I'm the Director of Lifelong Learning

in Alumni Relations here at Dartmouth.

Matthew J. Slaughter is the Paul Danos Dean

of the Tuck School of Business at Dartmouth.

The Earl Daum 1924 Professor of International Business,

and the founding faculty director of the Center

for Global Business and Development.

He is also currently a Research Associate

at the National Bureau of Economic Research,

an Adjunct Senior Fellow at the

Council on Foreign Relations,

a member of the Advisory Committee

of the Export/Import Bank of the United States.

A member of the Academic Advisory Board

of the International Tax Policy Forum,

and of Economic Innovation Group,

and an Academic Adviser to the McKinsey Global Institute.

He told me this morning he doesn't

care if we give the long introduction,

but I think it's important for all of us

to put everything in context, and

know from whom we're going to be hearing.

From 2005 to 2007, Dean Slaughter

served as a member on the Council of Economic Advisers

in the Executive Office of the President

where he advised the President,

the Cabinet and many others on issues

including: international trade and investment,

currency and energy markets, and

the competitiveness of the US economy.

Dean Slaughter's area of expertise

is the economics and politics of globalization.

He has published dozens of articles

in peer reviewed journals and books,

and has coauthored four books,

including: "The Squam Lake Report:

"Fixing the Financial System" and

"Globalization and the Perception of American Workers."

Prior to joining the Tuck faculty in 2002,

since 1994 Dean Slaughter had been

on the faculty of the Economics Department at Dartmouth.

In 2001 he received Dartmouth's

John M. Manley Huntington Teaching Award

and in 2012 he received Tuck's Class of 2011

Teaching Excellence Award.

He received his Bachelor's degree

summa cum laude and Phi Beta Kappa

from the University of Notre Dame in 1990

and his doctorate from MIT in 1994.

Please join me in welcoming Dean Matt Slaughter.

(clapping)

- So, thanks everybody, good morning.

That's very kind.

Robin thank you for that very kind introduction.

And for those of you coming in late,

there's some seats down here, and I

promise I won't cold call on the front row.

So if you wanna sit (laughter)

you can come sit down here.

There's a few seats down here, so come on in.

So, thank you, it's great everybody's back.

Welcome back to all the alumni.

And you know, go Big Green, beat Yale.

So, we don't want to stand in the way of that.

I just put together a handful of slides

in talking with Robin and her colleagues

about what to talk about.

Just kinda thinking about where the world economy is,

and kind of where the US economy is.

So, I've got some slides I put together.

I've got five topics that we'll talk about.

I wanna talk about economic--

I'm an economist, sorry.

So, we'll talk about the economy and public policy.

And I'm happy for this to be a conversation,

so I wrote down conversation.

So, if you've got questions, or I'm not being clear,

just raise your hand or shout it out,

and it'll be lively and we'll have it all figured out

by 11. (laughter)

I wanna talk about economic growth.

So, that's kind of thinking about,

you know 'member,

John Kennedy gave a couple of lovely economic speeches,

talking about the rising tide lifting of all the boats.

So, the rising of the tide is economic growth.

The lifting of all the boats will be the second topic,

which you think about income distribution

and think about what's happening

and who's earning income in the US

from what growth we've got.

I want to look at the rest of the world a little bit.

I want us to think about how the US government is.

A lot of economic issues depend on what policies are set

in the state and national governments.

So we'll focus on Washington for a minute,

in some sense, do we have the fiscal means

as a country to meet the aspirations we might have.

And then I wanna just, I'll kinda draw all that together

by looking at what people think these days.

As was kindly said, I've done a lot of

research over the years with an old college

roommate who's a political scientist.

On kind of looking at how people feel

and how they think about the economy.

How they think about globalization and things like that.

So, but like I said, if I'm unclear,

or if you have questions, just let me know.

And I hadn't thought, Robin, but

if people want these slides, not that you do,

but if you do, you can have them.

I'll email them along.

'Cause I just have some pictures.

So, we'll go through each of the topics.

First we'll talk about economic growth.

And then we'll go through them.

But, I just want to stress to people two things.

One is I'm an Independent Tigger.

So, independent means I'm a lifetime independent.

I'm not a Republican or a Democrat.

That also means here I'm not working for

any campaign right now, so you're not gonna

hear some sort of, I will gently say, partisan line.

