Diana Furchtgott-Roth – Economist, Professor & Author | Navigating Economic Realities

Diana Furchtgott-Roth – Economist, Professor & Author | Navigating Economic Realities

I’m very very concerned about inflation and I hope that we’re not going to get to the stage that we did in the early 1980s when inflation was in double digits if we do not move it in the right direction what’s the reality for the average American how’s it going to impact them well already the average American is seeing lower and slower wage growth because of inflation and that’s just the average a lot of people aren’t getting raises at all that’s interesting President Biden goes out and he quite rightly brags about the number of jobs created but it’s partly due to the tax regime that he is proposing to overturn China is not our friend and we don’t want to be relying on a source of energy from a foreign part AIO jungle welcome to success story I’m your host Scott Clary the success story podcast is part of the HubSpot podcast Network HubSpot is a huge supporter of the show I’m a huge fan of HubSpot not just because they support the show because they support entrepreneurs and if you are an entrepreneur you have some problems that a lot of entrepreneurs have productivity and it’s not a secret it’s nothing to be ashamed of you’re not the only one that has this problem and why do we have this problem well all the tools and the tech that we’re using they’re massively over complicated we have tons of timeconsuming tasks our teams are not getting the information they need to close the deals connect with customers whatever it is as entrepreneurs and our teams we all have productivity problems but hubspot’s customer platform truly helps it was built to save time and make your job easier you can get back to building your business no more hours wasted on timec consuming tasks no more chasing down Prospect info if you’re trying to close someone no more one system for this another system for that HubSpot can help you find leads reach prospects deliver the insights you need to convert them to customers all in one place plus HubSpot AI can literally do more work for you so you can focus more on scaling your business because HubSpot knows you have massive growth goals and they’re here to make your productivity problem go away visit hubs spot.com to learn how they can help you grow [Music] [Applause] better the first thing people hear is you so I’ll do the introduction um and I’ll do some post-production after but tell me what’s your origin story where talk about your background where you came from you have an incredible resume but go into detail so when did where where did this career aspiration the things that you’ve done uh various universities in the government um where did this all start how did you get excited about this was this a dream that you had as a as a little kid or was this something that evolved over the course of of your career right well well I’ve always wanted to be an economist I’ve always thought that economics can help make people’s lives better because you look at countries with good economic systems and people are much better off than in countries with poor economic systems so I very naively thought that if I could help put in place a better economic system people uh would be happier and better off little did I know that it’s not the economists that put in place the good economic systems it’s the politicians and that there can be very obvious solutions to economists that politicians do not enable so that’s basically the backstory so I set out to get degrees in economics I have an undergraduate degree from Swarthmore College uh a graduate degree from Oxford University uh I came to Washington I got a job in a consulting firm and then another Consulting F and then someone called me from President Reagan’s Council of economic advisors saying we’ve had an unexpected opening for a junior Economist in the field of Taxation could you could you come on board and so I accepted and that’s how I got started with a career in policy and when you went into policy obviously as somebody who has dreamt of being an economist uh from a very early age you wanted to change things for the best you wanted to make you wanted to make the us one of the greatest economies in the world and you want to do everything to improve the lives of the average person but when you first go go into policy you probably realize like you mentioned that politicians make a lot of the decisions that actually impact the work that you wanted to affect yourself so how were you effective over your career how did you find that you could have the biggest impact and what was what did that look like so when you’re outside the system you think if I can work somewhere like the White House or a major cabinet agency then you can make decisions that really help people but but then when you’re inside you’re working at the Council of economic advisors as an economist or as Chief of Staff as I was uh then you find out that maybe people outside have more power that by writing an oped you can influ you can have more influence than actually if you’re inside making the decisions because the decision makers inside they are very much subject to outside pressure and what goes on outside is very important to that so the people who speak on TV the people who write opets in newspapers they’re very influential on what happens that’s interesting and in your career have you worked with parties that have been able to provide pressure and influence in Government um has have you done that yourself is that something that you’ve that you’ve taken on or is that something that you’ve just been almost um on the receiving end of and you worked within the confines of of opinions that have shaped government that you’ve been part of when I was at the American Enterprise Institute in the 1990s during President Clinton’s term in office uh there was uh Hillary Clinton’s effort to have a Health Care system and change the Health Care system and when I was at the American Enterprise Institute I helped organize a series of monographs that shed light on what would actually happen if her proposed system were implemented and this worked a lot towards I think uh the end of that proposal showing that people wouldn’t have any choice in their doctors showing that costs would rise and the negative aspects of a Health Care system that was government driven rather than driven by the private sector it’s very interesting obviously that’s very topical and actually um Can can I because I think that it’s something that is very top of mind for everyone