame of big picture economic debate, which has been for 15 or 20 years framed in terms of long-term budget plans to be reframed in terms of growth acceleration. i think that reframing from the long run budget issues to the question of growth ought to be something that people can agree on whether they come at it from
a more progressive and keynesian perspective or from a more conservative and incentive oriented perspective. >> well, thanks. we as a country, and i personally tend to obsess way too much over the short-term and never so much as four days before a presidential election. i'm very grateful to both of you for this wonderful interlude where we thought about the long-term. thank you robert and larry and thank you. [ applause ]
coming up later on c-span3, conversation on how next policy will handle administration in iraq, hear from former official and deputy miniature of iraq. live noon eastern from the hudson institute in washington. four days until election day and our road to the white house begins at 5:00 eastern with hillary clinton live from detroit. 7:00 p.m. eastern donald trump holding a campaign rally in hershey, pennsylvania. >> election night on c-span, watch the results and be part of a national conversation about the outcome. be on location of the hillary clinton and donald trump election night headquarters and watch victory and concession speeches in key senate house and governor's races starting live at 8:00 p.m. eastern and throughout the following 24 hours. watch live on c-span, on demand
at c-span.org. listen to live courage using c-span radio app. >> as the nation elects a new president on tuesday, will america have its first foreign born first lady since louisa adams or president as first ja. learn more about the influence of presidential spouses from c-span's first ladies now available in paper back. first ladies give readers a look into the personal lives and impact of every first lady in american history. first ladies cam pannion to c-span's biography series and features interviews with first ladies historians. each chapter offers brief biography of 45 presidential spouses and archival photos from their lives. first ladies in paper back published by public affairs available at favorite bookseller
and also as an ebook. this week american history tv on c-span3. saturday night, lectures in history, history professor at dartmouth native american history colonial through westward expansion. >> they presented themselves to us as allies an friends of the future clearly enemies, occupying our lands with troops, which is the one thing we were fighting against. at the same time by cutting off and withholding gifts, refusing to give gifts, limiting trade with us, that's essentially a declaration of hostile intent. >> later at 10:00 on reel america we look back 1966 campaign for california governor between incumbent been pat brown and challenger ronald reagan. >> my experience has turned me
inevitably toward the people for the answers to problems just instinctively i find i believe and put my faith in the private sector of the economy. a belief in the people's right and ability to run their own affairs. >> every single solitary category of business indicia that tells whether or not california's economy is good is proven that we have done a good job. >> then sunday morning at 10:00 eastern on road to the white house rewind. >> next tuesday all of you will go to the polls and stand there in the polling place and make a decision. i think when you make that decision it might be well if you would ask your self, are you better off than you were four years ago? >> our proposals are very sound and very carefully considered to tim late jobs, to improve the industrial complex of this country, to create tools for american workers and at the same
time anti-inflationary in nature. >> the 1980 debate between incumbent president jimmy carter and former california governor ronald reagan. at 7:00 -- >> a realist would not have devoted his life to fighting slavery and a realist would not have said this's which is a disillusion would be followed by to separate portions of the union seems the result would be -- trt continent. calamitous an devastating as the course of the progress must be so glorious would be final issue as god shall judge me i dare say it is not to be desired. at the new york historical society, johns quincy adams, debate the question, was john quincy adams a realist. during the discussion they talk about foreign policy views and legacy of the sixth president."
