would create 1.4 million jobs and reduce the federal deficit. who like this that make sense with the horatian reform? >> we have to attest to go further than the dream act i look at martinez who lives up been around lake with the "state of the union" address embodies everything about the nation so i do believe we have to move forward with comprehensive immigration it cannot just be the dream act that is one part but it is a communitarian issue national security issue also and economic issues were do believe we have to work to make sure those 12.5 million people can come out of the shadows without fear they will be ripped apart. >> moderator: how do you convince people. >> we are working right now to convince my colleagues to

talk about that she military and issued for their district and is one of those things we have to step up the sacred military in with national security to move forward with the immigration reform. >> moderator: mr. schneider? schneider: yes. i would pick comprehensive immigration reform who to take care of the dreamers to make sure we secure the border i was proud to produce this in the house as a companion to the bill that passed the senate in the same year. and the republicans then dollhouse outlaw any immigration reform i do believe that this legislation came into a vote would pass overwhelmingly. i only support a person for speaker of the house promises to the nation in pledges for comprehensive

immigration reform. and i thank you should do the same. dold: and above to respond. and to have that partisan attack this is not how we solve problems or the education bill or highway bill or solve to have doctors taking care of seniors. so that is with bipartisan support and it has endorsed me to put the country first not politics systemic cost of a college education has estimated more than 40 million americans have $1 trillion of student at and then that slows the economy. what is to be done about this situation should the

government be more involved. >> absolutely we have to make college more affordable and the cost of college increased over the last 30 years putting that further out of reach for too many families. i had a hard fight to raise interest rates. i worked with legislation to allow students after graduation to restructure those lawns those who work with teachers or urban communities or doctors into help pay them down there stallone's. but we have to reduce that and then to make the first two years of higher

education free. >> how do of for that? >> there are ways and we are giving subsidies. so let's work together. >> congress mandel, . >> to cure cancer education is the key to solve poverty and education will be the key is to look at higher education did is something that i run on to make sure when we reduce their student loans ultimately at one plant $3 trillion, i offer that piece of legislation to pay down the debt faster. and to help with retirement so this is what we can and should attract a five but not just about college but career education as well.

those who want to become a skilled welder or carpenter to make sure those opportunities are available. it is out of sight to many believe in his or ultimately the economic viability long-term. >> moderator: should be looked at higher education as well? >> but we have 600 our a hundred thousand jobs going on every year. with trade schools in committee colleges to provide those skills nemesis they need. with those veterans coming home from the war specifically tailored to the manufacturing environment.

allowed them to use their gi dollars for apprenticeships is. >> moderator: now this is the point of debate today will have a turn to ask each other question. , you will get the first opportunity in the have 30 seconds to ask a question and he will respond. dold: every editorial board took the step to ask the voters to send you home to replace them with me. mac groups across the spectrum from the gay rights organization to the "washington post" calls you out to lying to voters qc war a small-business owner and voted and small business 70% of the time. and then voting with nancy pelosi so how can they trust anything that you say? schneider: you have been distorting and lying about my position as the entire collection and iran is the

perfect example. i saw there were gaps to make it harder to enforce with the already dangerous and chaotic able came out last year but in spite of our opposition it hasn't changed pet the iran deal is a fact the sanctions we have been providing to the rest of the world. you live you take the same position as donald trump so walkaway to leave them on the threshold of the nuclear weapons. and to their region is for iran to get a nuclear weapon. and then to leave iran on the threshold. >> honestly didn't tell them

how to be trusted. is not being very transparent because he has not released his household tax returns and done what he is hiding he is called out by the media to exploit a loophole of campaign finance t tries to get rid of those laws but with 30 times the of legal limit to bring that dark money into your campaign. this cannot be trusted. schneider: and i think we can all agree leading to this scourge of gun violence of the no-fly know by bill legislation on the cannot walk into a store to buy a gun using to sign a simple

petition to bring this to the floor to a vote? and mental abuse and we haven't is able model law that while bond to sign that petition greg. >> with regard to the violence what is interesting to me is the of legislation he is talking about i co-sponsored by first got to misstates congress and co-sponsored when i return to. but when mr. schneider was there the same piece was offered he did not co-sponsor this piece of legislation. i work with bob kelly on a bipartisan compromise to move forward on the no-fly know by move forward. we don't need that vote people are dying in our communities today and frankly it is an unacceptable meanness had 3500 shootings in chicago alone this is a political the solving a problem the only way we will solve this is by building a bipartisan

consensus that i had demonstrated the ability to do with members on the other side of the aisle. but don't take my word kathy gifford when did they were spreading the allies say i was the champion for a bipartisan solutions. >> these are political floods - - votes. all they're asking for is to allow the legislation, and to the floor for a vote did you continue to block it. my taxes are on the internet you can find them. every single goal page is there. lettuce know where we can find yours. >> moderator: you talk about gun violence so let's get into that topic deeper. debt issue of national resonance no place louder

than in chicago. that there are 13,000 to you think there are different control laws silicon grease can do to make the country safer? >> there are things that we must do and frankly that is why we are working in a bipartisan way to reduce gun violence. one of the things i try to do is try to say where is the common ground? is that we all want to reduce gun violence what is happening in the streets we just had 600 homicides this share is unacceptable so i try to work to make sure we have universal background checks the no-fly know by legislation again keeping guns out of pain and tears is what i support also

domestic and users can now purchase a weapon because if there is a weapon involved the chances of death of up five times so why go back to what i set the beginning. we need by partisan solution >> isn't just a political issue but a personal issue what my family member were shot four times in than waited for him to die. the speech at a game was about gun violence. they have to make sure they have 100 percent background checks with the large capacity magazine. so it is and just restricting the access to guns but of those 30,000

