The Kellogg School of Management was abuzz last Thursday when President Barack Obama visited to lay out his vision of the economy—namely, how it continues to recover from the Great Recession, and which policies might spur additional growth. These policies overwhelmingly targeted public investments in clean energy, early education, job training, and the like.
Professors Janice Eberly, the faculty director for the Kellogg Public–Private Initiative, and Benjamin Jones, the faculty director for the Kellogg Innovation and Entrepreneurship Initiative, have previously served in the U.S. Treasury and the White House. Both economists were generally in agreement with the President’s assessment of the need for increased investment. After a decade of growth leading up to the financial crisis that was built on nothing but “hot air,” they said, future growth must be built on real innovations in order to be durable. And what does innovation require? Updated infrastructure, a highly skilled workforce, and plenty of research and development.
But while these remarks on investment were welcome, David Dranove, a professor of strategy, and Craig Garthwaite, an assistant professor of strategy, took issue with the President’s comments on health care policy. President Obama implicitly credited the Affordable Care Act (ACA) for a recent slowdown in the rising cost of health care. In a post to their blog Code Red, the economists argue that, contrary to the President’s claims, their own research finds that “the ACA is responsible for at most a small fraction of the slowdown in private health spending.”
You can read a transcript of the President's speech here.
Photo by Jim Prisching.