for our complete american history tv schedule, go to c-span.org c-span.orgs. >> now look how the internet and technologies are transforming the economy. panelists looked at the economy through websites like uber and airbnb, new technologies like self-driving cars and 3d printers. hosted by new america, this is an hour and a half. >> welcome. i'm senior technology writer for slate. we're here to talk about whether technology will make ownership obsolete. this is a production of future between new america, arizona and slate manage sewn emerging technologies and transformative effect on society and public polic
policy." central to this partnership is blog new york city and slate. in addition to content on slate we launched futurography, height of learning, each month we choose a new technology idea and break it down. we ask, what's the state of the science, who are the researchers leading it's development, what are the primary ethical and policy debates involved. this month, it is the end of ownership which serves as an inspiration for this event. a couple housekeeping items. please, silence your cell phones. we will have q&a at the end of each panel. during the q&a, we will be live streaming the event. please wait for the microphone before you start speaking or nobody will be able to hear you. make a comment in the form of a
question with a question mark at the end. got it, question. you can follow the discussion online using the hashtag ftownership, all one word, and follow us at future also one word. i would like to invite the speakers for our first conversation to the stage. conversation to the stage. our first speaker is lauren belive, senior government relations manager for lift. welcome, lauren. >> we have holly main, senior director for mid-atlantic sales for spotify. welcome, holly and susan lund, partner at mckenzie global institute. welcome, susan. our first conversation is why own anything when you can access everything. i am going to sit down and we can start our conversation. lauren, let's start with you. cars are an exciting space right
now. they have been much the same for decades. the industry is changing fast. talk a little bit about the future of cars, how it is changing, how fast it is changing and what might not change, what might change and what might not change in the next decade or two in terms of whether we buy cars, whether the cars drive themselves, and what that means for our ownership and our relationship to cars. >> first, thank you so much. i am so pleased to be here. right off the bat, i get the same question probably every single day. what's the difference between lift and uber? lyft and uber. it really comes down to how we were founded. uber was founded to be a taxi alternative. they started with luxury black cars. lyft, on the other hand, was founded to be a full alternative to car ownership. we have two co-founders who were studying all these different
inefficiencies on the market. 80% of seats on highway were empty. people own these cars, these assets but they are only using it 4% of the life of the car. the other 96% of the time, the car remained park. when you think about what car ownership means today, people spend on average $9,000 a year on cars when you think about gas, maintenance, insurance. when you look at how the trends are changing in the american cities today, you have millennials that are moving into cities and getting more and more of the market buying power. do you think they would like to have the burdens of ownership or perhaps the access to services and services of rides through technology? it's been a very interesting way this trend is happening already organically. in 1983, the year i was born, 43% of 16-year-olds got their driver's license. in 2014, only 24% of 16-year-olds got their driver's license. that was something i was 100% sure i wanted when i turned 16.
you are starting to see this happening organically. with lyft, what we've been seeing is a trend toward the self-driving car. we see it as a way to help eliminate these inefficiencies in the market. if you think that 96% of the time, a car is parked. that means you have cars in cities on roads and in parking spaces just sitting unused. if you can reimagine cities and the way people utilize cars, we can get rid of parking spaces. that could be a real way to bring more commerce into cities instead of parking, parks, more housing for people. we are really excited to see what that means. at lift, we believe that in urban environments, people will stop owning cars completely by the year 2025. that's fast time line but one i think is already on its way. >> that's very soon. >> what about in suburban and rural environments?
>> that's something we'll see trends go a little more gradual. first likely in urban environments, slow speeds. as the technology grows richer and the testing grows more concrete, you will see that move to suburban and rural environments. >> we just had news today of the first self-driving truck shipping 50,000 cans of budweiser about 120 miles down the highway. i should note it was following a path that had been very well mapped out for it in advance for two weeks, and i believe there was a police cruiser following along behind. we are a little bit a ways from all our beer being shipped around the country via a truck. >> holly, can you talk about the trends of music ownership to music as a service? >> i think there are a lot of similarities to some of the things that lauren touched on. i think for spotify, we were in the streaming business before streaming started to become
mainstream, which is where it is today. we are a ten-year-old company, swedish in its roots but we feel happy to see streaming starting to pick up. we've been waiting for that to start happening. our general feeling is that with the shifting consumption driven primarily by millennials and the advent of technology and smart phones and the devices that all of us as individuals are dependent on, that we are able to bring more music to more people with more diverse backgrounds and people that may not have had access to it or even known that they liked it, certain genres and things like that, to more people than we were ever able to do when it came down to buying that cd or that piece of vinyl for those of us that are my age. i probably dated myself. vinyl is coming back. it proves the old adage what is old is new again. we feel from our position streaming that we are seeing all
of those things start to pick up so if people want to pay for something and kind of own a more customizable experience with music, they can certainly do that. i think the trend is, people want what they want when they want it and they want it customizable. it is more about experience than ownership, having that 400 lp collect and things like that. >> a lot of the benefits to the consumers are easy to see. you talked about having what you want when you want it. when we talk about turning goods into services, you have the chance to get access to things that you would never be able to afford to own. there is another side of this, which is, what about the people involved in these economies? what about the workers? this is something you have looked at closely, susan lund. when we talk about cars, you know, lyft and uber have provided employment opportunities for a lot of people.
