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Aspen Economic Strategy Group Welcomes New Members

Aspen Economic Strategy Group Welcomes New Members

Leading policymakers, business executives, and academics join bipartisan group dedicated to promoting evidence-based solutions to America’s economic challenges.

WASHINGTON, DC, MARCH 12, 2025 – The Aspen Economic Strategy Group (AESG) today announced that eleven new members have joined the bipartisan group of distinguished leaders and thinkers who are committed to promoting evidence-based solutions to significant challenges confronting the American economy. Established in 2017 and co-chaired by former U.S. Secretaries of the Treasury Henry M. Paulson, Jr. and Timothy F. Geithner, the AESG fosters the exchange of economic policy ideas and promotes bipartisan relationship-building among current and future generations of economic policy leaders.

New members include:

Kenneth I. Chenault, Chairman and Managing Director, General Catalyst; former Chairman and CEO, American Express

Rahm Emanuel, Senior Advisor, Centerview Partners; Former United States Ambassador to Japan

Mellody Hobson, Co-CEO and President, Ariel Investments

Jonathan Levin, President, Stanford University

Joseph Manchin III, former United States Senator from West Virginia

Kevin McCarthy, 55th Speaker of the United States House of Representatives

Steven Mnuchin, Founder and Managing Partner, Liberty Strategic Capital; 77th United States Secretary of the Treasury

Gina Raimondo, Distinguished Fellow, Council on Foreign Relations; 40th United States Secretary of Commerce

John Waldron, President and Chief Operating Officer, The Goldman Sachs Group, Inc.

Meg Whitman, United States Ambassador to Kenya (Ret.); Former CEO, Hewlett-Packard; Former CEO, eBay Inc.

Heidi Williams, Orville E. Dryfoos Professor in Economics and Public Affairs, Dartmouth College

The AESG is also pleased to welcome back three members who recently concluded their public service in the Biden administration:

Wally Adeyemo, Former Deputy Secretary, United States Department of the Treasury

John Podesta, Founder, Center for American Progress

Janet L. Yellen, 78th United States Secretary of the Treasury

“The United States is in the midst of a significant reconsideration of our nation’s approach to both domestic and international economic policy. This makes the commitment shared among AESG members to advancing evidence-based, bipartisan solutions to economic challenges more important than ever,” said AESG Director Melissa S. Kearney. “These new and returning members will bring valuable expertise and perspectives to the AESG.”

The full list of 2025 AESG members can be viewed here. Membership is capped at 65 members annually, and the list of AESG alumni includes many prominent economic and business leaders.

New and Returning Member Biographies:
Wally Adeyemo, Former Deputy Secretary, United States Department of the Treasury
Wally Adeyemo served as the 15th Deputy Secretary of the U.S. Department of the Treasury and chief operating officer of the 100,000 employee Department during the Biden Administration. Adeyemo led Treasury’s national security and economic inequality work, and implemented some of the Department’s top policy priorities. Adeyemo oversaw the Treasury Department’s use of economic tools in service of protecting U.S. national security, including financial sanctions and the work of the Committee on Foreign Investment in the United States. He led the Treasury Department’s comprehensive review on the effectiveness of sanctions as a national security tool. Adeyemo was the primary driver of the Administration’s approach to considering the national security implications of foreign direct investment. He also managed Treasury’s implementation of the Inflation Reduction Act, which was the most significant investment in the economy, energy security, and climate change in a generation, as well as the most significant effort in decades to modernize the Internal Revenue Service. Prior to his appointment as Deputy Treasury Secretary, Adeyemo served as President of the Barack Obama Foundation in Chicago, IL. During the Obama Administration, he served as Deputy National Security Advisor for International Economics and Deputy Director of the National Economic Council at the White House. Adeyemo is a member of the Council on Foreign Relations and the Aspen Economic Strategy Group. He was previously a board member of Demos, a New York-based think tank focused on social, political and economic equity issues, and a senior advisor at the Center for Strategic and International Studies and at Blackrock.

Kenneth I. Chenault, Chairman and Managing Director, General Catalyst; former Chairman and CEO, American Express
Ken Chenault is the Chairman and a Managing Director of General Catalyst. Prior to joining General Catalyst, Ken was Chairman and Chief Executive Officer of American Express, a position he held from 2001 – 2018. Upon Ken’s retirement from American Express, Warren Buffett, the company’s largest shareholder stated, “Ken’s been the gold standard for corporate leadership and the benchmark that I measure others against. ” At General Catalyst, Ken focuses on investing in fast-growing companies that have the potential to become large, fundamental institutions. He also provides invaluable guidance to portfolio companies, particularly to those with an eye towards global markets and responsible innovation, as they scale their teams and products. Ken is recognized as one of the business world’s experts on brands and brand management. He has been honored by multiple publications including Fortune Magazine, which named him as one of the World’s 50 Greatest Leaders in its inaugural list in 2014 and, most recently, in 2021. TIME celebrated Ken together with Ken Frazier in the TIME100 Most Influential People of 2021 list for their corporate and social activism; specifically, for mobilizing hundreds of corporate leaders to advocate for equitable voting rights in the U.S., and for co-founding OneTen, a coalition of leading organizations committed to upskilling, hiring, and promoting people without four-year degrees into family-sustaining jobs. Ken serves on the boards of Airbnb, Berkshire Hathaway, Bilt Rewards, Chief, Guild Education, and the Harvard Corporation. He also serves on the boards of numerous nonprofit organizations, including the Smithsonian Institution’s Advisory Council for the National Museum of African American History and Culture.

