Hope you enjoy this anecdote of my brief 'tangle' with Larry Summers.
I was excited to receive an invitation to listen to Larry Summers moderate a panel discussion with Nick Eberstadt and Jason Furman. Nick recently published the book Men Without Work and Jason served as the Chair for the Council for Economic Advisors for President Obama. To my surprise, I was asked to join them for a dinner after the forum.
I had received Nick Ebersdat's book as a gift for Christmas and had written a review about the keen insights from the book. And indeed, Larry Summers had reviewed the book in a mainstream journal as well.
I had front row, center seating for this august panel and was in policy wonk heaven. I got a taste of what I was going to experience at dinner, when Larry Summers opened the panel with a straight up confrontation of Nick's thesis on why that men without work, was an 'invisible crisis.' That is, why was it invisible and why was it a crisis - in light of the fact that unemployment is at a low of 4.5%. (Even though Summers personally agreed that it was so).
The conversation settled down into an excellent set of insights, with Jason lending the full force of his recent appointment as advisor to President Obama in laying out the conundrum of lack of growth in productivity in-spite of technological growth, GDP growth and continued income stagnation.
The Q&A session was robust with an interesting rule. Questions had to be brief and had to end with a question mark (i.e. no comments or commentary)!
After the forum we repaired upstairs for a roundtable dinner with various dignitaries and luminaries (and me).
I had a corner seating (in as much as a round table setting would permit) and Larry, Nick and Jason were strategically dispersed around the seating.
President Kennedy when he was hosting several Nobel Laureates is understood to have said, "I think this is the most extraordinary collection of talent, of human knowledge, that has ever been gathered at the White House - with the possible exception of when Thomas Jefferson dined alone." I felt the same way about Larry Summers and the rest of the folks around the dinner table that evening. It was everybody talking and being kept on their toes by Larry.
The conversation continued from the forum on the puzzle of productivity growth. Presently, the conversation turned to technology and finance and Larry's experience with FinTech.
I was quietly tucking into my salmon, when Larry looked over at me and said, "Surya, you work for a bank - what do you think?"
I quickly swallowed what was in my mouth and muttered, "I do have a question"
He looked and me and said, "not allowed. You need to explain your position first. Then ask your question."
Thanking my stars that I had observed my senior leaders talk about this topic, I gave a quick observation of technology in banking especially in the area of cyber security, fraud detection, check imaging, online bill pay etc. And said, that the key vulnerability for jobs and employment going forward might well be middle management, since technological advancement such as AI could well displace decision making needed from these layers of staff.
Rather than criticize me personally, Larry just observed that all of us bankers say the same thing, yet we keep opening bank branches and adding staff. Can I explain that?
I gave a brief response that operating ratios have been improving but not proportional to staff reductions - but nevertheless it was a publicly known fact.
At that point I knew, I was in his cross-hairs and the flattening missile was on its way towards me.
Jason smoothly jumped in to my defense, agreed with my observations and broadened the conversation to address the paradox of lack of productivity growth. In particular, he said that our view of disruptive technology distorts our perception of employment, because we are looking at what is most visible and observable. And that there are many jobs in the economy that are mundane and not disrupted as much as we fear they have been.
Nick Eberstadt and a friend and partner of mine worked when they were young, for the late Sen. Daniel Patrick Moynihan of the state of New York. After dinner, I chatted with Nick about his days with the late senator. He shared some excellent stories. We then had a picture taken so we could share it with our mutual friend.
It was a great dinner and was a treat to attend and listen to this in person.
My book review of Men Without Work:
http://agingonthevine.blogspot.com/2016/12/book-review-men-without-work.html
Myearlier experience listening to Larry Summers speak:
Larry Summers & a Jataka Tale
I was excited to receive an invitation to listen to Larry Summers moderate a panel discussion with Nick Eberstadt and Jason Furman. Nick recently published the book Men Without Work and Jason served as the Chair for the Council for Economic Advisors for President Obama. To my surprise, I was asked to join them for a dinner after the forum.
I had received Nick Ebersdat's book as a gift for Christmas and had written a review about the keen insights from the book. And indeed, Larry Summers had reviewed the book in a mainstream journal as well.
I had front row, center seating for this august panel and was in policy wonk heaven. I got a taste of what I was going to experience at dinner, when Larry Summers opened the panel with a straight up confrontation of Nick's thesis on why that men without work, was an 'invisible crisis.' That is, why was it invisible and why was it a crisis - in light of the fact that unemployment is at a low of 4.5%. (Even though Summers personally agreed that it was so).
The conversation settled down into an excellent set of insights, with Jason lending the full force of his recent appointment as advisor to President Obama in laying out the conundrum of lack of growth in productivity in-spite of technological growth, GDP growth and continued income stagnation.
The Q&A session was robust with an interesting rule. Questions had to be brief and had to end with a question mark (i.e. no comments or commentary)!
After the forum we repaired upstairs for a roundtable dinner with various dignitaries and luminaries (and me).
I had a corner seating (in as much as a round table setting would permit) and Larry, Nick and Jason were strategically dispersed around the seating.
