Remarks to the 2007 Winter Policy Forum

Good morning. As background for linking the topics of economic growth, economic security, and workforce development policy, I’d like to start by describing the Hamilton Project and its approach to these issues. It is an economic policy initiative that produces research and proposals on how to create a growing economy that benefits more Americans. The Project argues that free markets are efficient and effective but they’re not perfect and there is an important role for effective government where markets alone don’t work. In an economy where technology and globalization are increasing income inequality and making workers more vulnerable to risk, the Hamilton Project is developing pragmatic policy responses intended to create new opportunities for middle class affluence, bolster economic security, and spur more enduring growth.

The Project is distinguishes itself by relying on innovative thinkers inside and outside Washington, who combine strict academic rigor with a practical understanding of how things work. The Project defines economic issues broadly, not only looking at budget and trade questions, but also at issues like social insurance, technology, and education. Priorities include domestic investments and programs to help workers take risks to boost productivity and wages. The Project advocates for fiscal restraint and an open trade policy, supported by means for distributing the benefits of technology and trade more broadly. The goal in advancing these ideas is not simply to change the debate but to encourage policymakers to change policy and improve our economic prospects moving forward.

The Hamilton Project was formed in response to a shared feeling that the U.S. was on the wrong track economically and that new intellectual energy was needed to develop a serious, systematic strategy to address the challenges the U.S. economy faces. The Project was launched in April of 2006 by a group of business leaders and former policy makers, including former Treasury officials Robert Rubin and Roger Altman. The Project was initially led by Peter Orszag, who recently left to head the U.S. Congressional Budget Office, and is now directed by Jason Furman, who was an economic advisor in the Clinton White House and is currently a Senior Fellow at the Brookings Institution.

To give you a sense of both my own role in this Project and how the Project works, I’ll tell you a bit about myself. In 2005 I was teaching at Princeton when Peter Orszag asked me if I had any good policy ideas for addressing the economic insecurity of American workers, and whether I would like to write them up. I became one of the first of a group of scholars now numbering nineteen and growing that have contributed original ideas to the Hamilton Project. As a university professor, my usual style of writing was to define a problem, examine some policy levers that could potentially address the problem, carefully assess the evidence, and end with some general recommendations about the relative effectiveness of different approaches. Working with the Hamilton Project gave me a forum to put forward a single, concrete, comprehensive policy proposal – backed up by a full discussion of the evidence on the pros and cons of the recommended actions. I also benefited greatly from the practical advice of the Hamilton Project’s advisors and staff, and from having my proposal reviewed by industry leaders and government officials in addition to academics.

As a contributing author to the Project I don’t always agree with the policy proposals made by other authors or with the frameworks advanced in the strategy papers by the Project’s advisors, director, and staff. I do know a lot about the project’s principles and proposals, which I’ll describe to you now – drawing directly on material prepared by the Project’s staff as well as from my own work.[1]

First, I’ll elaborate on the economic challenges the Hamilton Project aims to address. Second, I’ll describe the principles and governing philosophy that guide the Project’s work. Finally, I’ll share some specific examples of the types of policy ideas that exemplify the Project’s approach, focusing on unemployment insurance.