Rahm Emanuel, Senior Advisor, Centerview Partners; Former United States Ambassador to Japan
Rahm Emanuel was confirmed in a bipartisan vote as the 31st United States Ambassador to Japan on December 18, 2021. Previously, Ambassador Emanuel was the 55th Mayor of the City of Chicago, a position he held until May 2019. During that time, he made the critical choices necessary to secure Chicago’s future as a global capital. Prior to becoming Mayor, from November 2008 until October 2010, Ambassador Emanuel served as President Barack Obama’s Chief of Staff. In addition to being the President’s top advisor, the Ambassador helped the Obama administration secure the passage of the American Recovery and Reinvestment Act of 2009 and the landmark Patient Protection and Affordable Care Act. Ambassador Emanuel was elected four times as a Member of the U.S. House of Representatives from Illinois’s 5th Congressional District (2002-2008). As Chairman of the House Democratic Caucus, Emanuel helped pass legislation to raise the minimum wage and authored the Great Lakes Restoration Act. From 1993 to 1998, Ambassador Emanuel was a key member of President Bill Clinton’s administration, rising to serve as Senior Advisor to the President for Policy and Politics. During this time, Emanuel served as a legislative liaison to Congress and spearheaded efforts to pass several of President Clinton’s signature achievements, most notably the Federal Assault Weapons Ban, the Brady Handgun Violence Prevention Act, and the historic Balanced Budget Act, which created the Children’s Health Insurance Program that expanded health care coverage to 10 million children. The Ambassador also worked closely with President Joseph R. Biden Jr., then a U.S. Senator, to shepherd the Violence Against Women Act of 1994 through Congress. As a Senior Advisor at Centerview Partners and former Managing Director at Wasserstein Perella & Co., Emanuel brings a depth of financial experience to the post. Ambassador Emanuel graduated from Sarah Lawrence College in 1981 and received a Master’s Degree in Speech and Communication from Northwestern University in 1985. He is married to Amy Rule, and they have three children.

Mellody Hobson, Co-CEO and President, Ariel Investments
As Co-CEO, Mellody is responsible for management, strategic planning and growth for all areas of Ariel. Additionally, she chairs the board of Ariel Investments’ publicly traded mutual funds. Prior to being named Co-CEO, Mellody spent nearly two decades as Ariel’s President. In 2025, she founded Project Level® to change the game in women’s sports. Mellody co-founded Ariel Alternatives, LLC in 2021 and its inaugural private equity fund, Project Black® to scale minority-owned businesses. Beyond Ariel, she serves as a director of JPMorgan Chase and is the former chairman of Starbucks Corporation. Mellody was a long-standing board member of the Estée Lauder Companies and former board chair of DreamWorks Animation, overseeing the company’s sale in 2016. She is deeply committed to philanthropy and is a well-known advocate of financial literacy. Mellody published a New York Times bestselling children’s book, Priceless Facts about Money. She earned her AB from Princeton University’s School of Public and International Affairs.

Jonathan Levin, President, Stanford University
Jonathan Levin became Stanford University’s thirteenth president on August 1, 2024. Levin previously served as the Philip H. Knight Professor and Dean of Stanford Graduate School of Business from 2016 to 2024 and as chair of Stanford’s department of economics from 2011 to 2014. A leading economist, he is widely recognized for his scholarship in industrial organization and market design. President Levin’s scholarly work has spanned topics ranging from incentive contracts to game theory, e-commerce, and health insurance. He has conducted influential research on the organization and design of markets, subprime lending, and empirical methods to study imperfect competition. In 2011, he received the John Bates Clark Medal as the economist under the age of 40 who has made the most significant contribution to economic thought and knowledge. Levin is a fellow of the American Academy of Arts and Sciences, a former Guggenheim Fellow, and a recipient of department and school awards for distinguished teaching. In September 2016, Levin became the tenth dean of the Stanford Graduate School of Business. Under his leadership, Stanford GSB strengthened its position as the preeminent institution of management research and education. The school invested in new research programs, reimagined and significantly increased financial aid, expanded online and global programs, introduced classes for Stanford undergraduates, and developed ambitious collaborations focused on technology, sustainability, and other critical issues for business and society. From 2021 to 2025, Levin served as a member of President Biden’s Council of Advisors on Science and Technology. He is a Trustee of the Gordon and Betty Moore Foundation. He has consulted widely in industry and government. He was part of the international expert group that designed the first vaccine Advance Market Commitment for pneumococcal disease and participated in the design of the FCC’s noted broadcast spectrum incentive auction.

Joseph Manchin III, Former United States Senator from West Virginia
Joseph Manchin III served as a United States Senator for West Virginia from 2010 to 2025, bringing decades of leadership and a commitment to pragmatic, results-driven public service. Throughout his tenure, he was a key member of the Senate Energy and Natural Resources Committee, where he served as Chair, as well as the Appropriations, Armed Services, and Veterans’ Affairs Committees. Prior to his time in the Senate, he served as the 34th Governor of West Virginia (2005-2010) and as West Virginia Secretary of State (2001-2005). A staunch advocate for bipartisanship and commonsense policymaking, Senator Manchin focused on energy security, economic development, and national defense. He championed an all-of-the-above energy strategy that harnessed coal, natural gas, nuclear, and renewables, while emphasizing innovation and sustainability to ensure both environmental and economic stability. His leadership helped shape policies that strengthened American energy independence, revitalized domestic manufacturing, and supported job creation in West Virginia and beyond. Beyond public office, Senator Manchin remains deeply committed to his home state, supporting education, workforce development, and civic engagement initiatives. He continues to advocate for responsible governance, fiscal accountability, and solutions that bridge the partisan divide. A graduate of West Virginia University with a degree in business administration, he has dedicated his life to fostering economic growth and ensuring that the American Dream remains within reach for future generations.