at the same time, some of those same people are anxious now about this transition to self-driving cars. are those jobs going to be obsolete? when we look at something like spotify, the musicians, we've heard some complaints at times about are they really able to make a living when people stream their music mpd of buying it at a store. what are some of the trends in terms of how employment and jobs and the economy are being affected by these transitions? >> the short answer is, they are being affected a lot. there are two big things we are talking about. one is automation, like self-driving cars. then there is the independent work. what happens to the workers. you have a job with one full-time employer. the automation part is still to be seen. if we do move to a sharing economy, the auto industry and the chains is a major employer in the u.s. today.
if we move to a point where none of us own cars and there is a fleet of cars driving us all around, i think we would have something like 90% fewer car sales each year. that is a huge hit to u.s. manufacturing. what happens to all those people. i don't have great answers on the automation point. we did just release a study for those out in the lobby for those interested on the gig economy, what we call independent work. the government statistics on this are really poorly done. the way policymakers and most people -- this is a pretty young room. say your parents thought about employment as a payroll job with one employer. those are the jobs numbers that are released the first friday of every month and everybody is watching carefully. we do a very poor job of tracking but actually part of the population doesn't make their living having one traditional employer.
we did our own survey in the u.s. and five european countries. what we found in the u.s. is that 27% of the working age population, almost 1 in 3, people today, don't just have one traditional job. they are either a full-time freelancer or self-employed person or independent contractor or they are using the gig economy like driving for lyft or uber or supplement to their other main economic activity. so i think alock with the sharing economy, it's interesting for people who want to be their own boss and not have a traditional job, things like uber, task rabbit, up work and airbnb able you to more easily than ever put
together a bunch of different income streams and make an income that way. it is a whole new world. the trend has been, we think, growth in this. there is other research to suggest over the last ten years, the share of people in alternative work arrangements has grown quite significantly. the sharing economy might actually spur a faster shift in that direction. >> there is some ambiguity when we talk about the sharing economy in terms of what we are talking about. there's a few different related strands that we're discussing here today. when he we talk beauty cars and car sharing, in some cases, people are sharing a car together and in other cases it's one car going around and picking up different people throughout the course of the day. in terms of music, not sharing but a transition to something you used to own to something you now subscribe to. it has basically gone from a good to a service.
in a sense, what you were talking about, susan, with the economy, employers are sharing workers. they never owned their workers but they used to have a defined number of workers who gave them their full attention. presumably. now, there is a sort of sharing among these gig economy companies. we have talked about cars. we have talked about music. another really obvious one one, other types of media. netflix, people are streaming movies and tv. can each of you name a nonobvious area? it is easy to go from well-defined examples of things that are now being shared and moved from a good to a service. you can say everything is moved from a ghood to -- good to a service. for the most people we still own our clothes, personal devices, that sort of thing, our home appliances. what is something else besides
your own area that you see being shared now or in the future? >> great. one thought that just comes to mind is the way that cities are changing, the nature of work is changing, seeing the rise of incubators and shared work spaces and people coming together and sharing their brain trusts that helps advance them in a professional manner in some ways, but also changed the nature of work in a lot of ways as well. you are not going to a static one work environment anymore. you're seeing these honey combs of work systems across cities and environments as well. like we worked. >> you touched on it, clothing. you have rent the runway. that's one. there is luxury services. there are apps where you can schedule massages, v luxe is an app that comes to mind. massages, blow dries, they will come to your home and do it for you.