I have a million other things that I’d like to go into obviously over the past two years there’s been a lot of uh a lot of items that you have incredible experience in but that particular Point can I can I ask like and go into that just like a little bit because I’m Canadian no absolutely and I want to understand is the system that we have in Canada for example um it seems by by but a lot of people think that it works well enough I mean the weight times are not great compared to private and whatnot but when you look at a system like what’s in Canada and probably what’s in many countries in Europe why is there not a solution that we could think through financially fiscally that would work in the US what or or maybe on the other end of the spectrum maybe you would disagree that these other systems actually do work well and maybe Taxation and whatnot has uh sort of gone at go you know it’s too high because these systems have been implemented poorly so what’s your take on that well the system in Canada is very interesting it’s publicly provided there isn’t a charge for it but we find that many Canadians come to the United States for their health care so we do find uh that um and some Canadian politicians as I you know better than I do have got into trouble for coming to the United States for having Co covid vaccines in advance or even some other kinds of medical procedure prior to co so there does seem to be problems with that system in the UK there’s the National Health Service but doctors are allowed to practice privately as well as be employed by the National Health Service so you find that they might work 3 days or 4 days a week for the the National Health Service on one or two days in private practice and there are insurance companies that pay for the uh the procedures uh for private practice so there’s a system called buer B UPA uh that many people have as a form of compensation when they work in the private sector so they seem they seem to be able to balance both the National Health service is a basic safety net and yet there’s an off WP uh for people who need to have procedures privately actually that seems to be I think that in any argument that I’ve and any debate that I’ve ever had about Healthcare I think that’s actually always been the the the best possible solution almost a like a a private public two-tier Health uh health system because then also I think that what happens I don’t want to spend a ton of time on this I just want an incredibly fast topic and you spent time researching it um I think a lot of uh great doctors leave countries where there is only public options and then you lose some of that Talent like you mentioned Canadians come down to the US for treatment that’s not that’s not uncommon because the wait times for treatment are too long or the Specialists are too booked up because there’s too many patients trying to see The Specialist and then you’re left with well if you have something serious or or even not serious it’s going to take you 6 months to to get it checked out and some sometimes treated so that’s also not a a good solution when you have just pure public and people they they want to make money doctors want to make money they come down to the US and the country loses a lot of talent and a lot of uh a lot of skill but right or else in Canada they’re allowed to practice privately but if they practice privately then they cannot be in the public system so you have some Specialists who are practicing privately but then normal people who want to see them can never do that correct yes exactly so I I didn’t realize the UK did had their system like that and in your in your opinion would that be A system that would work well in the US something along those lines so in the US we have a Medicare and Medicaid and uh these this provides a basic uh safety net and then there’s uh the Affordable Care Act insurance which uh is subsidized for people below certain income levels a relatively High income level so you can be earning almost $100,000 for a family of four and still get subsidies under the Affordable Care Act but the problem with us insurance is that it’s partly employer provided which has meant that it’s difficult to have competition in the supply of these Insurance products so for example you don’t hear people say I’m losing my job I’m going to lose my home insurance or I’m losing my job I won’t be able to drive I will get auto insurance but you do hear them say I’m losing my job I won’t get my health insurance because it is so closely tied to the employer so something has to be done to level that playing field either by making that employer provided insurance taxable or by making Insurance purchases outside of the employer tax deductible and I think the second route is probably the way to go because you cannot have such a big change right now with the institution that’s built up of employer provided health insurance making that taxable right now would be too big a change I want to uh so obviously this is one major um issue that should be solved for for the average American person but obviously that’s not the only issue and that actually this will I don’t want to spend too much time on Healthcare cuz there’s a lot of other incredible insights that you have around what’s happened so uh we look at inflation that’s an incredible topic that I think you have a lot of expertise in um we’re looking at the highest inflation numbers since 1982 so you know you’ve been working as an economist for I I don’t even know how long longer prob like a long time like a fairly long time if you were around with the Reagan Administration so you’ve seen everything so what has caused this inflation what let let’s simplify what the major drivers are because we hear the different causes from different politicians different news outlets you’ve been around working with the numbers working with different uh different Administration so what has caused this there’s been vast monetary accommodation from the Federal Reserve and there’s been a big fiscal policy expansion in the beginning of 2021 rates had been very low uh during um we saw that GDP growth was very strong at the end of um at the end of 2020 and yet at the beginning of 2021 there was another two trillion dollars of stimulus put in the economy and this kind of pitched everything over the edge people were being paid to stay home at a time that GDP growth was around 6 or 7% so consumers wanted to buy Services they wanted to buy products at the same time stimulus checks were being sent out that encouraged people to stay home expanded unemployment insurance benefits