Robert Litan, Vice President of Research & Policy, Kauffman Foundation
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Robert Litan is vice president of research and policy at the Kauffman Foundation. He has been affiliated with The Brookings Institution for nearly 20 years, first as a Senior Fellow and since 1996 as director of Economic Studies and holder of Cabot Family Chair in Economics. At Brookings, he led a team of economists monitoring the global economy and seeking answers to economic policy issues in the U.S. and around the world. The group's rigorous, independent research was designed to increase the public's understanding of how the economy works and how to make it better. During his time with Brookings, Litan authored or co-authored more than 25 books and 200 articles for professional journals and magazines. He co-founded and serves as the Director of the AEI-Brookings Joint Center on Regulatory Studies. Litan has had a distinguished career in public service. He served on the staff of the Council of Economic Advisers (1977-79), as Deputy Assistant Attorney General in the Antitrust Division of the Justice Department (1993-95), and Associate Director of the Office and Management and Budget (1995-96). He also has been a consultant to the Treasury Department on financial policy issues. Litan received his B.S. degree in Economics, graduating summa cum laude, from the Wharton School Department of Finance at the University of Pennsylvania; his J.D. from Yale Law School; and both a Master of Philosophy and Ph.D. in Economics from Yale University.
Clearly, we have one big “too big to fail” problem, and thus it is tempting to go beyond the antitrust laws and begin breaking up the largest financial institutions to sizes a bit smaller than the TBTF threshold. While I have more confidence in defining where that threshold may be for purposes of stronger systemic oversight, I am less confidence in our collective ability to define that threshold purposes for actually breaking up existing enterprises. We don’t fully know, despite countless regressions, where economies of scale ends and diseconomies of size begin More importantly, the act of breaking up existing… Read more
The huge and ongoing federal budget deficits are the elephants in our economic room that eventually cannot be ignored. Fortunately, in the short run – and that means through 2010 – the economy is sufficiently far from full employment that the deficit should not significantly impinge upon the recovery. But as GDP gets closer to potential GDP, sometime in 2011 and/or 2012, if the long-run structural deficit is not brought down in a meaningful way, then government borrowing surely will begin to crowd out private investment and send interest rates up. How far up will depend, of course, as it… Read more
My impression from anecdotal reports -- in the media and in personal conversations -- is that employers are more willing to offer wage cuts in lieu of layoffs, and employees more willing to accept them, in this downturn than in any previous recession of my lifetime. To the extent this occurs, this will mitigate an otherwise horrific decline in employment. In future years, I suspect there will be a number of economists who will be sifting through the data to whether and to what extent wage cutting in fact has happened.… Read more
OK I don't want to beat a dead horse, but if one of the objectives of the stimulus is to start doing now things we ought to be doing for the long run, then now -- when unemployment is soaring -- is the ideal time to adopt wage insurance. I have long advocated this idea, along with a number of other colleagues through the years (Robert Lawrence, Lori Kletzer, Gary Burtless, and Lael Brainard). It has been endorsed by a number of groups and studies. Now is the ideal time to adopt it. In previous years, with more normal rates of unemployment of… Read more
There is broad consensus that slowing and eventually reversing the rate of decline in housing prices is a necessary (though not sufficient) condition to ending the downturn and beginning the recovery. Well-designed government policy can prevent housing prices from overshooting on the downside and thus aggravating the recession. But what policy? Hubbard and Mayer have offered a broad-based plan that aims to lift to home prices generally, regardless of the homeowners' circumstances. Sure, everyone I know would like a 5.25% fixed rate mortgage, but on fairness and cost grounds, this idea seems much too broad, and possibly too expensive. A… Read more
Biography provided by participant