people who would die more than two-thirds will take their own lives. with the economic challenges i was brought to introduce comprehensive gun legislation that dealt with access to mental-health manteca comics because the republican speaker ahmad allow that. >> moderator: talk about mental health. >> ultimately in the congress to make sure they brought mental-health occasion the first piece since 1962 this is impacting every corner of our community veterans are losing 22 per day to suicide. we have to recognize mental

illness is a disease. look at the cook county jail largest health facility in a country that is a problem 100,000 beds short and 30,000 physicians shore. >> in 19605 workers idea plant to protect social security and medicare quick. >> not just for this generation by all generations to come. as part of this social contract as they live below the poverty line today for coho but how we do that matters we cannot put the burden on those. my opponent was to raise the retirement age to put the undue burden in the low end, brackets with the life

expectancy of 76. three years before they can retire. >> moderator: what do propose. >> we have to address the caput 118,005 believe something making $1 million to pay the same rate as their employees to make 50 years 75,000. we should not raise the of mandatory retirement age but for those unable to work longer they can do so. we should not privatize social security. >> moderator: congressman why should we increase cost-of-living as part of the solution quick. >> we should. social security is something that people expect to be there but when i talk to young people they don't think they will see any. one of the things we can do with this congress is extend disability security

insurance that when it is set to run out in just a few days we could extend that but make sure social security is around for future generations not just those that in the system now. and we need to have a bipartisan solution to focus on everything on the table to make sure it will be solvent at least through 75 years of that cap was even raised at 127,000 and it may have to go up from there i will not take things off the table the someone who sits on the ways and means committee you want me there. >> time is winding down its remove to the closing statements. schneider: again did is an honor to be here i am asking for your vote november 8 i want to continue the work we started endophyte that matters here at home.

i am proud of my 100 percent record fighting for women's rights of the national organization of one and i'm proud to the fact to champion the environment to make sure a legacy that is worthy that is why i am happy to have the endorsement of us hear a club also my voting rights record fraud to continue to make sure we grow the economy everyone succeeds not just for those that the top this is the most important election of the lifetime and asking for your vote november 8 to continue to work for you to protect the legacy going forward. dold: this will be a critical election those that will break through the

gridlock that is why every single non-partisan organization ranks means the congress they have endorsed me over my opponent because there are big differences between the two of us skylark to come up with solutions to take a partisan approach. that is a response for about every problem that we have. we need people who put country first if we really accomplished things so this election will be important but more important to continue to fight a one-year behalf. >> moderator: thanks for being here. with the kennedy in the tenth congressional district banks for joining us and please remember to get out

and vote

>> moderator: our focus today is a hobby contested congressional debates on the ballot the race for congress in the 26 congressional district westchester to key west about eight dozen people down through the everglades national park currently representing the district is a republican finishing his first term in office now running for another garcia represented this district 2012 through 2014 now running as a democrat and is back so let's go through the ground rules very quickly if you

should make aid disparaging comment you will have the opportunity to do so but we will begin with the representative curbelo. you said months ago that you did not support donald trump and the still hold that position quick. >> that's right. i took a principled stand along time ago not because it was politically expedient but what i believed in my heart and they believe that this campaign for president the lot of people are turned off from my generation some did not even want to vote i tell them allowed to vote any expression on the ballot is worthwhile but that is my position i did not support either candidate if they deserve a lapdog board cheerleader and. >> were you right in the

name of somebody greg. >> 26 it down to felt the ballots are at home we have the open boat but we will. and that is a personal decision. to have the tromps supporters and a lot of people. and everybody has to take that best decision. >> moderator: mr. garcia as strong hillary clinton supporter she gave you a nice shot out last week had a rally is anything they would not support? garcia: thanks for having a san to be here. it is the pleasure to be here and that is what this is about. into cnn the square of

american public policy and this is a record of accomplishment in a day after the election and think that would be a frightening day. live was sent earlier supporter of record of to be within american politics negative glad to call for a friend. >> moderator: on serious issues does that polling really matter? the first is the economy and employment is considerably down. fewer people are being in poverty but yet there is a sense of moneys in this district and what would you do boosting the economy in the 26 district quick. >> it is important to invest in america and what we have seen with the republican congress is not willing to

invested aristide's or infrastructure. this is what moves our kids out of poverty cyanate great believer that makes the great difference to the country of 280 billion of infrastructure $200 million to millions of dollars for water purity and technical assistance. with interest rates on student loans is essential to move the country forward. >> moderator: but last week we saw the budget figures and congress ended $587 billion in their bed saying every dollar that they spend as bar code so

where does the money come from? so if they vote against taxing the very rich but there is a huge deficit difference between investing in deficit spending in the country increase the value to reduce the deficit. >> moderator: / the congressmen to respond to. curbelo: i don't have to tell you what i think but i will waterloo have done i ever took republican sen democrats on two major issues that are very important for our economy. there is great economic insecurity have those graduating from college and

day with a four year degree you -- they get the job of places that don't require a college degree. we have four kids that spent four years in college then graduate and now they are working in a restaurant which is fine except for the fact that is not what it went to college. then this is mike committee on educational work force we passed a bill that promotes different pathways to success. one of the big challenges in this country that we trap that the system that is unnecessarily for them retell them you have to get a four year degree battle lot of kids don't want to they want to take a different pathway to success. me to set them up for success that is critical to

the economy to the different ports throughout south florida. and team tonight to negotiate trade deals with the allies we were can converse and that can lead to more wonderful third - - more quality paying jobs bank to support tpp quit. >> support the concept but anybody who lives in south florida and is against free trade and that is one of my frustrations of the presidential candidates they are both against free-trade. that is inserted progress so many good quality jobs for small businesses that depend on free trade in this area. we need local trade they do need to be negotiated in a

responsible way absolutely but to be against trade in south florida is to be against jobs. >> moderator: mr. garcia? garcia: not as presently designed i am a believer of fair trade not free trade for all these trade deals have very strong provisions of the half to hold them accountable whether labor or environmental standards. that is why i am the big believer into before the teepee and as we are racing to the of bottom with these trade bills we only hurt the country. >> and we have seen people

vented the summer to be no longer productive. but this district is one of the great agricultural resources we produce more winter crops and anybody in the country. in terms of agriculture so absolutely made to enforce these provisions to make is -- make a difference for the work force. curbelo: this is a critical issue of course the political winds are blowing it with trashing and trade so many south florida families and under any circumstance cannot turn my back on these policies because they make our community more prosperous.

