My Conversation with Austan Goolsbee at Web 2.0 Summit

He introduces himself as “another tall, skinny guy with big ears and a funny name.” Economics adviser to Barack Obama during the campaign, and now a member of the President’s Council of Economic Advisers and chief economist of the Economic Recovery Advisory Board, Austan Goolsbee is a key figure in framing the economic thinking of the Obama administration. Perhaps most importantly for those of us in Silicon Valley, he’s an economist clued in to the tech world. His economics papers cover such topics as the impact of taxes on technology diffusion, the impact of internet subsidies on public schools, and the economic impact of leisure time spent on the internet. He’s worked closely with Richard Thaler and Cass Sunstein of Nudge fame, and thinks a lot about the power of default options to shape behavior, a topic that any web developer should also know by heart.

I’ll be interviewing Austan Goolsbee on stage at the Web 2.0 Summit. In preparation for our conversation next week, I spent an hour with him yesterday morning. He’s a fascinating guy. To give you a taste of the kinds of things we’ll be talking about, here’s a short transcript of his response to my question about the economic impact of the internet:

Somehow, in my economist heart always lies the revealed preference thing, which is: People are investing tons of their time, tons of their money, tons of their energy into the internet; they wouldn’t be doing this for no reason. Regardless of whether we have the data, our presumption ought to be that it’s a big productivity improver. But I also think that the evidence on big general-purpose technologies like that is usually that when they’re first invented, the impact takes a while to show up, but when it does, boy is it a big time thing, outside just the industry itself, across the board.

If you go back ten years, which isn’t that long, the social landscape and the technological landscape are almost unrecognizable. And just that impact, at this early stage, is sufficiently big that you’ve got to think that twenty years from now, the internet is going to have humongous productivity implications.

Take the health sector. People say “not only does the health sector need to enter the 21st century, it needs to enter the 20th century!” The technology is sufficiently backwards in terms of the information processing – everything’s on paper! If you start envisioning healthcare, energy, the government itself — major league shares of the GDP — and what the potential is of marrying that to the newest technologies…! Economic potential, historically speaking, tends to be a bit like water. Water will always get to the lowest point. If there’s big potential somewhere, it may take a bit of time, but we always find a way to unlock it.

We’ll be talking about what Goolsbee would recommend doing differently if we had a “do-over” on the economic stimulus, the importance of innovation to any future economic recovery, education and income inequality, financial services oversight, and President Obama’s desire for “iPod government” (which Goolsbee describes as “making [government] simple and easy to use, so that people like it, rather than giving people the third degree and a lot of red tape.”)

If you had a chance to sit one-on-one with one of President Obama’s economic advisers, what would you ask him? Help me prep for the interview by making suggestions in the comments. It will be tough to do as good a job as Jon Stewart, but hopefully we can come up with some questions that get Austan going!

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