encouraged them to stay home it’s as though you gave everyone coupons to eat at McDonald’s so everyone went to McDonald’s but then yet the staff didn’t show up and there wasn’t enough people to produce all the hamburgers and french fries that’s a bit what it was like so we had these major supply chain problems that drove up the prices and we have yet to recover fully from that so the combination of a very loose fiscal policy with a lot of spending together with interest rates that were close to zero and there have been people right in 2021 in the spring people like Mickey Levy of barenberg Capital One of the smartest economists around was saying you got to be careful of inflation you got to watch inflation at the same time the Fed was saying no it’s transitory it’s just going to go away but it didn’t go away it was growing and now it’s about 8.5% the producer price index is above 11% so now the FED is in a really tough spot they don’t want to have to raise interest rates too quickly during an election year they don’t want to seem to be political on the other hand they don’t want to be left with the legacy of double digit inflation so the question is what to do so that’s an incredible point and I understand where it’s coming from but the FED is also buying billions and treasuries and mortgage back Securities so tell me why does that make sense when they’re already trying to solve the first problem that they created this seems to be compounding the issue that’s a great question Scott well they have announced that they have stopped buying the treasuries and mortgage back Securities and they’re whittling back their multi-trillion dollar balance sheet so they are starting to move in the right direction they raised interest rates by a quarter a percent of the last meeting many people say they’re going to be raising them by half a percentage point at the next meeting in early May so we’ll have to see what happens they have another six opportunities to raise interest rates raising the federal fund rate this year and we’ll have to see if they do it in what’s called 25 basis point increments that’s a quarter of percentage point or 50 basis point increments which is half a percentage point but if they do it in 25 basis point increments at the end of the year will be left with a federal funds rate of 2.9% inflation is now running at 88.5% we have never managed to get inflation down by having a federal funds rate that’s lower than the inflation rate so whatever strategy they’re using is going to have to be helped by President Biden he can actually do something also to help br bring inflation down and exerting downward pressure on Energy prices and commodity prices and he needs to be working in tandem with the Federal Reserve on this to bring inflation down now is is he doing that is he proactively doing that right now well so far he is not he could be doing a lot to lower energy prices by uh expanding production in the United States so he said that he’s taking oil out of the Strategic petroleum Reserve but we have the biggest strategic petroleum Reserve right here under our feet and we could be expanding oil production uh offshore and in different areas in order to uh lower the price of oil North America is the largest uh natural gas and oil producing region in the world and we should be taking advantage of that you know Scott prices are set by expectations so if the president announced that he was doing something different then the price of oil Could Fall by 10 or $20 a barrel just on expectations of Greater production and lower prices but so far he has not announced that he is doing anything why why are we not taking advantage of the resources that we have what’s the what’s the geopolitical reason again as I said in the beginning it comes down to politics rather than economics the president certainly knows that we need more oil production but he’s going to Venezuela he’s going to Iran he’s going to Saudi Arabia he’s asking them to produce rather than our companies here because the left-wing environmentalists that form part of his base are saying that they don’t want fossil fuel production here in the United States so yes oil is going to come out of the ground but it’s not going to come out of the ground here which is not really going to help climate change because regulations here to produce oil are so much more stringent than anywhere else in the world if you want to produce oil with the least amount of excess emissions the least amount of excess pollution this is the place to be doing it here in the United States no I I agree it seems almost um counter counterintuitive and counter productive to uh claim that you’re going to be more environmentally friendly by going to to these countries um it’s interesting what lobbying I guess can do let’s talk about inflation so uh let’s talk about inflation numbers let’s talk about uh the average American’s ability to consume if we do not tame inflation if we do not move it in the right direction what’s the reality for the average American how’s is it going to impact them well already the average American uh is seeing lower and slower wage growth because of inflation with inflation running at 88.5% and average wag is increasing by 5.6% and that’s just the average a lot of people aren’t getting raises at all uh and then people are finding that their incomes are shrinking they still have pretty good balance bance sheets from the stimulus funds that they saved but ongoing inflation is going to be cutting into their incomes they won’t be able to buy so much and so that is how a recession starts we have to hope that it doesn’t get to there help me understand as somebody who uh again not not heavily uh understanding a finance uh and and your domain of expertise but the recession that could come of this is it lesser or greater than what we’ve seen in the past with past recessions excuse me well no one no one knows Scott in fact we’re hoping that the FED can get inflation out of the system without a recession but if it does it gradually now it might be a slower a smaller recession uh smaller negative growth rate than if they left it to double digit inflation it’s always easier to attack inflation in its initial stage especially now with the supply chain problems if we can solve some of the supply chain problems we might only have to deal with 4% inflation which is only two percentage points above the fed’s target which is 2% inflation so I talked about energy prices how the preser could help get those down he could also reduce the price of Commodities by taking off some of the tariffs we look at