people from all over the world come here but don't be fooled about trade. the surgeon may be cannot turn our backs on trade. >> but we have to. we need someone who will work with the white house to make a difference in has a history. we know the next president of the united states. >> but november 8. >> we will be back in just a moment. >> given the midst of a debate in south florida down through key west. we will see the republican i have heard you that they

have described you as a moderate republican. so the other day mr. garcia said he is no moderate he is a metamorphosis because the district lines have been redrawn so now it is slightly more democrats than republicans but really you are a conservative in sheep's clothing. curbelo: he has a long history of launching these attacks analyst and the same person you know, me to be on the school board as a consensus builder. i have my ideas but i know had the end of the day what most people want is republicans and democrats to come together and i have

passed seven bills as a freshman that is very rare. he passed one to name a post office. i passed bills on transportation in the environment and education and have done that by working with my democratic colleagues. live did not jump into the race to jump did that statutes of limitations. >> is immoderate generally speaking? >> the only a moderate is the reality someone who

voted for that waiting period summon u.s. consistently voted and raising goal gun-control bill. to defund planned parenthood. there is nothing more moderate except the district changed before representative curbelo was moderate the only difference is that donald trump decided ever record. this is a majority hispanic district that would have changed the lives of over 100,000 people in this community. and make them pay taxes. >> there is a litany of attacks but this is all live.

ages six and four does anybody really believe that? i respect women antidote. first of all, you said she was stupid because she think very highly of yourself and then that you want to have sex with her because she could not seduce you of one everyone to think about the with been up there but also the men who are watching think about your monitor sisters imagine some guy in the room to say i would not want to have sex with her she can not seduce me but i will hire her anyway or disrespectful. you should apologize today. >> everything you just said is completely false. >> we will let the people at home this was recorded

secretly in key west at the event mr. garcia held so we will broaden the little clip that was recorded secretly. >> >> so what were you talking about perhaps be mcnair's stupid. because i was saying sexist things about her someone who is extremely competent and they were extremely competent time and again that we should have mike pence at the top of the ticket to make women all the

way down to abortion. made women wait 24 hours after. this is clear and then to make a difference. >> he combats sexes them with more sexism by would have said i have two daughters i married with esa is offensive and the way you said is offensive as the husband of a wife i find that offensive. >> into talk about the issues. >> key is against choice we will get you to explain.

♪ >> let's just get this on the of record where do stand greg. >> the one to apologize i think we have to tell you all he might. the value of human life lead to respect the law and what we should do is find a consensus. that is why support legislation is a period of time after which doctors and experts believe that there should be no more abortions if they can feel pain. by the way we have to the girls.

every abortion is the tragedy. >> this is one of the most intimate decisions that government should not get involved. in this tragic so to stop the woman to, have an abortion after abuse or rape is dangerous so when you think about women and health care someone that has voted several times to repeal or rollback without replacing obamacare the first thing it does not discriminate this is a health care provision.

>> >> what about obamacare? you voted against it? >> at the very least it needs reform it is failing a lot of people. people complaining saying that they did sign up to a for a the high deductible to show off those that are insured for those that don't want to talk about the number of people that have access to quality health care those who sign up for obamacare they conducted the emergency room just like before. period it wreaks havoc in the economy and the employers are struggling

with it they have limited workers' hours. it was done in a way was written by hospitals and health insurance companies and by big farmers designed to protect their interest. >> bottom line don't be peeled but improve. >> if we can replace it with something better to put patients and doctors in control though it is not a laughing matter. >> but the republican leadership is a talking about replacement eye and a stand if medicare had the problems he believes it is a ponzi scheme it is on the record to say that that this is a law that is changed lives for the better for millions of people think about jackson memorial hospital because of

obamacare to date they are reaching out but now only have to do point emplace just like the expansion of medicare. with the system to make a better. >> key likes to talk about this he proposed a solution. >> plus 60 security in medicare if we do nothing we will not keep the commitments that is a statistical fact swire proposed, reforms to make sure those that need them most get the most benefit even with the single change this is very dangerous them by the way he got nothing done in congress because he cannot work with others.

>> is and know how to work with others. >> moderator: before we run out of time just briefly i have to ask you waterloo to do said bill that brought the distinction between cubans to come here to where migrants and those who are political refugees. why did you introduce that? there has been tremendous fraud in the system. >> exactly. but this is a generous country no community knows that more than the cuban community if they have been hard-working people and for political reasons they ever being persecuted now that problem today is every cuban that comes to united states gets welfare benefits for direct cash payments some of

these people qualify for benefits seniors who arrived from cuba get a social security for life despite never having paid into the system some of them get more this house to be reform so that if you are a refugee will deceive the benefits but if you come here and you get a work permit me cannot allow for the generosity to be abused by anyone. >> i am the first to do about we both know that south florida nbc's haitian and cuban refugees every year.

>> with these refugees say get the benefits also. >> i know they want to follow but let's be clear. what is important to reform the relationship with cuba. keep place people against each other and the first to say we need to reform the we have to reform them emission shipped with cuba. there is no community on earth to benefit more. to move the country for word but that requires a serious look. i and green there is abuse.

