Michael Boskin on American Economic Policy Since Reagan | Hoover Institution

Since the late '60s, in any event, seen a big increase in the life expectancy of the elderly. So that sort of suggests that they're gonna need more saving for retirement to span a longer retired lifespan. Um, many other things were going on as well, but, um, the IRAs were, and the expansion of, uh, or the opening up of 401[k]s was put into the law in 1981 in Reagan's original tax act.

[upbeat music] This is the Capitalism and Freedom in the 21st Century podcast, an official podcast of the Hoover Institution's Economic Policy Working Group, where we talk about economics, markets, and public policy. I'm John Cochrane, your host. Today, my guest is Michael Boskin, who is a professor of economics at Stanford University and the Rose and Milton Friedman Senior Fellow on Public Policy at the Hoover Institution. Michael has done seminal work on taxation and savings. He's advised many business and political leaders in the US and around the world, and has served as the chair of the Council of Economic Advisers under George H.W. Bush. Welcome to the podcast, Michael. It's a real honor to have you here.

My pleasure, John, and congratulations on a great series.

I wanna start with your early life. Uh, you grew up in Los Angeles and you eventually found your way into economics. You know, a lot of, uh, great economists, uh, actually really grew up in, uh, in Los Angeles. Uh, what sparked your first, uh, interest in economics? What brought you into the field? And who were some of the biggest influences on your thinking early on?

Well, let me start with around that time when I was growing up and I was in high school, um, within three or four years were one or two years ahead of me, Tom Sargent, Bob Hall, and Bob Barro, all great economists. Tom won the Nobel Prize, the other two probably should have. Um, have, uh, were-- also became very interested in economics and grew up in that, uh, in Los Angeles and went on to careers in economics. I was somewhat interested in economics because a lot was going on in policy at the time. Uh, we had the Kennedy tax cuts going on. Uh, we had, um, we then subsequently had Lyndon Johnson trying to finance the war on poverty and, uh, and, uh, the Vietnam War without raising taxes and helping, as Tom Sargent demonstrated, generating the high inflation that, uh, reached a peak in the '70s and early '80s, uh, that was extremely detrimental. Uh, but I was kind of interested in, in many things, but I had a job the summer between my junior and senior year of high school counting cars at various, and, and other vehicles, at various times of the day and night in garages in down- uh, downtown Los Angeles. I eventually learned that that data was used as input into the cost-benefit analysis, which ironically I wound up teaching as part of public finance down the road, um, uh, to justify the building of what at the time was called the Santa Monica Freeway, but now it's called The 10. All the freeways now have numbers rather than names, I guess. Um, and of course, by the time it was built, uh, it could have had, you know, several more lanes and been fine. [laughs] So, uh, so I early on, unbeknownst to myself, [laughs] I was actually doing