steel and lumber we still have tariffs on those from the Trump era president bid could get rid of those in fact he’s got rid of so many Trump era policies you have to ask why hasn’t he got rid of the tariffs so that’s something that he could be getting rid of he could also be looking at uh wage rates and the cost of infrastructure spending we passed this trillion dooll infrastructure Bill he signed into law in November but a lot of the projects have to be taken have to be undertaken with project labor agreements that means only high-priced union labor can be used and unions are about 133% of all construction companies 133% of all construction companies are unionized so that’s leaving out uh the lowest cost 87% of them so there’s no reason for the president to be uh just allow ing union labor to be building infrastructure in the United States there’s other companies that can be doing it too we don’t have to artificially raise the price of Labor I just want to take a second and thank the HubSpot podcast Network for supporting success story we’re part of the network if you love podcasts the HubSpot podcast network has other incredible podcasts like entrepreneurs on fire hosted by John Lee dumass entrepreneurs on fire is one of the OG entrepreneur podcasts it really Stokes inspiration sh strategies to fire up your entrepreneurial journey to create the life you’ve always dreamed of it has unlimited energy value and consistency the podcast is truly for anyone who wants to learn more about entrepreneurship if you like fast-paced packed with value Stories the show is for you John brings on great guest he speaks about failures aha moments What’s working for them currently if you love podcasts go listen to entrepreneurs on fire wherever you get your podcast and you mentioned one thing that was interesting um so sort of two points that came out of that uh Biden has not removed tariffs on certain items but also the fact that uh he’s that we’re still mandating union labor for a lot of these jobs um the point about tar why would you not remove those if that would benefit why would what would be the purpose as to why you wouldn’t do that it seems uh very obvious that it should be something that should be done if it’s going to help improve the situation yeah yeah it seems very obvious but there’s a populist view that you want to protect Americans you want to protect American workers but now there are 11 million unfilled jobs anybody who wants a job can get one but it’s an element of populist protectionism which again is more politics than economics even though there are far more people who would benefit from lower prices on steel and lower prices on Lumber there are small groups that are very influential who are basically have a say as to what happens and I would recommend getting rid of those tariffs uh and lowering some of those prices of Commodities there’s a lot that President Biden can do to help reduce inflation help the FED out uh I’m curious about your opinion on on uh of course people um were getting stimulus checks over the course of covid and that allowed people to for a while not be working what’s the current state of that and how are we pushing people to go back to work so that they’re not comfortable at home is that still a reality for some people that they aren’t going back to work the uh labor force partici participation rate the share of Americans who participate in the labor force is about 1 percentage Point lower than before the pandemic and during the pandemic many people had to stay home kids were home from school you can’t just go out and leave your kids at home on zoo so we have to hope that schools are going to come back fully that they won’t all of a sudden have a Zoom Day CU that makes parents very uncomfortable very uncomfortable about going back to work if they think all of a sudden that their child is going to be have a zoom day at school so we we need to really fix the school the school problem and make sure that schools are in person all the time so brings tability stability a normaly back to people’s lives right exactly yes yes and I think that what once that happens people are going to be drawn back into the workforce although there are people who are were near retirement who find that they cannot get the jobs that they used to have and that they are unable to go back to work there’re still is a prejudice against employing older workers and some of those might not return they might take early retirement and decide to uh not fully participate in the workforce again now what’s interesting um I think this is an interesting problem another interesting problem to solve for lots of problems to solve for but if if inflation is increasing the cost of living and employers are trying to incentivize people to come back to the office they’re going to probably have to offer higher wages to incentivize those people which will in turn then increase the pressure on inflation if I’m not mistaken so how do we this seems to be almost like a uh like um an a horrible self-fulfilling prophecy where even if we’re trying to inen people to bring come back to work which can benefit by doing so the actions that we take and the levers that we pull to do that are actually going to put more stress on the country so is that something that you would have a suggestion as to how do we solve for that particular scenario which would help people get back to well it’s cool yes it’s cool as the called the wage price spiral and uh didn’t realize the FED raises rates as the FED raises rates we find that measures of Labor demand and vacancies begin to moderate and then nominal and real wage pressures are likely to ease so that works itself out as the FED raises interest rate slowing the economy a little bit as the cost of borrowing goes up then companies cannot embark on some of the projects that they did before uh and uh so that a consequence of the FED raising rates the demand for labor might moderate and that means that uh High wage increases will no longer be as apparent it’s not just wage raises by the way firms are offering competitive compensation packages and that also means some combination of remote or hybrid work completely remote or remote a couple of days a week and that has very interesting concept consquences also for rental prices of commercial real estate downtown or the status of public transit systems which rely on millions of people every day so if you take half those people out because they’re going to work at home what’s that going to do to your public transit system and do we really want to be putting billions of dollars