Kevin McCarthy, 55th Speaker of the United States House of Representatives
Kevin McCarthy is the 55th Speaker of the House. Described as a man who exudes “true American grit,” McCarthy’s political journey is the quintessential American story. After starting a small business at the age of 21, McCarthy went back to college to earn his bachelor and master degrees in business. He was rejected for an internship to the congressional seat he later held for seventeen years. McCarthy won the Speakership after a historic 15 ballots, and went on to secure $2 trillion in deficit reduction, all while protecting the full faith and credit of the United States, keeping our government open, and making sure our troops were paid. He also refocused Congress on America’s long-term challenges by creating the first-ever Select Committee on the Chinese Communist Party. Throughout his career, McCarthy fought for a more effective, efficient, and accountable federal government. He also personally recruited and actively supported commonsense candidates for office who have helped reshape the Republican Party – several of whom have become Senators, Governors, and cabinet secretaries. Overall, under his leadership, dozens of new Republican women, minorities, and veterans have been elected to Congress. In Congress, he held nearly every elected leadership position in the House Republican conference and served under three Presidents, during two economic crises, and through consistent political upheaval while always maintaining his approach to governing as a Happy Warrior. McCarthy currently serves as Founder and Chairman of ALFA Institute, a policy think tank to advance America’s global position in the next technological space race of artificial intelligence, advanced defense and aerospace technology, energy and critical mineral resources, and next-generation bio and health advances. McCarthy also serves as Chairman of Watchtower Strategies, a public affairs firm focused on corporate strategic and crisis communications.

Steven Mnuchin, Founder and Managing Partner, Liberty Strategic Capital; 77th United States Secretary of the Treasury
Former Secretary Steven T. Mnuchin serves as the Founder and Managing Partner of Liberty Strategic Capital and chairs the firm’s Investment Committee. Liberty Strategic Capital is a Washington, D.C.-based private equity firm focused on strategic investments in technology, financial services and fintech, and new forms of content. Former Secretary Mnuchin currently serves on the boards of directors of Liberty Strategic Capital portfolio companies New York Flagstar Financial, Inc. (since 2024), Zimperium, Inc. (since 2022) and Cybereason Inc. (since 2021), and previously served on the boards of directors of Contrast Security, Inc. (2022-23) and BlueVoyant, Inc. (2022-23). Prior to founding Liberty, Mr. Mnuchin served as the 77th Secretary of the Treasury from February 2017 through January 2021. As Secretary of the Treasury, Mr. Mnuchin was responsible for leading the U.S. Treasury, whose mission is to maintain a strong economy, foster economic growth, and create job opportunities by promoting the conditions that enable prosperity at home and abroad. He was also responsible for strengthening national security by combating economic threats and protecting the U.S. financial system, as well as managing the U.S. Government’s finances. Mr. Mnuchin also oversaw cybersecurity for the financial services sector and all U.S. Treasury bureaus, including the IRS. Former Secretary Mnuchin played a pivotal role in advancing the President’s economic agenda, including the passage and implementation of the Tax Cuts and JOBS Act and the CARES Act. He also led the U.S. Treasury Department’s regulatory reform efforts. Former Secretary Mnuchin was chair of the Committee on Foreign Investment in the United States (CFIUS) and was a member of the National Security Council. He was responsible for using economic tools to combat terrorist financing and other threats to the United States and its allies. Prior to his confirmation, he served as Founder, Chairman, and Chief Executive Officer of Dune Capital Management. He founded OneWest Bank Group LLC and served as its Chairman and Chief Executive Officer until its sale to CIT Group Inc. Earlier in his career, former Secretary Mnuchin worked at The Goldman Sachs Group, Inc., where he was a Partner and served as Chief Information Officer, with responsibility for the firm’s global information and technology strategy and operations. He has extensive experience in global financial markets and investments. Former Secretary Mnuchin is committed to philanthropic activities and previously served as a member of the boards of directors of the Museum of Contemporary Art Los Angeles (MOCA), the Whitney Museum of Art, the Hirshhorn Museum and Sculpture Garden on the National Mall, the UCLA Health System, the New York Presbyterian Hospital, and the Los Angeles Police Foundation. He was born and raised in New York City and holds a B.A. from Yale University.

John Podesta, Founder, Center for American Progress
John Podesta is the Founder and served as Chair for the Washington, D.C.-based think tank Center for American Progress and a Founder and Chair of the Washington Center for Equitable Growth. Podesta served as Senior Advisor to President Joe Biden and counselor to President Barack Obama, where he was responsible for coordinating the administrations’ climate policy and initiatives. In 2008, he served as co-chair of President Obama’s transition team, where he coordinated the priorities of the incoming administration’s agenda and spearheaded its appointments of cabinet secretaries and senior political appointees. Podesta served as White House Chief of Staff to President William J. Clinton, where he was a member of the president’s cabinet and served on the National Security Council. Additionally, Podesta has held numerous positions on Capitol Hill, including counselor to Democratic Leader Sen. Thomas A. Daschle (1995-1996) and served on the President’s Global Development Council and the UN Secretary General’s High-Level Panel of Eminent Persons on the Post-2015 Development Agenda. In 2016, Podesta chaired Hillary Clinton’s campaign for president. A Chicago native, Podesta is a graduate of Knox College and the Georgetown University Law Center, where he is currently a visiting professor of law. He is the author of The Power of Progress: How America’s Progressives Can (Once Again) Save Our Economy, Our Climate and Our Country.

Gina Raimondo, Distinguished Fellow, Council on Foreign Relations; 40th United States Secretary of Commerce
Gina M. Raimondo is a distinguished fellow at the Council on Foreign Relations (CFR). From March 2021 through January 2025 she was the United States Secretary of Commerce. Under her leadership, the Department of Commerce made historic investments in Internet access, manufacturing, economic development, workforce training, supply chain resiliency, and climate readiness through the implementation of the Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act. Raimondo was the seventy-fifth governor of Rhode Island and its first woman governor. As governor, she kick-started the state’s economy and made record investments in infrastructure, education, and job training by focusing on creating economic opportunities and good-paying jobs for all Rhode Islanders. She also served as the Chair of the Democratic Governors Association (DGA). During her term, she rebuilt the entire DGA leadership team, bolstered the fundraising, communications, and research teams, and grew the digital program exponentially. Raimondo earned her BA in economics from Harvard University and a PhD from Oxford University through a Rhodes Scholarship. She is a graduate of Yale Law School and clerked for U.S. District Judge Kimba Wood. The 2016 recipient of Yale Law School’s prestigious Alumni Award of Merit, Secretary Raimondo is an alumni fellow on the Yale Board of Trustees. She is a member of the Council of Foreign Relations.