some of it is convenient. some of it is i want it when i want it and how i want it. snacks, graze. you can have a customizable snack box delivered to you. there is a lot. >> from a labor perspective, we went through long esoteric discussions on what couldn't be filled by a freelancer or an independent worker. the answer is very little. you can imagine apps in retail, fast food, dry cleaners, people pick up a gig through an app and say, i'm going to work this shift and come in and do it. we see it in medicine. highly specialized surgeons slayer their services on a piecemeal basis and get paid for each surgery they do.
they will go to this hospital and the next one and the next one. in the world of work, ronald coats wrote this seminal article about why is there a corporation, why is there a company. he said, because it is easy to manage people and reduces transaction cost to much people -- to have people in your company than contracting everything out in the marketplace. what apps and digital platforms are doing that is completely changing the equation. it is cheap, efficient, transparent. you get this whole pool of potential workers. i think it is a long transition. you can imagine the size of large companies shrinking in terms of their full-time employees. there is some knowledge you are going to want to keep in house. a lot more can be done on project task-based basis with independent contractors. this is a shift. it is not new. we have seen the evolution of outsourcing with companies for the last 10-20 years. these new on-demand platforms
and apps for labor could actually -- we may see another wave of that shift. >> i was thinking, what is new and what is old in terms of sharing. obviously the idea of sharing things is not novel. for a long time, we've had public libraries. we've shared taxicabs in a manner of speaking. we've rented tuxedos and prom dresses. we share a lot of services that are provided by the government, infrastructure, public transit. i wondered, are some of those more old school forms of sharing at risk from these new forms of for profit sharing. libraries might be one example. public transit might be another one. how do you think about lyft's effect on public transit in a world where we can hail a car at any time, does that just encourage the kind of sprawl and
the car dominated environments that we thought we were maybe beginning to move away from? >> that's actually a wonderful question. we don't view our we view ourselves as a complement. one of the beauties of how this isn't a taxi alternative, there is data all the time where the rides are coming and going. there is a heat map and you see there is a huge population of lift riders we call them underserved transportation population, people who live too far from bus stops, too far from bus stops. the idea that you can get a ride door to door to the train. lift line is a shared ride. for a reduced cost, in some places, $3, you can get a ride in a lift if you share it. 70% of our rides in san francisco are line rides and 30% of those are happening 100 meters from a transit station. people are starting to look at
this as a complement to how they are utilizing transit. i think one of the big things, the theme i am hearing is there has to be a consumer demand that drives all of this. uber and lyft came to the scene. people, all of the sudden, could have a door to door ride without the certain dip tus the serendipitousness of trying to hail a cab. they know it is coming. you don't have to pay with a credit card. you can have an easier experience. that's something consumers really loved. you see other technologies that emerge that just didn't work out in the first iteration. we are not sitting here wearing google glasses. maybe in a couple of years. but not yet, it wasn't consumer ready. no matter what industry and market you're in, it's the consumer drive, the consumer choice that's going to really be amplifying how people are going to be using these emerging technologies.
>> you all can feel to jump in at any point if you want. i wanted to also ask -- did you have something on that, sue? okay, i wanted to ask about the, about what we will still own 10 years or 20 years from now. what doesn't lend itself to being transformed into a service that you subscribe to or something that you hail on demand on your smartphone? do you have any ideas on that? >> i would say whatever we care about. i find myself funny i don't consider myself a car person. there are a lot of people that like to own a car. they say, i bought a new car and it is really fun to drive. i think what we are going to own is what we care about, what we want to own. i know plenty of women that may continue to buy designer clothes and keep them in their closet, because they are theirs.
