U.S. Treasury Secretary Visits Campus to Discuss Economy

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Despite the impending economic slowdown, the U.S. Secretary of the Treasury told a campus audience yesterday that the best times could be yet to come.

"I think that the years ahead can be very, very good ones for the United States and the world," Lawrence Summers told a packed Haas School of Business audience. "It's a very different economy than it was when I was in school."

Regarded as one of the world's great economists, Summers set forth to Andersen Auditorium his core policy priorities for the "new economy" that has seen remarkable improvements in technology, markets and global integration.

Encouraging private investment and enlarging markets, he said, must be policy cornerstones in the years to come.

"In a world of particularly rich investment opportunity, the crowding out of investment becomes especially costly," he said. "It becomes a crucial item for every public policy in the micro(economic) scope to expand the size of markets."

He also strongly advocated reduction of trade barriers, although he acknowledged an often unfounded public perception that international competition hurts the American economy.

A member of the Clinton administration, Summers advocated an increased commitment to education from within the federal government.

"Much can be debated and said about how to improve the quality of our schools, but there are some things that shouldn't be contentious," he said. "It shouldn't be the case that at any junior high school in the United States, lunch begins at 9:30."

In a similar vein, he also expounded the virtues of research for keeping the economy strong.

He pointed out that money generated by the Internet has more than repaid the costs of researching and developing it.

"It is hard to believe that this country shouldn't be making every plausible investment in basic research," he said.

As for unemployment, he said Americans should concentrate on employing everyone for several reasons.

"This used to be a moral argument," he said. "But I would suggest in (the) economic situation we have today, it is a very pragmatic argument. Every person left behind is an opportunity to grow the economy in a non-inflationary way."

Following his remarks, which deviated significantly from prepared text distributed before the speech, the secretary took questions, some highly charged, from audience members.

When asked what economic policy the United States should pursue toward Cuba, Summers said the architects of America's containment policy toward the island nation would be surprised to see Cuba as one of the last bastions of communism.

"I suspect whoever is president after Jan. 20 will have to look carefully at our policy with Cuba," he said.

While he would not speculate on the future of the presidency, he did tell several audience members who were worried about the environment that economic growth is a win-win situation.

"It is a serious mistake to believe slowing economic growth is a solution to environmental improvement," he said. "Economic growth, which makes people richer, makes them willing to pay more for environmental protection."

Summers was introduced by Janet Yellen, a Haas professor and former chair of the President's Council of Economic Advisers. But more importantly, Yellen was one of Summers' graduate school professors.

"Wherever Larry goes, the earth shakes," she said, comparing him to the great economist John Maynard Keynes. "I would love to brag that I have taught him all he knows, but he has taught me all I know."


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