John Waldron, President and Chief Operating Officer, The Goldman Sachs Group, Inc.
John Waldron is president and chief operating officer and a member of the Board of Directors of the Goldman Sachs Group, Inc. He is a member of the Goldman Sachs Management Committee, co-chair of the Firmwide Enterprise Risk Committee, and chair of the Firmwide Reputational Risk Committee. John is a member of the Executive Committee of the Institute of International Finance, a member of the International Advisory Council of the China Securities Regulatory Commission, a member of the US-China Business Council and a member of the International Advisory Panel of the Monetary Authority of Singapore. In addition, John is a member of the Board of Directors of the Cleveland Clinic, a member of the Board of Directors of Lincoln Center for the Performing Arts in New York City, a member of the Board of Trustees of Middlebury College, a member of the Board of Trustees of Southern Methodist University and a member of the Council on Foreign Relations. John graduated Phi Beta Kappa from Middlebury College with a BA in English in 1992.

Meg Whitman, United States Ambassador to Kenya (Ret.); Former CEO, Hewlett-Packard; Former CEO, eBay Inc.
Meg Whitman was confirmed in a unanimous vote by the U.S. Senate as the eighteenth United States Ambassador to Kenya on July 14, 2022. In Kenya she focused on accelerating economic growth and development, forged new conservation initiatives, supported good governance and democratic principles and oversaw significant humanitarian assistance. She returned home in December 2024 with the change in U.S. administration. Ambassador Whitman has significant experience leading business organizations, from start-ups to large multinational companies in Silicon Valley. She has served as the President and CEO of Hewlett Packard Enterprise and the Hewlett-Packard Company, both multinational information technology companies. She also served as President and CEO of eBay Inc, an online marketplace and digital payments company. Ms. Whitman has also been a member of numerous corporate boards of directors, including those of Procter & Gamble and General Motors. Committed to equality in education and protection of the environment, Ambassador Whitman has been National Board Chair of Teach For America and a Member of the Board of Trustees of The Nature Conservancy. Ambassador Whitman is married to Dr. Griffith Harsh, a neurosurgeon. They have two grown sons and three grandchildren. Whitman holds an MBA from Harvard Business School and an AB in Economics from Princeton University.

Heidi Williams, Orville E. Dryfoos Professor in Economics and Public Affairs, Dartmouth College
Heidi Williams is the Orville E. Dryfoos Professor in Economics and Public Affairs at Dartmouth College. She is currently lead editor of the Journal of Economic Perspectives, and works part-time at the Congressional Budget Office. Together with Ben Jones, Heidi co-directs the National Bureau of Economic Research Innovation Policy working group. She is also Director of Science Policy at the Institute for Progress and a nonresident senior fellow at the Hutchins Center on Fiscal and Monetary Policy at Brookings.  Heidi received her AB in mathematics from Dartmouth College in 2003, her MSc in development economics from Oxford University in 2004, and her PhD in economics from Harvard in 2010. She is a Fellow of the American Academy of Arts and Sciences and of the Econometric Society, and is the recipient of a MacArthur Foundation Fellowship (2015).

Janet L. Yellen, 78th United States Secretary of the Treasury
Janet L. Yellen served as the 78th Secretary of the United States Treasury from 2021 through 2025. Previously, she was a Distinguished Fellow in Residence with the Economic Studies Program at the Brookings Institution and former chair of the Federal Reserve Board. Yellen also served as vice chair of the Federal Reserve Board, president and chief executive officer of the Federal Reserve Bank of San Francisco, as well as chair of the White House Council of Economic Advisers. Yellen is professor emerita at the University of California–Berkeley where she was the Eugene E. and Catherine M. Trefethen Professor of Business and Professor of Economics and has been a faculty member since 1980. In 2012, Yellen was appointed distinguished fellow of the American Economic Association. She served as President of the American Economic Association in 2020. Yellen is a member of the American Academy of Arts and Sciences, the Council on Foreign Relations, and the Economic Strategy Group of the Aspen Institute. Yellen graduated summa cum laude from Brown University with a degree in economics in 1967 and received her Ph.D. in economics from Yale University in 1971. Yale awarded Yellen the Wilbur Cross Medal in 1997. In 1998, Brown awarded her an Honorary Doctor of Laws degree. She has also received honorary degrees from Bard College, NYU, the London School of Economics and Political Science, the University of Warwick, Yale, the University of Michigan and the University of Pennsylvania. Her scholarship has covered a range of macroeconomic issues, with a special focus on the causes, mechanisms, and implications of unemployment.

Transparency in College Pricing: Still More Work to Do

Full Policy Brief

Confusion about college pricing is longstanding and persistent. Such confusion stems from the gap between the full cost of attendance, or “sticker price,” and the lower net amount that many students pay after receiving need-based or merit-based financial aid awards. Media reports about college costs frequently cite full sticker prices, perpetuating misinformation and confusion about the actual cost to families.

Fewer students today pay the sticker price than in previous decades. As of the 2019–2020 academic year (the latest year for which data are available), only 26 percent of in-state students at public colleges and 16 percent of students at private, nonprofit colleges paid the full sticker price. For many students, financial aid lowers the price of attendance below that level. But even among higher-income students who are ineligible for need-based financial aid, in 2019–2020 only 47 percent and 28 percent paid the stick er price at public and private non-profit institutions, respectively; for rest of these students, merit-based aid lowered the cost.