>> moderator: now we are at the outer limits of our time i want you both to make a closing statement. >> i think from trump through representative curbelo we are tired of the attacks with a record to stand up with this community whether hundreds of millions to invest in the economy to stand up against the deadlock palm the brady campaign about what is clear is working with the people of south florida and in god's favor we will go back to washington so they have a felice. >> this is the roll-call published on capitol hill everyday these are the numbers embroiled in scandal and corruption in be indicted and convicted he

gave this community terrible name for the past two years have been working on cleaning up our communities. >> deal, from that corrupted district because that perpetrated some terrible crimes and it is a shame and every day i have worked with republicans and democrats whether transportation or education of these independent groups to have consensus on this issue and that is what i think every voter ultimately once. we think everybody once republicans and democrats to come to gather to solve the major problems of our country. >> moderator: a feel compelled to point out you

were never charged. this is the end of this. we will see what happens november 8.

>> from [inaudible conversations] spent good morning thinking for being here bad ae i. since the end of the great recession and many economists believe we're in a weakness in the rate of growth with the gdp leveraging has grown weaker because it was accompanied as we are about to enter a

period of useful and transforming event technological change to have economic policy with the obama administration and the fed are we in the period of secular stagnation and brought to the mainstream policy debate? as important to diagnose that problem to look at slow-growth. ai is honored to have to giants of economics training as. somniferous secretary of the treasury during the obama administration served on the economic council. in chief economist of the world bank. and the inaugural visiting

scholar from the i and we're honored professor from economics at harvard and a columnist for business week and a contributor to the wall street journal did we will be moderated today from one of the top economic journalist in the world he writes where previously u.s. economic editor. the format is very straightforward and then we will dive into a discussion for those cities that are watching the live stream through technology somewhere upon the stage feel free to do that as well.

>> thanks i will start with a few comments. >> i want to say a few things about those topics mentioned. generally is accepted that no recovery with respect to gdp growth since the end of the great recession 2009. you have to grow for some period of put above-average rate that is not happen for this period and in terms of getting evidence i rely mostly on the research of the largest oppression in history sometimes called a rare economic disasters and the analysis after extreme

disastrous defense typically it will we coupon of what is lost on the prior downturn. and is a rapid recovery ended is the contention be having had a recovery since 2009 because of the severity i think the evidence is the stronger the downturn the stronger the recovery? talk about the financial crisis in history most of the non more depressions' involve the financial crisis the ec a pattern as what i just referred to. the great depression is an example because there was a

downturn for per-capita gdp followed by growth six and 1/2 percent per year. despite of financial crisis. >> but the big surprise to me of the recent period is the labor market has been pretty strong the payroll employment growth has grown in almost 2 percent per year which is a pretty good performance of the labor market looks pretty good and that man forces that picture the the combination is growth which preyed the labor market performance in fact, that growth rate is

close to zero but may have started earlier in your 2004 but to think about that weak recovery and a focus what does that influence of labor productivity? and naturally think of the forces that are supply-side have a tough time telling a keynesian demand story to enhance that productivity growth. so i get more from that empirical growth rather for those that are good for growth with the rule of law and property rates some kind

of public infrastructure to the extent it enhances productivity education and health with the efficient taxation they work to encourage investment and in turn enhance labor productivity. look at what was done in terms of policies the biggest thing in the u.s. with the dramatic increase but that total at the federal level went up from about nine to 12%. following that there was a small decline so if you look at the components and that fell dramatically with the extended federal benefits

other parts of state permanently elevated especially the permanent disability medicaid medicare food stamps all those programs have a permanent increase of gdp in the terms of the reaction to the recession. of that larger transfer payment and i thought labor productivity was the and they're main policy is the monetary expansion we can argue but don't think it would be centers stage so what is it that explains that productivity slowdown with those interesting ideas?

with that decay of permit infrastructure with the technological progress but the investment gdp ratio fiscal uncertainty i know how to pick what is most important but there really is the explanation that has been raised with the gdp growth is understated without proper adjustment as the eiffel and is raised as an example of that. that really not need any special policies. and with those recent discussions with the ongoing campaign those that focus on trade and immigration restrictions hire minimum-wage idol think any

of these are good for productivity with economic recovery and growth by would be too pessimistic to that commission report without long-term pattern of respect and in terms of washington policy making bob. >> of fair amount of what he said that i agree with. recovery has been very slow since the trough of the recession. and it is a rollover what have predicted running

through 2007 if you look at gdp from 1929 through 40 in the best guesstimate through 2019 with the working age population that over the 11 years period that we have just bend third gdp has behaved about the same. them with the current episode to come up ending just about the same place.

robert is right did you attempt to decompose the slowdown into employment and productivity is much more on the productivity side bet on the employment side. >> with no emphasis on the role of demanded all of this. i did think we have substantial issues there are some substantial issues in their vb some prospects in the united states but the best single way to measure expectations is by comparing the yield of the index bonds.

if you make that comparison and the adjustment of the fact it is the consumer price index to targeted different price index you get that expectation in the united states to be below 1.5% over the next 10 years and having fallen short of the targets over the last seven years. the same time you get the bond yield for interest rates that has something to do with supply and demand for capital at extraordinarily low levels. and even larger extent to be

in excess of savings over investment that is constraining behind in my view has contributed to the relatively weak economic growth over the last seven years and leases with a serious prospect problem with 20 percent probability going into recession any given year and for the fed to cut interest rates by 500 basis points. and likely to be a recession and long before for the fed to cut interest rates. pdf so without denying there are large challenges on productivity bottles of

substantial issues on the demand side as reflected to the nominal gdp. and this seems to me it is not huge leap plausible to have a very major deterioration over the last eight or 10 years. is seems to me the argument that somehow this est. period divergence for regulation needs to confront those observations corporate profit shares with the related observation but during the period of these burdens were imposed.