you will own what you actually care about. >> that's an interesting point. i like that pithy formulation of what we will still own. it's what we care about. i imagine you guys might push back on that a little bit because i think you would both say people will still care about cars, probably still care about music, but you still think that they will move from ownership to streaming. i think there are powerful personal feelings around this. we heard a story a few months ago of someone who claimed that apple music had stolen his music, that it had converted the mp3 files on his computer and replaced them with file that is were available on the cloud through apple music and then some of them were gone, and a music video he owned was gone. there was an investigation to get to the bottom of what happened. doesn't that show, holly, that people still do want to own their music, at least the songs
they like the most. >> yes. streaming, i think about my own personal when i listen to music. i shouldn't probably say this. sometimes i stream from other services. it really depends on what i'm doing. if i'm having a dinner party and i just want music to play, maybe i might not stream from spotify. if i want to do things that are more customized and i want to listen to things i've created, maybe spotify is going to be a better platform for me. i have lps. i have vinyl that i still love and i love the sound of it. sometimes i want to listen to that. i think it is about -- i want to say i think what we are going to own is less of the actual material side of things but the experience and the joy and things like that that these services bring you if that makes any sense. it's a little bit of what susan touched on. you are going to own what you want to own and someone that is going to be the experience, not necessarily the distribution
channel or the hard materialistic good. >> you mentioned that vinyl sales are going up. interesting case in point. once we can get most of the music easily through a sr advice like spotify, maybe the stuff we really care about when we do own it, we want to really have that tactile, analog experience with it. does that imply in the future if you really love cars, you will rent your little electric buggy to get around. you will hail it on your phone. maybe you will still have your classic ford mustang in the garage. >> i remember my very first war was a turbo volvo fire engine red wagon and i loved it. my brother totaled it, that's a whole another situation. it is something where people have a love affair with cars. in the 1960s, getting your driver's license and going on to
the open road was a freedom. now, it really has become much more of a burden. you think of how much space in your house is dedicated to hard cover books and dvds that now you don't need to utilize that space. it is the same idea with parking. i can't remember if i said this, but in the united states right now, there's more parking than the entire square mileage of the state of connecticut. there are different ways to think about how can you utilize space and think about it? so i think there will be a gradual balance and it will be organic. the world is not going to go autonomous overnight. you will see human driven cars and autonomous vehicles operating side by side as it technology continues to emerge. it will be interesting to see how this works. >> i actually want to contradict what i just said. i think the next generation
could be much less about tangible goods. this could be a generational issue. i look at my kids. i have a teenage daughter who is finally sort of pushing learn to get a driver's license. there was no need. she can take lyft and uber around. driving is a service. she may never love the way i do. they don't have physical books and physical music. they are growing up without this notion of these things as a tangible good. people like me might say, i read a lot of books, e books but for a really good novel, i will go buy a hard copy and put it on my bookshelf. they may not do that. 15 years out, we may, in fact, be in a world that's much less about physical goods and much more digital. >> going back for a second to the idea of the gig economy and
people sort of not owning a job but having these different gigs that sustain them, are these people making a good living, do they feel like they have good job security or are they accounted as unemployed despite having gigs? >> i don't want to get into how the government counts things. who knows. the answer to that is who knows. we didn't ask about income. getting people to tell you about their income is difficult to do accurately. we did on a scale of 14 points of how satisfied or unsatisfied are you with different elements of work life. we asked this of everyone. people with traditional jobs as well as independent workers. and what we find is that on 12 of the 14 metrics, people who are independent workers are more satisfied with the elements of their work life, income level and income security and on two measures, including health care benefits, they are equally satisfied with traditional workers.