Confusion about the cost of college persists despite developments during the past decade that have attempted to clarify how much different students will pay. A 2023 survey conducted by the Association of American Universities found that nearly half of US adults surveyed mistakenly think that universities charge all students the same tuition, regardless of family income. The Lumina Foundation-Gallup State of Higher Education 2024 study finds that less than one-quarter of US adults without college degrees could estimate—to within $5,000 of the actual figure—the annual net cost of a bachelor’s degree from a public college.

This policy brief assesses recent efforts to improve transparency in college pricing and concludes that we still have a long way to go. Improving students’ and families’ understanding about college pricing will equip them to make informed decisions.

Top 12 Charts of 2024 from the AESG

As a group devoted to advancing evidence-based economic policy, the AESG appreciates the powerful role that charts play in telling the story of our economy. Enjoy twelve figures that showcase our work in 2024!

Figure 1: Manufacturing’s share of employment in the US has fallen consistently since the end of the Second World War.

In his AESG paper, Protectionism is Failing and Wrongheaded, Michael Strain argues that the goals of protectionist trade policies, including boosting US manufacturing jobs, are misguided. He points out that manufacturing employment in the US has been on the decline since the middle of the twentieth century.

Figure 2: The US labor market transformed over the past century due to productivity growth enabled by General Purpose Technologies (GPTs).

The US labor market transformed over the past century due to productivity growth enabled by General Purpose Technologies (GPTs). In their paper, Technological Disruption in the US Labor Market, David Deming, Christopher Ong, and Lawrence H. Summers explore past episodes of technological disruption in the US labor market, with the goal of learning lessons about the likely future impact of artificial intelligence.

Figure 3: The labor market is set to end 2024 nearly where Fed officials projected a year ago.

Luke Pardue’s December blog post examines employment trends over the past twelve months. Figure 2 illustrates that, while the path of the labor market has been uncertain this year, looking just at the unemployment rate, the job market is set to end 2024 quite close to where Federal Reserve officials predicted last December.

Figure 4: Construction costs in the US, particularly for urban transit megaprojects, are among the highest in the world.

Zachary Liscow’s paper, State Capacity for Building Infrastructure, highlights how infrastructure construction in the US is more costly and takes more time than other developed countries. For example, the US ranks fifth-highest in spending per kilometer of urban transit compared to other OECD countries.

Figure 5: Under a range of plausible policy and economic scenarios, the US federal debt is on an unsustainable path

In his paper, Eight Questions—and Some Answers—on the US Fiscal Situation, Jason Furman examines the current US fiscal situation and outlook. Even under scenarios with higher-than-expected productivity or lower-than-forecast interest rates, he finds that the US federal debt will continue to rise as a share of output through the next decade.

Figure 6: In the US, both violent and property crime rates fell nearly continuously from the early 1990s until mid-2020.

Jennifer Doleac’s paper, Why Crime Matters, and What to Do About It, describes recent trends in criminal activity across the US. Although measures of certain violent crimes have come down from their post-pandemic spike, she concludes that crime continues to be a first-order problem for a large number of communities.

Figure 7: US worker productivity is growing at its fastest pace since the decade-long surge of the 1990s.

In a Washington Post op-ed, U.S. productivity is popping. And it’s not because of AI, and an AESG IN BRIEF, The Recent Rise in US Labor Productivity, AESG Policy Director Luke Pardue attributed the recent upswing in US labor productivity in part to a surge in new business formation in the US. Figure 2 shows that in the first quarter of 2024, new business applications were tracking above 2019 levels by 54%.

Figure 8: CHIPS and Science Act investments tend to be in areas with both high STEM talent and above-average employment rates.

Luke Pardue’s IN BRIEF, Building Security in the Semiconductor Supply Chain, examines the talent needs of the semiconductor industry and analyzes data on the location of recent public and private investment in chip production. Such investments are largely in high-talent areas, an encouraging sign for their eventual success.

Figure 9: A higher share of women in the 35-to-44 age range across all races, income levels, employment statuses, regions and broad education groups are childless.

A Wall Street Journal article highlighted research from AESG Director Melissa Kearney, Author Phillip Levine, and Policy Director Luke Pardue demonstrating that the rise in childlessness amongst Americans is driving the decline in US birth rates.

Figure 10: Men spend an average of 6.6 non-sleeping hours alone each day, compared to 5.4 hours for women.

The Wall Street Journal featured data from Luke Pardue’s October blog post, The Widening Economic and Social Gaps Between Young Men and Women, on the decline in men’s labor force participation and increase in young men’s time spent alone.

Figure 11: The eight Ivy League schools accounted for less than 1 percent of total undergraduate enrollment in Fall of 2022.

In a blog post accompanying Melissa Kearney’s appearance on Bloomberg’s Wall Street Week, Luke Pardue points out that while conversations about higher education in America are often dominated by the Ivy League, these eight schools play a relatively small role in the overall college landscape and in the process of intergenerational economic mobility in America.

Figure 12: Recent Foreign Direct Investment flows are tied to the world’s major centers of tax avoidance.

Brad Setser’s AESG paper, The Surprising Resilience of Globalization: An Examination of Claims of Economic Fragmentation, evaluates the current landscape of global economic integration. Setser points out that a large share of the historical rise – and recent decline – in global financial flows can be attributed to tax avoidance strategies by multinational companies.

2024 Job Market Recap: Slow but Steady Labor Market Growth

The past year has been one marked by several significant swings in the labor market. It featured strong (possibly, immigration-fueled) growth in the labor market at the start, a sharp rise in the unemployment rate that fueled speculation of an incoming recession over the summer, and Hurricane-affected data to round out the fall. After all these moves, where did the job market end in 2024 compared to where it began – and where might it be headed in 2025?