and with the supply-side and then went to promotion to the public and private sector and i would just emphasize is seems bizarre that that the cost has never the lower 15% between the ages of 25 and 54 that the nation has the lowest rate of investment into new generations. relative to gdp. and to increase the infrastructure and to engage

of directed to improving with sap procurement and the streamlining and execution with that infrastructure investment. and there is a case even without believing bad regulation essential to understanding. . .

only a fool would put a sign on the library door state no amnesty now but we are thinking of one next month. [laughter] now think about a nation whose corporations have $2.5 trillion in cash abroad and who have to pay taxes at a 35% rate, bring the cash back into the united states, to tell those corporations there is no amnesty now but we are having a tax

reform debate and we might have one next year. hard to imagine a better propulsion strategy than that and so surely bringing clarity to the corporate tax reform debate and resolution from my perspective is best done through a significantly broader base and significantly lower tax rate, neutral taxation between the foreign income and income repatriates and greater international cooperation on various forms of prophet ship but in some way bringing clarity and resolution to the tax reform debate seems to me the single most important thing we can do to encourage private investment. i don't know, i agree with robert on the importance of

productivity. i focus on public and private investments because those are things i'm. confident are important and i'm. confident we can set and there's a great deal of productivity where the interconnections are puzzling. i would frame one aspect of the comment slightly differently than he did although i'm not surprised that he would disagree a lot. that is i would say i think the evidence is overwhelming that productivity is undercapitalized. leave aside information, leave aside information tech knowledge and just think about that or other pharmaceuticals that have a huge impact on life expectancy and where rear flex almost no productivity improvement. but from the point of view of economic policy, it rarely

matters in most of the things we are discussing, it barely matters productivity is understated by a constant 1% or constant 1.5 or 2%. the interesting question in terms of explaining the data would be if the magnitude of the underestimates has increased and their a think a fair-minded person has to be much more at gnostic in assessing the data. but agnosticism about whether the underestimate has increased should not be confused with agnosticism about whether there is currently. >> thanks very much. to all of you watching on mighty quick reminder. we would love to hear from you so just go on line and enter the code aei event. type in your question and if you are lucky i will figure out how

to use this technology. and i will get around to asking it but before that happens i'm going to have a few questions of my own. i want to zero in on a question which is in convertible. if you go back for five years ago and what i think is interesting is this is not a united states phenomenon. the global phenomenon. when the imf looked at their forecast they found their forecast for most of the developed countries have systematically been overestimated and growth has been weaker but their employment forecast is underestimated. if you look at a country like the uk which has underperformed every other otc country on gdp. we know if productivity is a problem and what we don't know is why. there's a healthy debate of whether it's a demand problem or supply problem and i demand we vestment is weak and reduces labor productivity. we also know productivity begin

to slow before the recession and that's on the supply-side. like to hear you both way out by the think the productivity story is a demand problem or supply problem. >> the pattern that you mentioned which makes me emphasize the role of aggregate demand in the current situation in the u.s. and elsewhere because you have this pattern that you describe where gdp has been underperforming in the labor market is pretty good including unemployment growth. that's not the typical response to the economy from insufficient aggregate demand. you would get that typically in the labor market at least not in the models i'm familiar with. that's the pattern that motivates me to think about what matters in productivity and that's where and up emphasizing the things that look like supply if side policy as you describe.

it could be of course as you suggest some of it could be working for investment. there are some recent papers that break down the trend in labor productivity and how much of it is related to reduce capital formation and reduce capital formation does play a role but not quantitatively that large. i don't think it's the main part of the story and then we were left with a lot of other things, some of which might matter for productivity growth. i also agree with what he said about measurement error. the case for the existence of measurement area is strong. people who talk about the iphone also claim it's becoming much more of a serious issue than it used to be but i'm agnostic about whether that's true. i'm sensitive about what you mentioned about -- i've had this ongoing agreement with my doctor about whether i should be taking

it and they have a formula. it completely documents how old you are and to get beyond a certain age it's going to say take it. now i was forced to do it but i was kind of your tainted. >> larry, demand or supply? why is productivity so weak? >> you will have to explain to me why the formula is. >> it seems sensible to me. i have written what i have said about secular stagnation has emphasized the demand side. i don't want to be heard suggesting that there isn't some mystery on the supply-side as well. i think there is a fair amount

of evidence that there is a kind of inverse law that applies where lack of demand 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's more difficult to think about a range of things during recessions, the development of reorganization and the like that represent a kind of unmeasured investment and are sacrificed during periods of investment. during periods of downturn, so i think i would need a bit more

inclined to attribute more of the productivity shortfall to the consequences of the downturn on the demand side then robert is but i would agree with him that there is a puzzling pattern of surprisingly bleak 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 that 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 towards higher prices as lower

productivity growth reduced business unit cost to the path you would expect so you'd expect to see inflation surprising on the high side and i think you might also expect to see prophet margins squeezed a bit. there is something odd about a productivity slowdown that goes with disinflation and goes with a significant increase in capital share. the disinflation in particular leads me to think a little more about the demand side. after all it's the oldest bit of economic reasoning that when the quantity of apples goes down and

you are trying to figure out whether it's demand or supply you look at what happens to the price and if the quantity of apples goes down in the price of apples goes down you tend to think of something is going on on the demand side rather than on the supply-side. and you also have the puzzle of rising profitability. two ideas that haven't been mentioned yet are out there in the discussion that may be relevant to all of this although i don't think the evidence is overwhelming, well sort of overwhelming are the possibility that the level of power has increased in the economy which account for a rise in prophet share, would account for the

willingness to invest and might because of output restriction contribute to reduction in competitive pressure contributing to a slowdown in productivity as one hypothesis which i think is worth exploring. the other thing that i think is worth exploring for which there is substantial anecdotal evidence including i have to confess for my own behavior which is that one aspect of the internet is the people at work spend less time working and more time being distracted. if in effect we are now mismeasuring hours of work because there are more hours of leisure that are called hours work, it would tend to explain