into these systems that are no longer going to be 100% use to their fullest extent that’s a very interesting uh that’s a very interesting effect of all the changes that are going to be made do you have some obviously we can only forecast and look into the crystal balls so much but if you going to uh speak about some of the things that will be heavily impacted you mentioned two there commercial real estate transportation systems with the future of work and the way that we’ve evolved to work from hybrid and work from home where do you think that’s going or what do you think that will affect we’ve all learned how to do Zoom how to do teams uh how to do these different modes and people don’t want to give them up uh fully plus there’s the efficiency of maybe saving an hour commute on some PL some cases more than an hour commute so we can really see certain productivity enhancements in being able to do remote work plus it means that employers have access to labor all over the country in some places all over the world uh so there’s real um uh I I think that there’s a lot of appeal in some share of remote work on the other hand you do learn a lot being with colleagues at the office you bounce ideas off them uh you can work with them better if you’ve met them in person so it’s one thing to leave a workplace and go remote then you know everybody who’s at the other end of the camera but then as time goes on if more people join you haven’t met those people in person it doesn’t work quite as well so I think that what might be developing is this hybrid model where some companies choose to just bring in people a few days a week then this uh provides a better compensation package for these individuals the cost of meaning that they don’t have to pay them as much true and the cost of living in the city may not a job that’s right they don’t have to live in New York they don’t have to live downt they don’t have to live in a major urban area either for for some right exactly yes yeah um and when you you know a lot of what a lot of what is very apparent after speaking with you even for a short period of time is that a lot of The Logical decisions that should be made are not being made because of politics so who are the groups that should be under scrutiny who are the groups that Lobby politicians that people should be watching because everybody watches who’s in office everybody watches Administration But ultimately there’s a lot of organizations that that don’t allow the person in office to operate in the most logical way so who are the people that should be under the microscope so that we can make smarter decisions about where we spend our money how we do business how we uh interact with the world and and also internally what’s your recommendation on that well I think that there’s I can give you an example from the left and and and an example from the right I mean let’s take an example from the right one would think that with 11 million unfilled jobs one would have a more sensible immigration policy that there are a lot of unfilled jobs it would be easier to get legal visas uh for guest workers uh for some Engineers for some positions that were not completely filled uh but no the anti-immigration groups wield a huge amount of power and uh an immigration policy such as Canada has where people get points depending on their skills and these points for different occupations are adjusted depending on the skill mix needed this is something we should be copying in the United States uh but we’re not due to political pressure then on the left there’s environmental groups that wield a very substantial amount of power and they say that that this is because of climate change but it doesn’t really help the climate for example for our entire fleet to be electric we’re importing the batteries from China we have to run the batteries off power which is produced by fossil fuels we’re mining for minerals such as copper and lithium and Cobalt we don’t have enough of we’re driving these prices up which by the way is also contributing to inflation uh and yet GM has announced that all its cars that it sells in 2035 are going to be battery powered electric even though what Americans bought last year was about 5% battery p Electric and of those about 2/3 were Teslas so that Environmental Group wields a huge amount of power also one cannot tell where the funding from these groups come from it’s in China’s interest to have us hooked on battery ped car just the same way it’s in Russia’s interest to have Europe cooked on its natural gas exports and in neither case is it good for Europe or is it good for us we have to be uh questioning as to where the funds where the environmentalists are getting these particular funds it’s a a very um it’s a very difficult problem to solve for because I always tell people you know if you want to make change then you should take action you should vote with with the corporations that you support and you invest in or you vote politically but these are it seems like these are far beyond the ability of the average person to influence outside of exposure op-eds um almost like uh uh a little bit of scrutiny into some of the organizations that impact government right yes we have to hope that the American people continue to behave in a sensible manner which is buying lower cost internal uh uh uh lower cars gas lower cost gasoline power vehicles where you don’t have to wait half an hour to charge up or if there’s someone in front of you an hour to charge up or two people in front of you that’s an hour and a half to charge up your vehicle so uh a lot of Americans despite the tax credits simply are not buying the electric vehicle High um I just want to I have like one more sort of uh segment that I want to go into but before I pivot do you have any closing thoughts on just like open the floor questions that I didn’t ask what should I have asked you about inflation uh or the past two years supply chain that I didn’t ask that uh that you think would be valuable to teach over to somebody no I think that you’ve covered everything I don’t think I’ve covered everything you have covered everything you might want to ask a question about taxes taxes okay so um I don’t so the the US to me is a interesting system because it’s so fragmented because you have all these different states that have wildly different taxation policies now let’s understand see when I look at when I look at states that have the highest taxes I don’t feel like they’re run any better than states with the lowest taxes in fact sometimes quite the opposite when I look at where tax dollars