Looking through November, the job market is rounding out 2024 in a cool – but still healthy – spot. Job growth has slowed, and the unemployment rate has risen, but the US avoided both a more significant slowdown in employment growth and a steeper rise in the unemployment rate that could have brought on a recession. Notwithstanding the enormous policy uncertainty in the coming year, economists generally predict a much calmer year in the labor market data ahead.

1. Monthly Employment Growth Slowed Throughout 2024

Although the monthly job gains in November returned to levels similar to those seen in January, the three month average of employment growth – which cuts through much of the noise in monthly data – tells the story of a labor market that has slowed considerably throughout the year. In January, the three month average stood at 243,000 jobs added per month, a pace that has fallen to 173,000 in November.

The question for 2025 will be: what pace of job growth can the economy sustain without overheating? That answer depends in part on the rate of labor force growth (which has stalled since the pandemic) but looking historically, the US economy averaged 166,000 jobs added per month across 2019 without generating inflation – just slightly below where we are now.

2. Despite heightened uncertainty, the labor market ended up close to where Fed officials predicted in December 2023.

A second aspect of the labor market slowdown in 2024 was the gradual rise in the unemployment rate across the year, from 3.7% in January to 4.2% in November. The increase in the unemployment rate garnered much attention throughout the year, particularly after it triggered the Sahm Rule recession indicator in July. But, despite all the focus, the unemployment rate in November is about where Federal Reserve officials forecast it would be in their Summary of Economic Projections (SEP) from December of last year. Currently, the unemployment rate is averaging 4.15% in Q4 2024 (excluding December), compared to the median Fed projection last December of 4.1%. This means that, as early as last year, monetary policy officials believed such an increase in the unemployment rate was consistent with a gradually cooling – but not recessionary – economic environment.

A second major question looming in 2025 is how much further the unemployment rate will rise. If Federal Reserve projections from this December can serve as a guide for next year, the answer is “not much.” The median projection for the unemployment rate across Q4 2025 is 4.3%. Of course, that projection comes with the caveats that it assumes each participant’s “appropriate path” of monetary policy and is surrounded by a large degree of uncertainty with respect to policy outside of the Fed’s control, but it seems that Fed officials believe we are currently in a healthy long-run environment with the unemployment rate holding steady.

Book Launch Recap: Strengthening America’s Economic Dynamism

This week the AESG published our seventh annual policy volume, Strengthening America’s Economic Dynamism. This year’s volume features six papers covering topics including US trade and industrial policy, America’s fiscal and state capacity, the impact of advances in artificial intelligence on the labor market, and evidence-based strategies to make communities safer. These papers also provided the basis for a number of essays and opinion pieces published by AESG authors throughout the fall.

On Tuesday the AESG hosted an event for the launch of the policy volume that featured discussions with economists and policymakers about some of the most pressing topics in US economic policy.

Session I of our book launch event featured Colorado Senator Michael Bennet in conversation with Washington Post opinion columnist Catherine Rampell about economic policy challenges facing the new Congress. Their discussion touched on Americans’ desire for a new economic paradigm, policies to help combat inequality, the future of US tax policy, and the country’s rising deficit.

“If you look at most of the polling over the last two years, when people were asked about the economy, what you would hear is that 70 percent of people say they want a radical transformation of the economy,” said Senator Bennet.

When discussing his priorities for the next Congress, the Senator underscored the need to address the nation’s fiscal situation in a bipartisan way. “We have to start addressing this deficit. We’re at a point where our interest expense means we’re paying more to service our debt this year than we are to fund the military in the United States,” he said. “We’re never going to be able to address this deficit unless we do it in a bipartisan way. Maybe this will be a moment for us to do it. I think people are beginning to feel that we are reaching an outer edge that is worrisome.”

Session II was a panel discussion about post-election economic policies, featuring Jason Furman, Aetna Professor of the Practice of Economic Policy at Harvard University, Michael R. Strain, Director of Economic Policy Studies at the American Enterprise Institute, and Allison Schrager, Senior Fellow at the Manhattan Institute, moderated by AESG Director Melissa S. Kearney. The panel focused on what the incoming Congress and presidential administration should do to advance economic growth, innovation, and widespread economic security and prosperity.

On the country’s rising debt, Furman remarked, “It is not at all reasonable to expect that we’re going to grow our way out of this problem, which means we’re going to need to do something. I think that starts with the easiest steps which is either not extending the tax cuts or paying for their extension.”

On trade, Strain argued, “Even if you share the President’s goals, the evidence shows that putting tariffs on imports, which invites retaliation from other nations, leads to declining manufacturing employment and higher costs for domestic manufacturers and doesn’t succeed in weakening economic ties.”

On the public’s growing discontent with the existing economic paradigm, Schrager noted, “We are in a state of economic transition. If you look at economic history and you look at the move from agriculture to industrialization, that also took a long time and made people very unhappy. But I think we can all agree it improved everyone’s lifestyle a lot. Trying to turn back the past is not the solution, but I think we can do more to help people rise and adapt.”

Watch a recording of the event here.

Photos by Allison Shelley.

Strengthening America’s Economic Dynamism

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The Aspen Economic Strategy Group’s seventh annual policy volume focuses on the theme, Strengthening America’s Economic Dynamism. The volume’s publication comes at a time when US policymakers are turning away from free-market principles in favor of protectionist policies and more active government-directed industrial policy. These shifts, combined with growing economic and political difficulties including the country’s mounting debt, limited state capacity, and rapidly advancing technologies, have the potential to hinder economic dynamism and growth. Our 2024 policy volume draws on these themes to answer questions about the state of the US economy amidst an era of rising global tensions, technological change, and a populist backlash to the economic status quo.