roberts anomaly of employment strong and productivity week and there are you know people, but everyone 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 the hypothesis of this hypothesis. >> larry has mentioned a couple of times that pattern where you see low inflation, low interest

rate, weak investment particularly private investment. my conjecture and i'm not certain about this as a common source of all these things is the idea of elevated advanced risk and that was particularly reinforced by the greek recession in 2008 and 2009. what that would do of course is dramatically lower the real rate on safe assets because there would be a quality kind of idea. it can explain maybe low inflation despite dramatic monetary expansion because of the willingness to hold staggering quantities particularly depository institutions holding or marker ball amounts of excess reserves at the federal reserve and of course going along with weak investments. even though the cost of credit looks low in terms of real interest rate the underlying

force which is a higher disaster would shift back investment demand so by conjecture this is a key element in this explanation. i don't have this completely certain in my mind. >> look, all views have anomalies so i don't want to be completely dismissive of robert's view but i think it's a difficulty with that line of thought it seems to be as 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 and it would be more likely to say the price is abnormally low then it would be

to say that price is abnormally high as certain periods. so i think i would be, what would convince me that you were right would be some evidence that the price of buying a security where you pay essentially the price of the following financial market. i give you x today and you give me a thousand dollars if within the next three months the dow jones average has fallen by more than 5000 points or fallen by more than 30% and it's my understanding that you could not make the case that there has been a dramatic increase in that price. certainly over the six or seven

years since 2009 and 2010 that price has dramatically declined. that's why i think it's difficult to make that case and particularly difficult to make that case in explaining anything that has changed between 2010 and 2016. >> i'm really sympathetic with that argument along the lines that larry just said. the price that he is talking about pete's dramatically in 2009 and it's much lower now than it was then. it has however actually come back up a bit from where the bottom was in between their but that force is exactly why i'm hesitant. >> look, robert lit stood the other way. if things were terrific, if we had a terrific seven years you would be explaining that

unlikely disasters look phenomenally likely in 2009 or 2010 and the broad trend was for it to be way down from 2009 in and 2010. >> really? that's why i'm hesitating about pushing this. that is a major discrepancy wage is highlighted. >> i want to stay on the supply demand issue for a little while. robert you mentioned you take staton's. the rest of it should be happy because it is kept to protect you it. when the supply-side factors that as i work his demographics. 20082 big things happen in this country. niemann failed and -- started collecting social security. this is another thing you see across the entire world so it probably can't explain the synchronized nature of the slow this about the demand. populations are aging or for worse or you have a growth in

their changes to companies that are less likely to invest if the company base is shrinking and their workforce is shrinking over time. larry yesterday you were citing the working paper that suggests demographic factors explain all the trends in the gdp growth in interest rates since the 1980s. it's a pretty persuasive bit of evidence. if that's right is there much we can do as a policy matter to change that other than tell people to have more children away for 30 years? >> let me just clarify what the effects of demography are and the things i'm about to say about policy i was expecting would not agree with what i think you will agree with these analytic observations. the first effect of demography is as the police -- population growth was rapidly in the labor force grows less rapidly, output

grows less rapidly. there's an easy way to take account of that and that is per-capita output. robert and i posted that in the statistics we cite. the second observation is that the reason societies invest is a significant part to provide capital for new workers and to provide housing for new families and so if the growth rate of new workers in new families slows than then one would expect the share of gdp devoted to investments to decline and that has happened and i think demography is a significant part of the reason why and that is i think a significant part of the explanation for why real interest rates are so low and it's part of the reason why i

think people who look at these interest rates and say they are extraordinary low by historical standards therefore policy is highly expansionary are making a mistake is relative to the proper benchmark policy is also expansionary. however i think a substantial part of what we have been emphasizing on this panel is that productivity defined as output per pit of labor and capital have declined substantially and there is no obvious and natural reason why productivity as defined by per unit of labor and capital should go down just because the labor force is growing less rapidly and if anything when the labor force grows less rapidly you might expect some tendency towards increased capital which

would lead to a higher growth rate in productivity. i think invoking demography as an explanation for slow productivity growth actually is not a 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 effect is labor force. i think there are things that can be done that affect that. i do support more generous and expanded family leave policy because i believe they are like we to raise labor force participation and that is likely to lead more rapid growth in the

labor force and it seems to me there is a fairly clear market failure as to why the market in and of itself generates enough of that which is that if i and 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 everyone can benefit from everyone offering family leave but anyone who innovates is strongly disincentivized. i also think there is a quite strong case for immigration reform which in unreasonable ways would expand the growth of the labor force and particularly

if done in ways that affect high-skilled workers would i think offer the prospect of entrepreneurship that would bring increases in productivity. >> i agree with your important observation of the productivity slowdown is common across a group of countries and that certainly pushes you in the direction of saying your explanations for this phenomenon should be something that works in common across the country country specific so one thing that pushes the technological progress is growth will rate is weaker in that something that affects the countries in common. a grit larry at that the tendency towards diminishing population growth is not a promising factor. in fact it's well-known that fertility rates which have been quite pronounced are a source of

positive per-capita gdp growth and that is strongly confirmed. it might be the case that age structure going up and more retired people could be a drag although i've never been able to find empirical evidence for that across countries. that part may be. the fertility should go in the opposite direction. i wanted to say briefly something about public infrastructure investment which larry mentioned before. i am basically sympathetic to that if one can concentrate on things that enhance productivity. and in particular if you want to do something like building a bridge or a highway got to think about what is that due to productivity so you would opus on the jobs program aspects of these projects. he wouldn't be focusing on the expenditure side which would contribute to aggregate demand. you would be focusing on the productivity enhancing effect after the infrastructure which

is when it's expected actually matter. something that makes me skeptical about the potential for this is what i understand about the experience of japan today think they have had a tremendous increase in infrastructure investment over the last couple of decades and it certainly has not helped economic performance including economic growth and i was also told that basically they had gone so far in terms of infrastructure investment that the marginal return is probably negative. it's not a very good novel for the u.s. at all. >> i will pick up on that with you because you've always been emphatic in public structure investments is a no-brainer. my question -- how much would you have to spend to change that number are?

