Archive for category: Lectures

February 24, 2014

National Association of Business Economics

NABE speech – Lawrence H. Summers

“2014 Year of Anniversaries,” Globalist of Year Award, Canadian International Council, April 9, 2014.  Read the speech here.

“US Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound,” National Association of Business Economics, February 24, 2014. Read the speech here.

Washington, DC

November 8, 2013

I am very glad for the opportunity to be here.  I had an occasion to speak some years ago about Stan’s remarkable accomplishments at the IMF when he left the IMF, and I had an occasion some months ago to speak about his remarkable accomplishments at the Israeli Central Bank when he left the Israeli Central Bank.  So, I will not speak about either of those accomplishments this afternoon.

Instead, the number that is on my mind is a number that I would guess is entirely unfamiliar to most of the people in this room, but is familiar to all of the people on this stage, and that is 14.462.  That was the course number for Stan Fischer’s class on monetary economics at MIT for graduate students.  It was an important part of why I chose to spend my life as I have, as a macroeconomist, and I strongly suspect that the same is true for Olivier [Blanchard], and for Ben [Bernanke], and for Ken [Rogoff].

It was a remarkable intellectual experience, and it was remarkable also because Stan never lost sight of the fact that this was not just an intellectual game.  He emphasized that getting these questions right made a profound difference in the lives of nations and their peoples.  So, I will leave it to others to talk about the IMF and Israel, and I will say to you, Stan, thank you on behalf of all of us for 14.462, and for all you have taught us ever since.

I agree with the vast majority of what has just been said [by Ben Bernanke, Stan Fischer and Ken Rogoff]  – the importance of moving rapidly; the importance of providing liquidity decisively; the importance of not allowing financial problems to languish; the importance of erecting sound and comprehensive frameworks to prevent future crises.  Were I a member of the official sector, I would discourse at some length on each of those themes in a sound way, or in what I would hope would be a sound way.  But, I’m not part of the official sector, so I’m not going to talk about any of that.

I’m going to talk about something else that seems to me to be profoundly connected, and that is the nagging concern that finance is all too important to leave entirely to financiers or even to financial officials.  Financial stability is indeed a necessary condition for satisfactory economic performance but it is, as those focused on finance sometimes fail to recognize, far from sufficient.

We have all agreed, and I think our agreement is warranted, that a remarkable job was done in containing the 2007-2008 crisis.  That an event that in the fall of 2008 and winter of 2009 that appeared, by most of the statistics – GDP, industrial production, employment, world trade, the stock market – worse than the fall of 1929 and the winter of 1930, ended up in a way that bears very little resemblance to the Great Depression.  That is a huge achievement which we rightly celebrate.

But there is, I think, another aspect of the situation that warrants our close attention and tends to receive insufficient reflection, and it is this:  four years ago, in the fall of 2009, the financial panic had been arrested.  The TARP money had been paid back, credit spreads had substantially normalized; there was no panic in the air. To have normalized financial conditions so rapidly so soon after a panic was no small achievement.

Yet, in the four years since financial normalization, the share of adults who are working has not increased at all and GDP has fallen further and further behind potential, as we would have defined it in the fall of 2009.  And the American experience of dismal economic performance in the wake of financial crisis is not unique, as Ken Rogoff and Carmen Reinhart’s work has documented.  Japan provides a particularly clear example.   I remember at the beginning of the Clinton administration, we engaged in a set of long run global economic projections.  Japan’s real GDP today in 2013 is little more than half of what we at the Treasury or the Fed or the World Bank or the IMF predicted in 1993.

It is a central pillar of both classical models and Keynesian models that stabilization policy is all about fluctuations – fluctuations around a given mean – and that the achievable goal and therefore the proper objective of macroeconomic policy is to have less volatility.  I wonder if a set of older and much more radical ideas that I have to say were pretty firmly rejected in 14.462, Stan, a set of older ideas that went under the phrase secular stagnation, are not profoundly important in understanding Japan’s experience in the 1990s, and may not be without relevance to America’s experience today.

Let me say a little bit more about why I’m led to think in those terms.  If you go back and you study the economy prior to the crisis, there is something a little bit odd.  Many people believe that monetary policy was too easy.  Everybody agrees that there was a vast amount of imprudent lending going on.  Almost everybody believes that wealth, as it was experienced by households, was in excess of its reality:  too much easy money, too much borrowing, too much wealth.  Was there a great boom?  Capacity utilization wasn’t under any great pressure.  Unemployment wasn’t at any remarkably low level.  Inflation was entirely quiescent.  So, somehow, even a great bubble wasn’t enough to produce any excess in aggregate demand.

