Business leaders, analysts, and economists acknowledge that artificial intelligence will have a significant impact on the US economy in the future. However, economist Glenn Hubbard, a former dean of Columbia Business School, is concerned that the United States is not ready to handle the disruptions that will come with this AI revolution. He believes that the next few years will be crucial in defining how AI shapes the economy and growth.
Hubbard emphasizes the importance of economic growth, stating that it is essential for addressing societal issues such as climate change, education, and national defense. He notes that politicians are not discussing growth as they should because it involves disruptions. Economists believe that growth cannot happen without disruption, and the challenge lies in how to manage and address these disruptions.
Hubbard highlights that the increasing use of AI will lead to rapid disruptions in the job market, as compared to the slower changes witnessed due to technological advancements over the past few decades. He points out that the US needs to rethink how it manages change and supports people in adapting to new job roles that will be created by AI.
While CEOs are implementing AI in their businesses, Hubbard argues that government intervention is necessary to help prepare workers for new job opportunities. He suggests public policy measures such as partnerships between businesses and community colleges to train individuals for future job roles. However, he acknowledges that these measures will require government funding.
Hubbard critiques the government spending initiatives such as the CHIPS Act and Inflation Reduction Act, stating that more investment is needed in basic research to support future technological advancements. He believes that simply subsidizing companies with funding may not lead to significant technological breakthroughs that could drive long-term growth and innovation.
Hubbard also addresses concerns about inflation and suggests that prioritizing economic growth through productivity improvements may not necessarily exacerbate inflation. However, he emphasizes the need for policymakers to make choices regarding taxes and spending to manage the deficit effectively. He acknowledges that decisions around taxes and spending are complex and will need to be addressed by future administrations.