Introduction
By Melissa S. Kearney and Luke Pardue

PART I: ECONOMIC NATIONALISM IN AN ERA OF GLOBALIZATION

Protectionism is Failing and Wrongheaded: An Evaluation of the Post-2017 Shift toward Trade Wars and Industrial Policy
By Michael R. Strain

The Surprising Resilience of Globalization: An Examination of Claims of Economic Fragmentation
By Brad Setser

PART II: FISCAL AND STATE CAPACITY

State Capacity for Building Infrastructure
By Zachary Liscow

Eight Questions—and Some Answers—On the U.S. Fiscal Situation
By Jason Furman

PART III: WORKERS, FIRMS, AND COMMUNITIES

Technological Disruption in the US Labor Market
By David Deming, Christopher Ong, and Lawrence H. Summers

Why Crime Matters, and What to Do About It
By Jennifer Doleac

Why Crime Matters, and What to Do About It

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In this paper, Jennifer Doleac describes what is known about crime trends in the US and outlines the best evidence to date on the effectiveness of various approaches to reducing crime through prevention, deterrence, and rehabilitation.

Crime in the US rose during the 1980s and early 1990s before declining steadily until 2020. During the COVID-19 pandemic, homicides, shootings, and motor vehicle thefts spiked, but by late 2023, overall rates of homicides and shootings had returned to their pre-pandemic levels. Because less serious offenses such as carjackings are much more difficult to track with nationwide data systems, we currently have an incomplete picture of how those crimes have trended in recent years across the country. Certain types of crime remain high, however, and Doleac emphasizes that crime continues to disproportionately affect certain urban areas and communities.

Doleac considers the costs of crime on victims and communities through both direct and indirect channels. Direct victim costs encompass medical expenses, cash or property losses, lost earnings, and pain and suffering. In addition to directly affecting victims, crime indirectly affects broader communities through reduced property values, diminished business activity, reduced school attendance, and increased mental health issues like anxiety and depression arising from fear for personal safety and property.

The costs of crime also come in the form of resources devoted to law enforcement and punishment. The majority of such efforts are conducted by state and local governments, which spent 7.5 percent of their overall budgets on the criminal justice system in 2021, amounting to $274 billion. These funds cover the employment of law enforcement personnel, the costs of the judicial system, and the costs of housing prisoners in correctional facilities. The federal government contributes an additional $58 billion to criminal justice expenses annually, or 1.5 percent of its budget. Combining the direct—tangible and intangible—costs to victims with the costs of law enforcement and punishment, researchers estimate that this aggregate cost of crime in the United States (excluding indirect costs) totals $4.7–5.8 trillion each year.

Given the high cost of crime to victims and affected communities, it is important to allocate crime-prevention efforts to interventions with evidence of effectiveness. Doleac proposes three effective channels to address crime through, and examines the effective strategies in each one.

1. Preventing someone’s first interaction with the criminal justice system.

Studies across several cities have found that offering summer jobs for teens, which provides positive career exposure and mentorship, reduces future violent-crime arrests and lowers mortality due to gun violence. Additionally, cognitive behavioral therapy pushes individuals to think more deliberately about the relative costs and benefits of their actions, and has been proven to cause meaningful reductions in violent arrests and recidivism. Over the long term, investments in improving the health of children—such as removing lead from the environment and reducing air pollution—are extremely cost-effective, causing large improvements in educational attainment and reductions in criminal justice involvement.

2. Deterring crime in the community.

At the community level, Doleac proposes two main strategies for cost-effective crime deterrence. First, putting more police on the streets remains an effective, evidence-based way to reduce crime relatively quickly. Second, employing technology such as cameras, DNA databases, and blood-alcohol content monitors can enhance crime detection at a lower cost than increasing police personnel.

3. Rehabilitating people with past criminal justice involvement.

To enhance rehabilitation, erring toward leniency for first-time offenders—giving them a second chance to avoid a first criminal record—dramatically reduces recidivism. Doleac also recommends the broader use of electronic monitoring systems as an alternative to prison sentences. Making mental health care affordable and easier to access is also a smart crime-reduction strategy. Finally, bans on public benefits for those with a criminal record should be repealed, as these bans not only increase recidivism rates but also increase future criminal activity for children of parents with criminal records.

Doleac concludes by emphasizing the importance of three approaches in particular as the most likely to have meaningful effects: investing in early life interventions, including reducing young children’s exposure to lead; making better use of police and technology to detect and deter crime; and increasing access to mental health care for high-risk populations. As crime continues to be a challenge for communities across the United States, it is not only important to invest in crime prevention strategies, but to ensure those strategies are effective and well implemented.

Suggested Citation: Doleac, Jennifer., 2024. “Why Crime Matters, and What to do about it” In Strengthening America’s Economic Dynamism, edited by Melissa S. Kearney and Luke Pardue. Washington, DC: Aspen Institute. https://doi.org/10.5281/zenodo.13975447.

State Capacity for Building Infrastructure

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Data Appendix

This paper, by Zachary Liscow, examines state capacity for infrastructure construction in the United States. It identifies three elements of state capacity that drive up costs and slow down timelines: insufficient personnel, onerous procedures, and a lack of adequate tools. Liscow offers specific suggestions about ways to address these challenges and improve US public capacity to carry out infrastructure projects.

High costs, lengthy construction timelines, and increased input prices are core hindrances to US state capacity. The cost of building urban-transit infrastructure in the US is approximately $560 million per kilometer, over two and a half times the OECD average. These costs have increased sharply over time, more than tripling between the 1960s and 1980s and continuing to rise since.

At the same time, construction timelines are inefficiently long. For instance, when it comes to energy infrastructure, the typical deployment timeline for offshore wind in the US is between three and five years, and for extra-high-voltage power lines, the typical timeline is between five and 13 years.