go I look at examples of countries uh like more socialist countries that have higher Taxation and I see Civic improvements I see infrastructure improvements in Europe for example um some of the cities are beautifully done and there’s you can tell that a lot is reinvested but talk to me about American tax policy um why do we not have when we have such high taxes in certain States the same attention to detail the same investment in infrastructure it seems like a lot of it it goes up in smoke uh we we we find that these states with high taxes and the highest taxes in the country are in con icut New Jersey uh New York City California and we find uh that uh people are leaving these states and going to lower tax states so there is definitely a pull from lower tax states and we see a lot of homelessness crime dirt in these high tax uh States and areas so they don’t seem to be doing a better job and it’s always interesting to look at how people are voting with their feet but in terms of national taxes we find that American taxes are lower than those abroad and that people are voting with their feet to come to the United States they could be paying higher taxes in Europe with the say 20% value added tax they could be getting free Health Care Free University very generous pensions but so many people want to come here to the United States why why do you think that is what what draws people yeah people want equality of opportunity they’re not looking for they want to have the chance to uh rise up and they want the chance to uh do well in their jobs in their careers and what’s puzzling is that President Biden right now is benefiting from president Trump’s tax cuts in 2017 uh we have a top rate individual rate of 37% we have a top rate of 21% and President Biden goes out and he quite brightly brags about the number of jobs created but it’s partly due to the tax regime that he is proposing to overturn and raise corporate tax rates to 28% from 21% and individual taxes uh at the federal level up to 3 9.5% so it’s just very interesting to see that he is not uh appreciating the benefits of the low tax regime that his predecessor left and his economy might not do so well uh if Congress did vote in the high taxes he’s proposing now this is an election year Congress does not generally vote for high taxes in an election year so they won’t pass so in a sense he can have the best of both worlds he can propose them knowing they won’t pass and yet he can Pat himself on the back for uh doing some kind of proposed redistribution but uh we are doing very well under these 2017 taxes and we hope that uh they’re going to continue and and help me understand something as well because it seems like when organizations are very large they find uh legal ways to allow themselves out of increased taxes so they find ways to headquarter in other countries and whatnot um so is this whole we’re going to tax the rich and we’re going to uh we’re going to increase taxes for corporations is this all just uh you know trying to uh trying to get the the base on board trying to make people that like the sound of that excited about what you’re proposing does it actually impact significantly the people that it’s supposed to affect well especially since we have multinational corporations we have multinational corporations they produce all over the world if they are going to face high taxes in the United States they are they might be limited to the United States in terms of production for the US consumer Market but they can of course go anywhere else to service their markets overseas so yeah the reason that taxes do not bring in as much as people uh expect or the Congressional budget office forecast is often because uh corporations can make utility maximizing decisions and locate somewhere else the EU is talking about a Global Tax a global minimum tax but one doesn’t know if this is actually going to happen because there are always countries that can offer lower tax rates such as Ireland for example or Hungary that don’t always want to go along with the minimum tax but the minimum tax they’re talking about is 15% the tax that President Biden is proposing for corporations is 28% so one would expect to get quite a lot of leakage from that Revenue as corporations quite legally decide that there are better places uh to do their operations now the the the million dooll question obviously because of your experience I would ask you if you if you were president if you had no no lobbying groups which levers would you pull across the all the different things that we’ve discussed we and there’s a million different ways that we can solve these problems but if you were tasked with solving these problems what are the main things that you would look at fixing and executing on immediately that could solve for inflation that could solve for um uh maybe any any of the items that we just touched on to be honest what are the things that are top of mind for you that you’d like to change if you could well the first thing I would do is have uh a policy of producing oil and gas in the United States and importing more oil from Canada I would restart the key Stone XL Pipeline so that we could have oil from Canada to be refined into gasoline that would lower the price of oil lower the price of gasoline uh I would end the mandates for electrification RO I would just say if people want to buy electric cars they can buy electric cars but we’re not going to give tax subsidies for them we’re not going to mandate that a certain share of vehicles be battery ped by a particular year I would uh I I I would roll back all that I would roll back the project labor agreements for infrastructure construction and I would say to the states that they can use whatever labor that they want to use are for that I would right away take off the tariffs for steel lumber aluminum whatever other tariffs there would be uh so those are the top three things that I would do and now this is um less of a of a question based in in data and logic but I’m still curious what’s your outlook for the next 5 years is it an optimistic one in regards to where we’re going do you feel like the people that are making decisions are are trying to make the right decisions or is it more pessimistic do you feel like do you think we’re going to go into recession and have a a not so great next 5 years well I’m naturally an optimist so I’m the wrong and I realize that I’m an optimist so I’m the wrong person to ask this question but the wonderful thing about the United States is that when there’s a problem when people are on the when our politicians are on