we don't know what their income is but we know they are very happy. another study which the jpmorgan institute tracked people's income, found that people who do gig work or independent work have less variable income than payroll employees, so that's really interesting. it is a way of filling in, which if you are working part time, you don't get the number of hours you want. when you look at nonsalary people, their income is quite volatile. >> going back to that theme of owning things that you care about, if you don't have a career, a full-time job, a career is something you can care about it is something you can pour your passion into. if you have a variety of gigs, maybe those are not things that you're able to be as passionate about but maybe it frees you to pursue a different kind of
passion in life, but there is this question of security. when you don't own something, can it be taken away from you. not just a gig. if you are an uber driver, you know your company's plan is to make you obsolete eventually. your media in spotify, you could have that. if they go down, you don't have any music. we had the dns outage because of that attack on a domain name server took down all sorts of services across the web and netflix went down for people and guess what? nobody has been buying dvds because they have netflix. is there a downside to ownership a downside so access over ownership that something could go down or be taken away from you? >> sure. it can go down. that's technology. i feel like that every day at work when my computer crashes. computers are great when they work, right? you have to wait for everything to reboot and things like that.
so again, i think it's -- sure, there is a downside, you are relying on technology which 95% of the time works in our favor but there is always that moment where it might not. >> two thoughts on it. even in the nondigital world, things do break down. your car will need to go in for services. it is part of life. for us too, you have touched on shared economy drivers. our drivers at lyft are as much of a consumer of the platform as our riders. they're a lifeblood of the platform. we are going towards an autonomous future and so is the whole world. we see in some ways that our driver's numbers in the next few iteration are going to be increasing. we are going to continue to look at ways we can support our
drivers with what they need. that is something we take very seriously at lyft just to let everyone know. >> i would say this has been a very optimistic panel. i think cybersecurity is a real issue and privacy. in this digital world where everything is streamed, guess what, spotify knows what i like to listen to, because they are always suggesting more things i would like to listen to. our phones know where we are. i think the issues of cybersecurity and privacy are real down sides and could be major blockages to realizing this future if we don't solve them. >> for a lot of people, that's what prevents them from signing up for services. i think it is very generational. millennials don't think as much about it. this is a generalization. you talk to older demographics, it's the reason they don't want to online bank, or to download
apps and the reason my father has a flip phone with electrical tape around t he might buy a smartphone because he is convinced it will track him. he might be on to something. spotify and i would assume for lyft as well it has data, we are so protective of it, from a consumer standpoint and from, to be candid, a product development standpoint. it is creepy. we can probably figure out your personality and your day based on what you stream. we have 85 passwords we have to log into to make sure that space is protected. and it's the reason why we won't get into advertising partnerships with certain companies. because we won't release that first party data. so it's a huge concern. >> i'm really glad you brought that up. it is not just security and the idea that something can be taken away from you if you don't own it, it's also the people that do own it can monitor your usage at all times and restrict your usage. if you had an encyclopedia at home, people can track it.
google is tracking a profile of you for advertisers so that's another potential downside to this transition. i wanted to talk about one more upside and then we'll go to some some question and answer from the audience. it seems like one way i've seen that companies that offer subscription or sharing services are able to give people a sense of ownership through customization. one of the smart things that spotify has done, i started using the free version of spotify, you start building playlists on there. once you put all that time and effort to the playlists, you feel like you own those, and then you want to listen to those playlists but they're within spotify so maybe you sign up for premium. i wondered if you could talk a little bit about the idea of how you personalize a car that's not yours? i have heard the ceo of gm has talked about their ideas for how you can step into your car and your smartphone can give you an
experience that's your own. >> we have a wonderful partnership with gm looking for the future. it is this idea that you can reinvent the idea of a car. you are coming off of work and going to the nats game. maybe you can call a sports lyft, and it will come. for us, it is all about efficiency. you could have a few different fans in the car and be streaming the pregame in the car and going fot game. it is a whole different idea of how people are think being it now and slogging through traffic. maybe there is a wi-fi, a quiet lyft and you are able to drive through. maybe you work a little bit outside of the city but you can take your autonomous wi-fi lyft and do your morning meetings before lunch. if you are reinventing an idea of the car, you look at, this is something lift is doing. different populations, senior mobility, people who may not be able to drive for themselves,
lose that spontaneity in life. and now at a touch much a button they can be able to have a car at their fingertips to go to medical appointments and grocery shopping and all the things people want to do. it is changing the way people are living their life joef all. that is ownership they are able to get back. that's exciting. >> so we can go and see if anyone in the audience has a question they want to ask. if you are called on, wait until you have the mike to ask your question. >> hi, there. i'm curious about the idea of workers unions, how the gig economy and there have been court cases in l.a. or california with uber and its workers. how does this change the way unions work and their relevancy in the future? >> do you have any thoughts. >> i can't comment on the specific court cases.