Now, think about the period after the financial crisis.  I always like to think of these crises as analogous to a power failure or analogous to what would happen if all the telephones were shut off for some time.  Consider such an event.  The network would collapse.  The connections would go away.  And output would, of course, drop very rapidly.  There would be a set of economists who would sit around explaining that electricity was only 4% of the economy, and so if you lost 80% of electricity, you couldn’t possibly have lost more than 3% of the economy. Perhaps in Minnesota or Chicago there would be people writing such a paper, but most others would recognize this as a case where the evidence of the eyes trumped the logic of straightforward microeconomic theory.

And we would understand that somehow, even if we didn’t exactly understand it in the model, that when there wasn’t any electricity, there wasn’t really going to be much economy.  Something similar was true with respect to financial flows and financial interconnection.  And that’s why it is so important to get the lights back on, and that’s why it’s so important to contain the financial system.

But imagine my experiment where say for a few months, 80% of the electricity went off.  GDP would collapse.  Then ask yourself, what do you think would happen to GDP afterwards?  You would kind of expect that there would be a lot of catch up, that all the stuff where inventories got run down would get produced much faster.  So, you’d actually expect that once things normalized, you’d get more GDP than you otherwise would have had, not that four years later, you’d still be having substantially less than you had before.  So, there’s something odd about financial normalization, if panic was our whole problem, to have continued slow growth.

So, what’s an explanation that would fit both of these observations?  Suppose that the short-term real interest rate that was consistent with full employment had fallen to -2% or -3% sometime in the middle of the last decade.  Then, what would happen?  Then, even with artificial stimulus to demand coming from all this financial imprudence, you wouldn’t see any excess demand.  And even with a relative resumption of normal credit conditions, you’d have a lot of difficulty getting back to full employment.

Yes, it has been demonstrated absolutely conclusively that panics are terrible and that monetary policy can contain them when the interest rate is zero.  It has been demonstrated less conclusively, but presumptively, that when short-term interest rates are zero, monetary policy can affect a constellation of other asset prices in ways that support demand even when the short-term interest rate can’t be lowered.  Just how large that impact is on demand is less clear, but it is there.

But imagine a situation where natural and equilibrium interest rates have fallen significantly below zero.  Then, conventional macroeconomic thinking leaves us in a very serious problem, because we all seem to agree that whereas you can keep the federal funds rate at a low level forever, it’s much harder to do extraordinary measures beyond that forever; but, the underlying problem may be there forever.  It’s much more difficult to say, well, we only needed deficits during the short interval of the crisis if equilibrium interest rates cannot be achieved given the prevailing rate of inflation.

If this view is correct, most of what might be done under the aegis of preventing a future crisis would be counterproductive, because it would, in one way or another, raise the cost of financial inter-mediation, and therefore operate to lower the equilibrium interest rate on safe liquid securities.

Now, this may all be madness, and I may not have this right at all.  But it does seem to me that four years after the successful combating of crisis, since there’s really no evidence of growth that is restoring equilibrium, one has to be concerned about a policy agenda that is doing less with monetary policy than has been done before, doing less with fiscal policy than has been done before, and taking steps whose basic purpose is to cause there to be less lending, borrowing, and inflated asset prices than there were before.

So, my lesson from this crisis, and my overarching lesson, which I have to say I think the world has under-internalized, is that it is not over until it is over, and that time is surely not right now, and cannot be judged relative to the extent of financial panic. And that we may well need, in the years ahead, to think about how we manage an economy in which the zero nominal interest rate is a chronic and systemic inhibitor of economic activity holding our economies back below their potential.  Thank you very much.

__________________________________________

IMF Fourteenth Annual Research Conference in Honor of Stanley Fischer, November 8, 2013

“The tension between politics and economics,” The Buttonwood Gathering, October, 2012

Excerpted from Remarks at the Commonfund Forum 2012

The United States today faces many daunting challenges. But none should take higher priority than that of doing right by our children. In fact, leaving this country a better place for future generations is a good way to think about solving a whole set of government financial challenges. Unfortunately, in many cases, we are currently falling short.

•    We are not doing right by our children if we pass them entitlement programs for our retirements that they are unable to afford.
•    We are not doing right by our children if the budget deficit is out of control, even after the economy recovers.
•    We are not doing right by our children if we allow the infrastructure that they will inherit to decay.
•    And we are not doing right by our children if we allow maintenance to be deferred, pension liabilities to be accrued and the deficit to be repressed with countless accounting tricks that shortchange the future.