the wrong track there’s a correction when some group gets too far to the right too far to the left there’s a correction and there are elections coming in November many people forecast that the Republicans are going to take the house and the Senate so we’ll be in a position of gridlock where politicians cannot do too much harm and they have to work things out and do things in the middle and I think that’s going to produce very beneficial results so I’m I I’m very much optimistic about the United States the next five years the next 10 years the next 15 years I’m an immigrant from England originally and I can just see the vast opportunities that United States uh gives to everybody I love that um and and and generally like your your views are lower taxation less regulation is that more or less the the general ah yes exactly yes yes well cost official regulation yes understood okay perfect okay um is there any other points that you wanted to touch on I I I learned a lot so I appreciate you taking the time but I I want you to just close out with any other things you wanted to go into and then I also would love people if they want to consume more of your work um um where should they go social website other things that they should uh they should go check out right uh well my website is diana.com so uh they can read everything I’ve written on diana.com okay perfect no that’s and I’m a columnist for for where write about transportation technology amazing um okay let’s do a couple rapid fire to pull out to pull out some career insights from you um you can go as in or as as as as short and concise and succinct as you’d like so first question what keeps you up at night right now what are the stressors either in at at a global macro level or maybe in your own personal and professional life what is something that troubles you having lived through the inflation of the 1970s and 1980s I’m very very concerned about inflation and I hope that we’re not going to get to the stage that we did in the early 1980s when inflation was in double digits the first mortgage I got was 15% interest and now people are saying well High mortgage is 5% well I remember when it was 15% so we definitely do not want to go down that path again I’m very very concerned about inflation I’m also very concerned about people being forced into electric vehicles and having to rely on these batteries that are imported from China China is not our friend and we don’t want to be RI in on a source of energy from a foreign power quite irrespective of the problems with range taking half an hour to recharge or people not having battery chargers in their homes you might if you live in a Suburban house but you don’t if you live in an apartment block and you park your car on the street so those are two things that I’m very concerned about if you had to uh pick one challenge that you’ve overcome in your personal or professional life what was that challenge had you overcome it what did it teach you so my challenge is that I don’t really like shooing and cocktail parties and networking but this is very important to to to to to getting ahead so if I’m invited to an event I would much prefer to spend the evening at home reading but I have to force myself to go out to these parties and meet people and I mean even people from uh uh different different administrations cocktail party type settings so I would encourage young people or anyone looking for a job to go out there and socialize because you get new jobs by networking I got my job in the Reagan Administration cuz someone I knew uh called me up and said Diana why don’t you come over and do this job I’ve got other jobs for the same reason uh so you have to force yourself to go out and be social I’m not a very social person and I’m not very good at cocktail party conversation uh but networking is very important and I’ve had to force myself to do that if you uh had to pick one person who’s been incredibly impactful in your life who was that person and what did they teach you I would say uh I would say probably my father who is a transportation Economist and engineer and he uh not only uh was very knowledgeable about economics but he is a very kind and uh gentle person he always treated everybody the same when we came into his office the security guard would know him he’d know the neighbor of the security guard his kids his wife etc etc so I would say that he has been very impactful in my life if you had to pick a a book or a podcast something that you’ve consumed that you’d recommend someone uh an not someone who’s listening go check out it’s very important to read read for pleasure it’s a really excellent way to relax and I have very much enjoyed the works of Anthony trola who wrote uh many many books uh they provide a window into the 19th century he had a job in the post office in England but he would write from about 4:00 a.m. to 9:00 a.m. and then he would go do his job frequently on Horseback uh as a post office surveyor he was actually the person who invented the letter box the red letter box that was so iconic in London uh and I would highly recommend uh his books uh if you could tell your 20-year-old self one thing what would that be um I would tell my 20-year-old self to uh to finish that Oxford PhD that I left with just a little bit remaining and uh finish up that PhD and I think that would have made a big difference in my career instead of leaving with an M fill rather than a dill well you haven’t done too bad for yourself regardless um and last question what does success mean to you oh well success means having a good marriage and a good family and a place to come home to at the end of the day so you you’re at work you have to fight for your beliefs you have to stand up uh for different things at the office you frequently encounter people who are not nice to you who you have to be nice to but then you come back uh and you have a family and this is a much more important than the different jobs that you’ve had and I started off earning a very small amount and I’ve had different career changes where I’ve had more important positions but the amount of money I’ve earned has not really affected my happiness the most important decision people have is who they’re going to spend their lives with who they’re going to marry who they’re going to have as a partner and I’d love want to say that I’ve never met someone who said they had too many children I’ve met people who have regretted not having children but who said they’ve had too few children uh but marriage and family are really the foundation of happiness oh [Applause] [Music]

