Presidential candidates often struggle to explain their economic policies in the detail sought by media questioners. But that won’t be a problem for Laurence Kotlikoff, a financial economist and familiar name to investment professionals who read his Bloomberg columns or attend conferences featuring the Boston University professor’s brand of thought leadership. Kotlikoff has announced his candidacy for president of the United States, running as a candidate of Americans Elect, an Internet-based third-party platform that promises to place its top vote-getter on the ballot in each of the 50 states.
Kotlikoff (left) has written several books and numerous articles, giving the economist a highly specific paper trail on a host of issues ranging from sweeping tax reform to overhauling the financial regulatory system. Interested citizens can read his often granular policy proposals on his campaign website.
In a telephone interview with AdvisorOne, the 61-year-old professor said his campaign is about “policies not people, about the next generation not ourselves” but the rhetorical flourishes expanded into a broader analysis when he was asked questions such as what is the biggest problem facing the country today.
“The immediate problem is we have a very uncoordinated economy,” Kotlikoff says. “There are some 29 million Americans who are out of the labor force because they’re discouraged or they’re working less than they’d like. Everyone is earning less than they’d like. The challenge is getting all these people back to full-time employment. To do that we need to be organizing a collective hiring action by employers without ordering them or subsidizing them. We need to hire en masse; just like they were firing en masse.”
Asked how he would accomplish the mass hiring action, the candidate cited the jawboning precedent of President John F. Kennedy in 1962 when he pressured the steel industry to reverse planned price increases the president thought to be dangerously inflationary. Kotlikoff says our next president “needs to get the top 1,000 CEOs in a room and lock the door [figuratively, he later added] and talk with them as long as it takes; and explain to them that they need to hire, hire, hire. They need to increase their employment by 5%.”
Kotlikoff argues that today’s economy is characterized by “coordination failure” that calls for a policy approach different from normal times when the economy is “in a good equilibrium.” He compares our situation today to the Great Depression, from which we emerged via the government’s role in coordinating supply and demand through our military build-up for World War II.
“By hiring people, the military was like one huge firm that was hiring and producing output and demanding that same output,” Kotlikoff says. In the current economic crisis, Kotlikoff says the Germans have maintained high employment by actively adjusting “wage demand.” In less technical terms, Kotlikoff says that as president he’d be “in the faces of the employers day and night.”