.. >> complex public/private partnerships and the like. and i think the evidence is most compelling on the desirability of maintaining the infrastructure we have. i agree with robert, i don't think that it's either/or

between creating jobs and raising demand and doing things that are efficient in terms of augmenting the economy's capacity. i don't see why you have to choose between those two things. but i do agree completely that the right focus in choosing projects should be the ones that will have economic benefits, and my read is that 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 that the average american pays the equivalent of a 75 cent a 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. and that is that we measure the national debt. we do not measure the national deferred maintenance liability. both are burdens that this generation is placing on our children. and i would argue that at current interest rates the cost of deferred maintenance compounds substantially more rapidly than the cost of paper debt. so even apart from any economic benefits in the form of higher gdp, simply doing the deferred maintenance more promptly is a good thing. is a reasonable program of

infrastructure investment going to be the silver bullet that eliminates a 12% of 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. and if you raise the growth rate of the economy by 1%, it would obviously take substantial time to fill any gap. and 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 gdp. when i putter around town 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 cost benefit analysis rather than in terms of the benefits just as measured in the gdp. >> larry, i would say a different personal observation,

your output goes up dramatically after you passed through jfk. [laughter] that said, robert, how would you respond to this? >> well, first, i'm glad that larry and i can agree that fixing potholes is the most productive activity of government. [laughter] i mean, more generally the question of deferred maintenance is the idea that when you think about the government debt, and people have often supplemented that to think about prospective payments on pensions, that you'd also want to include the value of the capital stock which would have to be properly depreciated, and the deferred maintenance would be part of that general framework in terms of what the government owns and owes. i can't resist saying something about what larry said earlier about amnesty, because he really missed the obvious optimal

amnesty program. with respect to his library book thing, the optimal amnesty program there is you announce that if you bring in your illegally-held books that you'll not be punished and you won't have to pay fines, but after people bring it in, you're supposed to say i was only kidding. [laughter] and, in fact, you have to pay the full amount, and that accomplishes two things. you get the revenue, and also you provide credibility that you're not going to do this again. [laughter] so it's actually, that's the optimal amnesty program finish. >> and how would that -- >> robert, you're dating yourself. if memory serves, which i think it does, it was 28 years ago that you published that idea in the "wall street journal." [laughter] >> i think most people didn't notice or had forgotten. [laughter] >> i think, i don't know whether this is a more recent idea, robert, but you recently observed, that is to say 45 minutes ago, that no great idea was ever come up with by

somebody who was wearing a tie, so i'm actually tempted to take my tie off -- >> yeah, likewise. >> my question right now does go to the idea that anything we can do to generate more ideas is probably, you know, a positive thing. and nobody has come up with a formula for that. but certainly in the area of policy, you want to do things that actually sustain risk taking and idea creation rather than restrain are it. and i think this is where the debate over regulation often comes in. it's not so much the cost benefit. you sometimes wonder whether regulation actually discourages risk taking. i mean, if innovation is really about yields, you know, like only 5% of good ideas ever produce a good outcome, you basically want to do whatever you can to raise the denominator so you get more good ideas. but you certainly hear -- certainly, i hear this from all the time from business folks, that the burden on risk taking has grown in the last six or seven years. you can see it in a a lot of

areas, but perhaps no more profoundly than in the financial area where, to your point, our fear of another economic disaster seems to have put a very high premium on avoiding any sort of risk taking that could lead to another. is that a problem? could that be part of the extra nations going on here? and we do something to fix it? >> i think we need to sort to out two different things. i don't know whether there's a problem of unicorns or not. there's certainly a lot of people who think there are. but, you know, every, every fifth harvard student who comes out of my -- comes into my office has some kind of idea to start a start-up 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 the defining

feature, defining -- that an 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 mean, i said 15 years ago that a great strength of the united states was that it it was the oy 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. and 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 what holds itself out aztec logical innovation is actually a kind of regulatory arbitrage because we're doing things in the

silicon valley way, we're not covered by the traditional laws and the advantage comes more from the regulatory arbitrage than it does from the, than it does from the technological innovation. i think there's a different question about what the inhibitions are are or -- 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, 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 kinds of standard issues. with regard to patents, there's a standard trade-off that has been understood at least going back to thomas jefferson that there's an advantage to rewarding people who come up with new ideas but then once things are there, you want to have them freely available and accessible so there's a kind of trade-off there. but 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, it's something like facebook or whatever, i mean, the scale in which you can use that is so much bigger than things used to be. and that, of course, is going to go the opposite direction in terms of motivating more

risk-taking activity compared with the inhibitions that might relate to things like regulations, taxes, lack of patent protections. so i think you see a lot of the kinds of risk-taking activities that are prominent now because of this 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. and that can, of course, produce great rewards. >> well, this has been great, and i've got lots more questions, but i'd like to bring some of you into it. so if you can put your hand up, i'll try and get to you. for those watching on the web, if you go to slido and enter the aei event, your question may or may not show up here. [laughter] >> there's an incentive. >> okay. i'll start with you, sir. and state your name and your affiliation. >> hi, i'm doug carr can carr capital. dr. summers, you talked about

the importance of investment for both stimulating growth and increases in productivity. but since we went off bretton woods, the old model that i was taught of the accelerator/multiplier, the government spends money, it stimulates investment, that's actually reversed. and there's a very strongly negative relationship between government spending and investment. that's both secular as well as cyclical. similarly, government deficits are strongly negatively correlated with investment, ultra-low interest rates strongly negatively correlated with investment. now in the u.s. when we're ostensibly near full employment -- >> is there a question here? >> yes, absolutely. how do you stimulate demand? >> it's for you. [laughter] >> how to you stimulate demand and boost investment if all these tools for stimulating -- >> i don't think the, i don't -- i wouldn't subscribe to -- i think a substantial part of your