And the other thing that I'll stress is Tigger.

So in the Winnie the Pooh stories,

if you remember the characters when you.

My wife and I have two boys, sons now.

When you read those stories as an adult,

you realize that there was a lot of intelligence

written into the different characters in the 100 Acre Wood.

So, I tend to be an optimistic person.

But I stress that 'cause frankly

though we're not in a world financial crisis,

the economy isn't all that great.

So, some of the numbers I'm gonna show us

actually are a little, mmm

let's call them Piglet like, (laughter)

or, you know, frankly Eeyore like, okay.

(laughter)

So, but that's where we are.

But as I say to my Tuck students all the time,

that's just a huge opportunity.

Us, involved in education for the undergraduates

here and the professional schools.

Like, what addresses these problems is knowledge.

Not that you have to know the answers perfectly,

but that you're thoughtful about how to approach them.

So, some of the numbers aren't Tigger-like.

That just reinforces all the great things

that happen on campus here at Dartmouth, okay?

Good.

So let's start with economic growth.

The rising tide.

Another metaphor that sometimes gets used

is the speed limit for countries.

If you think about driving a vehicle.

So, some countries grow very quickly.

Some countries grow slowly.

I just want us to think about, for the United States,

what seems to be happening with our speed limit.

And the way that economists typically look at this

is they look at the average rate of growth,

of what's called gross domestic product, GDP.

That's the total value of goods and services

that a country produced.

Add up the value of all the educational services,

and automobiles and everything else,

that gets you GDP.

If you can't read these numbers,

I tried to make the pictures as big as I could.

This is just average annual growth of GDP

in the United States for a number of decades.

Starting with the 1950s and counting through to the 2000s.

The message I want you to see here is these

blue bars are getting shorter.

The average speed limit rate of growth,

how much the tide is rising,

if you wanna mix metaphors, and English,

your English faculty here can correct you on that.

We're not growing as quickly as we used to.

So, our speed limit seems to be slowing.

There's a bunch of measurement issues

here that we won't go into.

I'm happy to talk about afterwards.

But, even if you discount in some sense,

or eliminate the years of the financial crisis,

and depending on how many years you put in the 2000s,

whether you want it through last year or just through 10.

Doesn't matter.

The speed limit rate of growth for

the United States is slowing.

And that's not great.

Now the question is why is that happening?

There's two main things that determine

the speed limit rate of growth for a country.

One is what's the growth in the labor force.

And the second is what economists call

growth in productivity.

Kind of how many goods and services,

what's the productivity of each one

of those workers in the labor force?

So, if your mind thinks as an accountant, or mathematically,

you can kind of see the total growth in output

is a combination of growth in people working in some

sense interacted with the productivity of those people.

So, why the speed limit is slowing

could be either of those things.

So, let's look at a picture of each one of those.

Part of it is the slowing growth in the labor force.

That's this picture.

This is growth in the US labor force.

The dark blue bars are data, decade by decade.

And then the light blue bars are projections

of the current US government right now.

You saw there was a period where

the labor force grew dramatically.

And then it's been waning.

That dramatic acceleration in the

growth of the labor force was the Baby Boom.

That was 76 million people being born

in the United States between 1946 and 1964.

Aging and entering traditional plummet years.

Along with that, the socio-economic change

of rising female labor force participation.

Yeah?

- [Voiceover] In the previous slide, what impact

if any has there been on the growth rate

of frequency and severity of the economic crises?

- [Voiceover] Could you repeat the question?

- Yeah, I'll repeat all the questions.

The question was when I talk about the

slow down in GDP growth, how do you

take account of business cycles and crises.

- [Voiceover] Severity and frequency.

- Yeah, and severity and frequency.

Great question.

The short answer is the slow down in

the speed limit for the US is independent

of what you think about business cycles.

Now, we could talk about business cycles.

'Cause that relates to the Fed

and it relates to fiscal policy too.

So, I'll come back to crises when I show us

the fiscal status of the US in a few minutes, okay.

But this, you should think of this as,

if you think like economists, a supply side statement.

The kind of productive capacity

and potential for the US is slowing.

And it's a basic sense, like oh, mmm, that

doesn't sound like a Tigger thing.

Like economic growth generally is good.

'Cause it speaks to the growth in income for people