Bush adviser: Economy headed in right direction

A top Bush administration adviser painted a promising picture for the changing U.S. economy in a campus speech Monday.

Edward Lazear, chairman of the Council of Economic Advisers for President Bush, pointed to a number of trends that he said indicate that the United States will remain a dominant force in the evolving global economy.

He said skyrocketing productivity rates over the past few decades have and will continue to drive up wages.

Lazear made his comments to a crowd of students and professors at the Utah Museum of Fine Arts Auditorium.

Some spectators said afterward that they disagreed with Lazear’s claim that increased productivity results in higher wages for workers in the United States.

Thomas Maloney, U economics professor, said he is not as optimistic about the correlation.

“It was putting the best face on the current state of affairs,” he said of the speech.

Scott Schaefer, U finance professor and a former student of Lazear, disagreed with Maloney, saying that while productivity doesn’t always mean higher wages in the immediate future, in the long run, they track one another.

“Increase in productivity is a necessary condition for wages to go up,” Schaefer said.

Lazear also spoke about the impact job outsourcing has on blue-collar workers. He said that while the shift to a service-based economy has hurt some workers, it has an overall benefit.

“Whenever you have (outsourcing), people are going to lose,” he said.

Lazear also advocated for federal money to help those who have lost their jobs to outsourcing.

However, he said the job market is more promising for college graduates, who on average earn 70 percent more than high school graduates.

“Education really pays off,” Lazear said. “Those of you here making an investment in a college education are doing the right thing.”

When it comes to the deficit, Lazear said, the United States is doing the right thing by accumulating a large debt to pay for the war in Iraq and the cleanup after Hurricane Katrina. He said it is better to pay these costs back over time instead of all at once.

Wade Roberts, a doctorate student in economics, questioned the way Lazear presented his statistics and said he thought the data was given in a partisan way.

Josh Lee

Edward Lazear, economic adviser to President George Bush, answers questions from students, faculty, and members of the community at the Utah Museum of Fine Arts Auditorium on Monday morning. Questions ranged from the shrinking middle class and graduate employment to the national debt.