analysis suggesting that all these things that are negatively correlated with investment, i don't think has the causal significance that you attach to it. it will be generally found that in the presence of more oncologists, there is more cancer. but that is not usually taken as evidence that oncologists cause cancer. and in the same way, it will be discovered that interest rates are lowered and budget deficits tend to be increased at times when investment is weak. but it would be a serious mistake to infer from that that lower interest rates and budget deficits are necessarily causes of low investment. and so i think that relatively standard economics involving a role for the multiplier involving the recognition that investment is sensitive to costs of capital continues to be the right way to think about

economic policy towards investment. at oh points -- at other points i would have found it highly. [applause] be bl as i did -- [applause] be bl, as i did, for example, in advising president clinton in 1993 to believe that high capital costs associated with budget deficits and prospective 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 a plausible view in many places and many times. at the current moment when the 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 wachtel, i'm in the investment business. to mr. barro, this is to some extent a variation on this question and that link that many summers doesn't see, i think, is provided by alan greenspan on the subject of confidence. you mentioned simpson-bowles, and that's why i'm addressing this to you. so i think what greenspan would say is 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. and then when he says when you look at the situation with 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 could fix that long-term problem, it might help with productivity and growth, and i'm wondering, i know it's all politically impossible, but 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? >> you know, i agree with that sentiment, that uncertainty about the long-term fiscal situation is probably a drag on investment. so that particularly involves taxes and on the spending side the main thing would be entitlement programs in terms of the projection looking unsustainable in terms of the current situation, that something basically has to give. and 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 kinds of changes that tried to cement the long-term fiscal situation of the u.s. government. this went back to some packages particularly from the 1980s that had been put into place, and it went further in some regards. eliminating some deductions on the federal income tax is another example, especially home mortgage interests. it seems that every now and then the government can get to a situation where it has a serious discussion of those kinds of matters, and sometimes it delivers results. so it hasn't been since 2010. i think that that commission report could actually have been pretty much implemented if the administration had been interested in it at that point in time. so we may get back to that kind of thing. but i agree with your implicit argument that that's important with respect to investment and

and other things. >> i want to -- >> we stayed out -- wait just a minute. we've stayed out of politics here pretty well, but you just crossed the line. [laughter] >> it wasn't much of a line. >> no, it was. you just crossed the line by blaming the administration on simpson-bowles. let's just be clear that there were three members of the simpson-bowles panel from the house majority. all three opposed the report. it was a non-starter in the house of representatives that was controlled by the republicans. the one thing that would have made it more of a non-starter would have been barack obama's enforcement. endorsement. barack obama -- [laughter] hid what made it more likely to happen which was stay away from it and see if the process could be restarted later. whatever you think about simpson-bowles, somehow blaming that failure on the administration when the administration's representatives

supported the recommendation and the house republicans did not, i think that was unworthy of you. [laughter] >> oh. >> and that, i think, that part of it, that part of it, i think, that part i think is not, is not fair. >> i thought the democrats were or in charge of congress at that time. i don't understand this argument. >> no, they -- >> no, they weren't. they weren't. it came after the 2010 election. >> so staying onion-controversial subjects -- [laughter] i'm going to ask -- we have a question about corporate tax reform from the online audience, which i think is 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 itself versus just resolute resolving the uncertainty that

surrounds the corporate tax system? >> i think both matter. i think the uncertainty, there's a certain tendency to just, like, 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, wringing better clarity -- bringing better or 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 say something very important in 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 investments and corporate tax reform. and there are many people who are saying that those two things should be twinned because

they're both good, and democrats like infrastructure, and republicans like corporate tax reform. and business likes corporate tax reform, and corporate tax reform will pay for infrastructure. there is a, there are some laws of arithmetic that are constraining here which is the kinds of corporate tax reform that businesses like tend to be corporate tax reforms that mean that business pays less. [laughter] just kind of the way the world is. and 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. and so the idea that you can do a tax reform which both, in a genuine sense, improves the government's budget positioning

and provides money to pay for a new spending priority and makes business better off, there is a real iowa rivet metic problem there that is underappreciated by many of the tribunes of bipartisan agreement. and people tend to 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 of, 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 a reduction in the amount they pay than a fair amount of the commentary suggests. >> yeah. i mean, in terms of simpson-bowles in particular, i think the central idea was that we were already in trouble with entitlement spending in terms of the projections, and then we're trying to do things with revenue that are in that context, so it's not particularly providing additional monies for other kinds of programs which larry, i think, was indicating would have been problematic. but in terms of uncertainty versus kind of the overall package and rates, that clearly came together in that kind of context. and i'm not sure how to say how much of importance is one piece versus the other, but i think it was 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 the tax rates more favorable for things like investment including things on the corporate side and also things on the individual income tax in terms of eliminating deductions that most people think are unproductive. so -- >> there was a lot that, i think, was good in simpson-bowles particularly on the, particularly on the tax reform side. but i do want to come back to this uncertainty idea is appealing, but the kind of thing i was saying a little while ago does apply. look, new buildings are pretty good substitutes for old buildings. you know? a new office building competes with an old office building. and 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 lodge -- logic should be reducing the value of old office buildings. and if you look at commercial real estate prices now, people are discussing whether there's a bubble. i have no idea whether there are a bubble or 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 all the uncertainty has a pretty clear testable implication; namely, 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. and all you have to do is look at read 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, i think that there are a set of issues around regulation and zoning, rules on, rules on land use, difficulty in permitting that would operate in exactly that direction. it would 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 a much