i'm not a lawyer, thankfully but i am an economist, which some people might think is even worse. i think that the whole idea of unions and guilds, is an interesting one. you can imagine them getting new life. the freelanceers union gets group health insurance rates for its members. the hollywood screen writers guild is a great example. they do some compensation negotiation but they provide a range of trining and benefits like retirement and health insurance. i think there is definitely an opportunity and it could be guilds and union toss do things like benefits, income security, training and career progression. and all the back office stuff. the fact is a lot of people that want to be a gig worker, a freelancer, sure, i'll do some economics research. i am not good at marketing and sales and i certainly don't want to file my taxes. there is a whole ecosystem of
different services to enable people that want to be their boss to do the back office skut work that they are not good at and don't want to do and maybe it is the unions start to move in that direction. >> it is a worthwhile point. we have an economy and a social system that has been built up around the idea of goods, of manufacturing goods, distributing them, selling them at retail stores. we know how to build an economy and a society around that. i think we are still figuring out how you build a society around an economy full of services. included in that is the people working part-time jobs. one interesting trend i would note. my former colleague, allie griswold has a newsler called jt oversharing." i was reading her latest issue. she was talking about a series
of start-ups that are explicitly hiring o workers as employees, rather than contractors and giving them a share of equity in the company. these are not so far the leaders in their spaces. they are upstarts and we will see how that model fairs against contractor model. maybe that will provide some hope for the idea that the sharing economy could lead to stable careers. yes. >> i'm wondering about linking platforms going forward. i don't have a facebook, which is normally not a problem. i just log into things in my email. there are some things i can't access but it is really okay. one in an app would want to use, facebook is for central i.d. verification. thinking about consolidation of i.d. verification going forward, is that a concern?
are we thinking we might have a consumer super user i.d. provided by a google or facebook where i would log into my uber and spotify and if there are any conversations about that that you have heard, what are some of the concerns and opportunities? >> can you address how you log in and what your options are for logging into spotify? >> right. ours is all based on your user name which is linked to an e-mail. i have not heard of having luke a super consumer log-in. >> facebook wanted to be the identity service. google plus had designs on being an identity service for the web that didn't pan out.
but i think we actually had an event here that i moderated about virtual assistance and how they're becoming the portal and if you have an amazon echo, you can use that to hail -- i don't if we have lyft yet through echo but you can hail a car, you can use it to play your music and then there's the question of do those assistants become, do they gain control over what you have access to and what you don't have access to. the question of interoperability is one, maybe you heard tesla is working on a shared tesla network so once teslas are autonomous and able to drive themselves, elon musk's idea you might have your tesla drive you to work and then send it out and sort of rent it out to other drivers who can use it while you're at work and it will come back and pick you up. it's called the tesla shared fleet. it's a nice idea. the other day the plan is you would only be able to rent out your car through the tesla
shared fleet so tesla controls who drives the car. if you don't own the car you can't rent it out to somebody through lyft. does that worry you, the battle for control? >> i think competition is a very healthy thing and the more competition you have in the market it's a good thing. >> it is a little bit concerning. i mean these platforms, there is a winner-take-all component to technology. and the digital i.d. is actually a really interesting and i agree concerning element. as far as i know i don't think i gave facebook my social security number. so it might think it knows me because i created an email account but the fact is you can create fictitious accounts to get around it. the idea this all somehow could be linked to a social security number or a true identification of me is interesting and horrifying.