Yes, we have big challenges. But we have always had big challenges, and we have always overcome them. I believe we will again and ensure that our children inherit a better America. What are the large challenges ahead for the United States? Focusing on the broad economic realm, I would highlight the following:

Completing the economic recovery

In the six months from fall 2008 to spring 2009, every economic indicator—employment, industrial production, the stock market, global trade—collapsed faster than it did in the six months after fall 1929. We were successful in containing that. We have had nothing like the Great Depression of the 1930s, but we remain with an economy constrained by too little demand, in which consumers and businesses still have too little confidence, and in which we must put measures that assure durable spending to put people back to work, and to again engage a virtuous circle of “more spending means more income means more jobs.”

How best to do that can be debated. There is a role for tax policy, a role for regulatory policy, and certainly a role for infrastructure investment. Question: How many of us are proud of Kennedy Airport as the gateway to the greatest city in the greatest nation on this planet? At a moment when the federal government can borrow money for 30 years at below 3 percent interest rates, at a moment when construction unemployment is close to 20 percent, if this is not the moment to do something about Kennedy Airport and the smaller Kennedy Airports and schools and buildings across this country, I don’t know when that moment will come.

Taming the budget deficit

The second great priority, and one that is always challenging for the political process, is to do right by our children with respect to the way we borrow and invest. We are going to have a rendezvous with destiny within the next several months, because at the end of this year three things are occurring:

•    All the tax cuts put in place by the Bush administration are scheduled to expire.
•    The country’s debt limit will be reached again.
•    The congressional sequester, which will kick in if nothing is done, involves dangerous and irresponsible cuts in military spending.

I believe those three things will combine to drive action. The projected paths of spending and taxing are out of balance, and that has to get fixed. There simply isn’t an alternative.

Austerity alone is not the answer. Here is a simple way of summarizing the current federal budget problem. The U.S. Congressional Budget Office’s current projection for civilian government spending, exclusive of entitlement programs (Social Security, Medicare, Medicaid), is smaller as a share of income than at any time since the 1950s.

Similarly, the current projection for the military budget is about 40 percent as a share of GDP of what we were spending in the 1950s and early 1960s. And interest is going to be whatever it’s going to be, based on our debt. There is not a lot of room for any of those numbers to be cut.

We must get the economy growing or we will not solve the deficit problem. An extra percent of growth per year over the next decade, for example, would be more beneficial than any of the austerity cuts discussed in Bowles-Simpson or in congressional debates on the debt limit. Countries that run into credit crises do so because they stagnate. That is why we must first get and keep this economy growing more rapidly. If we do not, there is not enough austerity in the world to make the budget arithmetic work. Basically, then, to get our finances to be sustainable, we need some combination of the following two things:

•    To do it all on the spending side, you must cut entitlements—Social Security, Medicare and Medicaid—by a quarter over the next 10 years, below what they otherwise would have been.
•    To do it all on the revenue side, you must raise tax revenues by a quarter relative to what they would have been.

Most people would agree that Social Security and Medicare aren’t coming down by 25 per¬cent. And most people would agree that taxes aren’t going up by such a substantial amount. The conclusion, then, is that we need to effect some balanced package that will involve both of those things.

Doing so will require bipartisan compromise and tough choices. I believe that’s possible. I’m encouraged that Democrats are much more aware than they were five years ago that Medicare is out of control and that some adjustments will need to be made in Social Security. I’m equally encouraged that many Republicans have embraced the idea that closing a tax expenditure—a deduction or credit or exemption from income—is not raising taxes but, rather, is reducing a kind of expenditure.

Achieving fairer distribution of rewards

A third great challenge involves the broad structural changes that are happening in our economy and what they mean for the distribution of rewards. What information technology is bringing is very good for some of us, but it is not very good, at least in the short run, for many Americans. It is fantastic for us as consumers. Think of the iPod and the iPad and much else.

But as producers, increasingly, the skills of the most able are being complemented better than they have before. More information technology, more access to the Chinese market, more access to low-wage labor to implement an idea. For those whose traditional work is more routine, the jobs are going away.

One example is the publishing and book industry over the last 25 years. First there were wholesalers and distributors and bookstores—Waldenbooks, Barnes & Noble, Borders. Then there was Amazon distributing books, and the bookstores went away. Today, the books themselves are going away; Amazon sells more eBooks than physical books. At each stage of this process, there has been more to read at lower cost (again, great for Americans as consumers), but there has been less work for people to do (again, not so great for Americans as producers).

