He’s not just the star of parody videos. The man also participated in a Q&A at Fortune with London Business School Dean and Clinton administration economic-policy bigwig Laura Tyson a few weeks ago, and now I have finally gotten around to posting an abridged transcript at fortune.com. I also wrote a little summary to go with it, the gist of which is that Republican Hubbard and Democrat Tyson agreed that income inequality is becoming one of the big issues of the day. Not so much inequality per se as the fact that even while the economy has been growing and unemployment low, most Americans have been at best treading water because most of the gains from globalization and rising productivity have been lining the pockets of the already-affluent. (Don’t know that Hubbard would put it exactly that way.)
For a quarter century, starting in the mid-1970s, the biggest economic-policy challenge facing the U.S. was slow productivity growth. And so, after some initial hesitation, politicians responded with pro-productivity changes like deregulation, tax cuts, and reduced trade barriers. Now we’ve got the higher productivity growth, and it only makes sense that we should start to pay more attention to other matters, like how the proceeds of that higher productivity are distributed. So far this is an issue that George Bush has almost entirely ignored. Now even a still-pretty-loyal former Bush administration economist is saying that’s a mistake. This seems to me a signal that we might be on the verge of a pretty major shift in economic policy, maybe not quite on par with the New Deal and Reagan revolution, but still a big deal. The big question is whether we can figure out a way to address inequality without destroying productivity growth in the process with things like tariffs and high taxes on capital.