>> i think centralization is a real issue because if you have a retail environment, who gets to store space is something figured out on a detralized basis. tons of different people own land and can lease that commercial property any number of tenants and you can go to the mall and shop at, you know, tower records or go down the street and go to best buy. when you're buying online and whether it's through the apps on your phone or amazon echo, or that sort of thing, it's not clear that we will have a level playing field. i know that spotify's stance is been that competition is healthy and all that, but you know, the fact is that a big new rival is made by apple and apple controls basically the digital equivalent of the mall. they get to put the apple music app front and center and make it harder for to you get to the spotify app and they can take a cut off the top when do you use the spotify app so i think the
centralization is a serious issue. i think we have time for one more question. >> my question has to deal more with is this a shift because of desire or more of a shift out of necessity to sharing in we're coming out of the worst recessions in a long time, many millenials face the burden of student loans. if the economy improves do you think we'll see a shift back to ownership? right now the economy is still growing at a very slow rate. i know personally i would like to own my own car but can't afford it because of student loans and other things like that, so do you think sharing might decrease once the economy starts improving? >> yeah, that's an interesting question. is it partly just economic anxiety to borrow a term popular right now for other reasons, is it just economic anxiety that's leading the younger generation
to be willing to stream things and share things rather than own things. there's always that question with new technology when a younger generation adopts it, is it just, is that the future or is it just because they're young and as they get older their habits will change? any last thoughts on that from any of you? >> well, you look at the united states and the history of the united states. we're a country that's built for cars, highways, freeways, parking spaces, our sidewalks are a certain size so that cars can park on it. i think right now we're at the crux of a huge transportation revolution where people are racing towards really reinventing the american city in a lot of ways and it's going to be driven by this new, by that people are going to be able to consume a car and that's going to be exciting. so in terms of what the shifts are for ownership or not, at lyft we hope that we will continue to share roads to make sure we're reducing conjest should be, but we'll see how that movie ends. >> we have to wrap up. thank you to our guests lauren
belive of lift and holly maine of spotify, thank you so much for joining us. [ applause ] now for the second phase of our afternoon i would like to invite monica potts to give a short presentation on the post ownership society. monica potts is a writer based in mannasas, virginia. she is a fellow with the new america foundation asset building program and she writes about a variety of subjects including poverty, politics and culture. monica potts, thank you. [ applause ] >> so i'm going to talk about what the sharing economy is like for people as it's lived on the ground and i think i'll address some of your questions about
economic anxiety and sort of the big thing i want to touch on and if i forget to mention this again later, just add this sentence to kind of the end of every point that i make, and that's what we do want to make sure that people are participating in a sharing economy because it's what they prefer and they're not buying things because they don't want to own them, and not because they can't afford them, that this is the result of moving down the economic ladder. and so i want to talk a little bit about young adults, millenials mostly, and the economic condition that they found themselves in before we talk about the sharing economy. so first, the oldest of us are now entering our late 30s, the youngest are in college now and important to talk about the way that the adulthoods have been shaped by the internet and other trends which have also involved a lot of economic insecurities. it's not just the great recession. it's also the recession that happened in the early part of the last decade which is when i
graduated so i was born in 1979. i'm by a lot of measures one of the oldest millenials and i graduated from college in the spring of 2002, that was after 9/11, and after the dot-combust. my first was the city government was coming off a hiring freeze because of of that recession and because of 9/11. and i had no idea -- i knew i had a job when i graduated but i had no idea when it was going to start, i had no idea when i was going to need to move to new york and i sort of had to be ready and my first job was just up in the air for a really long time so for me and everyone i knew, the whole economy was really uncertain at that time, and we spent our 20s sort of catching up from that. this was especially true when we compared ourselves to the generation a little bit older than us when it seemed the internet was creating new industries and people were walking off after getting their diplomas with really great jobs lined up, and obviously,