Word: feldstein
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Plunked down sloppily in a chair in his spacious office adjacent to that of former mentor and friend, CEA Chairman Martin S. Feldstein, Summers seems almost out of place--as if he were back in Cambridge leisurely receiving a visitor during office hours. But as the 45-minute interview progresses and the public finance expert is constantly interrupted by a stream of telephone calls or colleagues asking for a quick bit of advice, the outsider is brought back to Summers' real present world of three-page memos, staff meetings, and access to some of the Administration's top policy makers...
Nonetheless, Summers, in his formal capacity as chief domestic aide to Feldstein and in his informal role as confidante to the 42-year-old Harvard professor, is having a lot more say in matters of policy than other people his age. "He couldn't become more senior than he is now" other than by "becoming a member of the Council itself," says one knowledgeable Washington economist...
...part, Summers acknowledges that he has "sort of" a special relationship with Feldstein. "I work very, very closely with the chairman, and I see him at some length every day," he says. The sorts of policy issues Summers is working on at the Council capital formation, unemployment, or how to stimulate investment--are said to resemble strongly the chairman's major interests...
...this doesn't mean that Summer falls into line perfectly with Feldstein, the man for whom he was a research assistant and co-author of several papers both as a student at Harvard and at MIT, and later as an assistant professor at MIT. "My views are probably more moderate and somewhat less conservative than his, although I'm in support of the general objectives of the Administration," he says, singling out unemployment as one area where more should be done...
...labor force would turn out to be unemployed whenever the statistics were collected-people shifting from one job to another or changing careers, for example, and people just coming into the labor force and beginning to look for work. Economists call this phenomenon "frictional" unemployment, and some, including Feldstein, are counting it as part of structural unemployment when they use a rate as high as 6% or 7%. According to some rough calculations, about half of that is probably frictional...