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➡️ About The Guest

Diana Furchtgott-Roth is an American economist who is an adjunct professor of economics at George Washington University and a columnist. She served as Deputy Assistant Secretary for Research and Technology at the United States Department of Transportation during the Trump administration.

Her illustrious career spans senior roles in the U.S. Department of Transportation, U.S. Treasury Department, and the White House under multiple administrations – a testament to her unmatched expertise. Furchtgott-Roth is a sought-after thought leader on transportation, technology, and economic policy, sharing insights through her prolific writing, Congressional testimonies, and sought-after commentary.

➡️ Show Links

https://twitter.com/DFR_Economics/
https://www.linkedin.com/in/diana-fr/
https://dianafr.com/

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➡️ Talking Points

00:00 – Introduction
02:12 – Diana’s Journey
04:06 – Diana’s Impact in Economics and Politics
05:43 – Working Across Political Lines
07:02 – Healthcare Systems: US vs. Europe and Canada
12:53 – Causes of Inflation Today
19:21 – Untapped Natural Resources in the US
20:24 – Inflation’s Impact on Americans
21:47 – Future Recessions: How Bad Could They Be?
23:57 – Sponsor: Entrepreneurs On Fire Podcast
24:55 – Why Not Remove Tariffs?
26:12 – Getting People Back to Work
27:55 – Unraveling the Wage-Price Spiral
30:25 – Changes in Work: Impact and Outcomes
32:32 – Lobbyists and Political Influence
36:51 – US vs. European Tax Policies
39:27 – Why the US Attracts People
43:05 – Diana’s Solutions for the US
44:54 – US Outlook: Next 5 Years
46:42 – Connect with Diana Online
47:19 – What Keeps Diana Up at Night?
48:51 – Diana’s Greatest Challenge
50:01 – Most Influential Person in Diana’s Life
50:44 – Book and Podcast Picks
51:37 – Advice for Her Younger Self
52:06 – Defining Success

➡️ Success Story Podcast – Stories Worth Telling

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Welcome to the Success Story Podcast, hosted by entrepreneur, business executive, author, educator & speaker, Scott D. Clary.

On this podcast, you’ll find interviews, Q&A, keynote presentations & conversations on sales, marketing, business, startups, and entrepreneurship.

Scott will discuss some of the lessons he’s learned over his own career, as well as have candid interviews with execs, celebrities, notable figures, and politicians. All who have achieved success through both wins and losses, to learn more about their life, their ideas, and insights.

He sits down with leaders and mentors and unpacks their stories to help pass those lessons on to others through both experiences and tactical strategies for business professionals, entrepreneurs, and everyone in between.

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