Liscow identifies three forces driving these challenges in the US:

Personnel
Employment of government workers available for state infrastructure capacity have barely increased or have declined over time, and federal government pay has fallen behind private-sector pay over time. As there are fewer government workers per dollar of work done, planning and management are increasingly outsourced. To address these issues, Liscow recommends employing more infrastructure experts and aligning public-sector salaries with those in the private sector to attract skilled professionals. Expanding the size and quality of the government workforce in this respect would improve planning efficiency and reduce timelines, generating its own cost savings.

Cumbersome Procedures
It takes a relatively long amount of time to acquire infrastructure permits in the US, compared to other developed countries, and the process is lengthened by substantial litigation around infrastructure permitting. Liscow proposes simplifying administrative procedures and judicial-review rules to streamline the construction process. Empowering the executive branch relative to the judiciary can reduce the use of litigation to stall projects. He recommends streamlining feedback processes to better understand public preferences while reducing the time to gather such information.

Lack of Tools
Data infrastructure and transparency are weak, making it hard for the government and the public alike to understand the challenges at hand. Coordinated long-term planning is also lacking, hampering the development of renewable energy transmission lines and transportation infrastructure. Liscow first recommends that federal and state governments invest in better data systems, which would enable agencies to gain better insight into their projects and help the public advocate for more efficient spending. Second, coordinated planning would allow agencies to hire appropriate personnel and accelerate project execution. Moreover, well-developed project plans could mitigate potential litigation by addressing a wider array of stakeholder interests from the outset.

Liscow concludes by emphasizing the importance of state capacity to the effective use of government infrastructure-construction dollars. State capacity is not just an issue for infrastructure. In a wide range of government projects, hiring enough government personnel, paying enough to attract talent, having an appropriate number of procedural rules, and giving personnel the tools to succeed can help make government work better—producing better outcomes for the public and building trust in government.

Suggested Citation: Liscow, Zachary., 2024. “State Capacity for Building Infrastructure” In Strengthening America’s Economic Dynamism, edited by Melissa S. Kearney and Luke Pardue. Washington, DC: Aspen Institute. https://doi.org/10.5281/zenodo.14036826.

Eight Questions—and Some Answers—on the US Fiscal Situation

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In this paper, Jason Furman addresses eight specific questions essential to understanding the US fiscal situation and what policymakers can do to address the federal debt. He finds that an adjustment of between 0.7 and 4.6 percent of GDP is necessary to stabilize the debt over the next decade, and he proposes a broad set of reforms to achieve such an adjustment, including tax reform, PAYGO conditions for new spending programs, and reforms to Social Security and Medicare.

In fiscal years 2022, 2023, and 2024, the US ran an average deficit of 6 percent of GDP, despite a strong economy. As a result, 2024 ended with the debt at about 99 percent of GDP, higher than it had been in any year except 1945 and 1946. The CBO expects the primary deficit (excluding interest payments on the debt) to improve over the next decade, but that development will be offset by higher interest rates leading to larger interest payments on the debt. In short, the fiscal path remains unsustainable: The federal deficit ranges from 6 to 10 percent of GDP, and the debt will likely reach between 111 and 141 percent of GDP by 2030.

Furman emphasizes that, while the “known knowns” of rising debt, such as crowding out of private investment, are not particularly large, the “unknown unknowns” are potentially much larger and even more consequential. For instance, there are growing concerns about whether the Treasury will have access to the necessary borrowing ability in the future, should debt levels rise acutely. Although the likelihood of a fiscal crisis may seem low, its potential consequences would be severe.

The estimated deficit reduction needed to stabilize the debt by 2034 depends on the path of policy and on economic variables, such as interest rates and productivity growth. Under the scenarios Furman explores in this paper, an adjustment of 0.7 and 4.6 percent of GDP in higher taxes or lower noninterest spending is necessary to stabilize debt over the next decade (equivalent to between $2 trillion and $11 trillion in adjustments).

Furman reviews the likely impact of a menu of possible tax and spending proposals, highlighting several key takeaways. First, revenue from corporations and high-income individuals is not sufficient to close the fiscal gap. For instance, such provisions in the Biden administration’s 2025 budget would raise about 1.3 percent of GDP in revenue. A more aggressive set of proposals would likely run into Laffer-curve constraints before revenues reached 2 percent of GDP.

Second, extending the 2017 tax cuts would add another 1.5 percent of GDP to the fiscal gap, substantially exacerbating the situation. Third, outside cuts to Social Security, not even relatively dramatic spending cuts in other programs would come close to reducing the deficit by even 1 percent of GDP. Finally, restoring solvency to Social Security and Medicare through tax or benefit changes would close about 1.5 percent of the current law deficit.

Policy Recommendations

Furman concludes by recommending that policymakers balance the primary budget, which excludes interest payments, by 2030. Achieving this goal would stabilize the debt at 125 percent of GDP and, under both CBO and market interest rate forecasts, would keep interest payments below 2 percent of GDP. Debt would then, in turn, start to gradually fall as a percent of GDP—which is essential, given that periodic emergencies (such as wars, financial crises, and pandemics) ratchet up the debt-to-GDP ratio.

To achieve this outcome, he proposes that policymakers undertake the following four measures:

Do not pass any new tax legislation in 2025, unless it includes a reform plan that increases revenues by 0.5 percent of GDP relative to current law.
Implement a Super PAYGO system for all future legislation, where savings would exceed costs by 25 percent.
Reform Social Security and Medicare to ensure the trust funds’ solvency for the next 75 years.
Allow for flexibility to address economic and international emergencies.

Suggested Citation: Furman, Jason., 2024. “Eight Questions—and Some Answers—on the US Fiscal Situation” In Strengthening America’s Economic Dynamism, edited by Melissa S. Kearney and Luke Pardue. Washington, DC: Aspen Institute. https://doi.org/10.5281/zenodo.14036808.