President Kennedy when he was hosting several Nobel Laureates is understood to have said, "I think this is the most extraordinary collection of talent, of human knowledge, that has ever been gathered at the White House - with the possible exception of when Thomas Jefferson dined alone." I felt the same way about Larry Summers and the rest of the folks around the dinner table that evening. It was everybody talking and being kept on their toes by Larry.
The conversation continued from the forum on the puzzle of productivity growth. Presently, the conversation turned to technology and finance and Larry's experience with FinTech.
I was quietly tucking into my salmon, when Larry looked over at me and said, "Surya, you work for a bank - what do you think?"
I quickly swallowed what was in my mouth and muttered, "I do have a question"
He looked and me and said, "not allowed. You need to explain your position first. Then ask your question."
Thanking my stars that I had observed my senior leaders talk about this topic, I gave a quick observation of technology in banking especially in the area of cyber security, fraud detection, check imaging, online bill pay etc. And said, that the key vulnerability for jobs and employment going forward might well be middle management, since technological advancement such as AI could well displace decision making needed from these layers of staff.
Rather than criticize me personally, Larry just observed that all of us bankers say the same thing, yet we keep opening bank branches and adding staff. Can I explain that?
I gave a brief response that operating ratios have been improving but not proportional to staff reductions - but nevertheless it was a publicly known fact.
At that point I knew, I was in his cross-hairs and the flattening missile was on its way towards me.
Jason smoothly jumped in to my defense, agreed with my observations and broadened the conversation to address the paradox of lack of productivity growth. In particular, he said that our view of disruptive technology distorts our perception of employment, because we are looking at what is most visible and observable. And that there are many jobs in the economy that are mundane and not disrupted as much as we fear they have been.
Nick Eberstadt and a friend and partner of mine worked when they were young, for the late Sen. Daniel Patrick Moynihan of the state of New York. After dinner, I chatted with Nick about his days with the late senator. He shared some excellent stories. We then had a picture taken so we could share it with our mutual friend.
It was a great dinner and was a treat to attend and listen to this in person.
My book review of Men Without Work:
http://agingonthevine.blogspot.com/2016/12/book-review-men-without-work.html
Myearlier experience listening to Larry Summers speak:
Larry Summers & a Jataka Tale
10 comments:
What was the question you wanted to ask -- nrp
I was intrigued by your middle management comment - and thought of the hub-bub about the Labor Dept. Nominee who got shot down (I think) who reportedly evangelized automation over humans. I do see it as a trend.
My takeaway on capitalism is that capitalists are highly incentivized, motivated and rewarded for focusing on short-term profitability. So things like automation move it forward... however, the short term focus means that longer term investments are less well rewarded, so tax cuts turn into beach homes, island villas and yachts. There is very little trickle down.
What was the question you wanted to ask?
My question was going to be:
There is a straight line on increased men without work since the mid sixties without being affected by growth or recession. That is what Nick's book shows.
My question was - IT processing power has been doubling every 18 months since the 70s. This exponential growth can cause severe destruction to jobs. Thus do we face an even bigger slope than previously, indeed a cliff?
I would have then waxed eloquent on 'second half of the chessboard '
I am doing some research on robo advising to investors. The initial evidence suggests that it does not decrease and possibly increases labor demand.
Here is my deep worry on this matter:
http://agingonthevine.blogspot.com/2016/05/alexa-you-firing-me.html?m=0
My view on this topic is perhaps offbeat but I see this process as evolution at work. Dinosaurs did not know better creatures were coming. When better creatures came, earth became better. This is nature’s way.
In what way is humans inventing better versions of themselves not an evolutionary process? For instance, the v2 of humans that worry many of us may be nature’s response to the destruction of the earth by the current population. Fewer people consuming less and doing things more intelligently may ensure life beyond what we see today. You can see the green crowd as those trying to preserve mankind as it exists and assert its superiority versus evolution to a better kind of human. Who wins is worth seeing.
The real point is not change per se, but its speed and our ability to see and talk about it. The process is the same, evolution, but the speed, observability, and the ability to articulate what is happening is different. Perhaps it is for good reason.
Just my two bits, perhaps not worth more than that.
Agree with you that it's just a matter of time before AI and disruptive tech will take over from humans but during a crisis it's human intervention which is key to problem solving.
Pretty awesome!
While I know that Summers is extremely smart and knowledgeable about economics, finance and government policy, he’s always struck me as one of those who still thinks more highly of themselves than is warranted. And, as you know, he has a nasty, patronizing personality that usually goes with that self-image. Which is why he’s generally hated by his colleagues wherever he goes. So good thing Jason jumped in there.
What I’d love to have heard, however, was Nick’s response to that line of discussion. I’m guessing it’d be rather different than Larry’s or Jason’s. And I’d certainly have loved listening to his Moynihan stories. Pat is perhaps the most intellectually admirable man to have served in American politics since… well, perhaps since that guy eating alone that Kennedy referred to.
Good stuff
Very nice interaction and discussion
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