Think about this: In 1965, one in 20 men in the U.S. between the ages of 25 and 54 was not working. Today, one in five men between the ages of 25 and 54 is not working. And even when the economy has fully recovered, it will still be only one in six. How are we going to grapple with the consequences of this trend? That question isn’t just about bringing people in Washington together but about figuring out the right answer. It’s one of the most difficult public policy questions we face over the next generation—that is, our children’s generation.

Making budget reform a priority

For whomever is sitting in the Oval Office on January 20, 2013, the first order of business must be budget reform. It should encompass comprehensive tax reform that vastly broadens the base and achieves some rate reduction, while at the same time collecting more revenue than we do now. We need a compromise on Social Security that margin¬ally slows the growth of benefits but provides continued increases in benefits for all future generations and returns the program’s revenue base to what it has normally been.

We must also address healthcare reform in a way that emphasizes cost containment. Some of that is a matter of bidding better and paying better for services. Some of it means going after things like malpractice that egregiously add to cost. And some is a matter of making smart investments that come close to paying for themselves via prevention and the like.

Combined, these measures—tax reform, Social Security reform, healthcare reform—offer the prospect of a sustainably financed federal budget, which will be a boon to confidence and constructive for the economy. This kind of budget reform will be the main agenda for the first post-election year of the Obama or Romney administration. And I’m optimistic that something in that direction will happen.

Overcoming political polarization

Much of America’s power and leadership in the world has depended on the power of our example. Showing that we are able to confidently keep doing things, working together and solving problems are crucial not just to our own interests but to the future of the world. Recently, however, American leadership has come into doubt because of increasing political polarization, not only in Washington but across the heartland.

For all the talk about the disabilities of gridlock, however, consider this: Over the past 40 years, there has never been more consequential legislation passed than in 2009 and 2010. You can debate how good that legislation is. But no one can debate the quantity of consequential legislation passed in our “gridlocked” system recently.

So we can do things. We will need whoever is elected president in November to go back to doing major things. But we will also need to recognize and change the character of our political dialogue. When we disagree, we must do so with the recognition that it is through productive disagreement, and ultimately compromise, that America has always moved forward, can move forward again and, indeed, must move forward. That means taking down the tone of partisanship, the pervasiveness of money and some of the sheer meanness that has entered too much of our politics. My expectation is that whoever is president this January will summon legislators and thought leaders in a spirit of optimism.

Why it all can be done

Why can the above goals be achieved? In a word, history. Ask why the world has now gone for nearly 70 years without a war between major powers, without a major trade war, with more rapid growth than at any time in global history. Much of that can be attributed to American leadership, the power of American example and the role that America plays in the world. That is something that is in too much doubt today. In my opinion, that doubt is unwarranted.

Yes, we face a variety of difficulties and challenges. But speaking for myself, I would rather be playing the hand that history has dealt the United States in 2012 than the hand that history has dealt the leaders of any other major country in the world. That is something that we should all be very grateful for. But we must recognize that with that gratitude comes an obligation: to do right by our children… and our children’s children.

February 2, 2011
Teach for America 20th Anniversary Summit

I am really grateful for the invitation to rejoin the Teach for America Board.  I felt as a Board member before, that I was part of one of the most important things going on in our country, and that I was supporting the work of one of our country’s great entrepreneurs in Wendy Kopp.  I am delighted to have the opportunity  to rejoin the Teach for America Board.  So I appreciate that very much.

What I thought that I would do this morning was talk for a few minutes about what I think are some of the really dramatic things happening in today’s world, and then relate them to the education reform movement.  And then relate them to what I think Teach for America is doing, and why I think its work is so important.

Start with this – from the time of Pericles until 1800 in London, 2300 years, standards of living on planet Earth increased by 50%, perhaps possibly 100%.¹ At the time of the most rapid growth in our country’s history, around the turn of this 20th century, standards of living rose at a rate where they doubled in a single human lifetime,² then about 45 years.³

Today in places where 40% of humanity lives, in China and India,⁴  standards of living double every eight or nine years.  That is a profound acceleration in the pace of change.  It is a demonstration  of the power of knowledge, of science, and markets, when they all work together.

Here’s another sign of our age:  if you look at the cover of this week’s Economist, it shows you a Stradivarius that was printed.  That is to say, that in the same way that you don’t  think about content,  but whatever the content is, a printing press can print any prose that there is, we are reaching the point where anything you can conceive and design can be printed in three dimensions, can be manufactured automatically.

In the United States the number of people who are engaged in actual production work in manufacturing  as a share of the population is now comparable to the number of people who are engaged  in farming a generation ago.⁶   Just as we traversed from an agricultural economy to an industrial economy,  we are traversing from an industrial economy to a knowledge economy.

That all carries with it potential on a staggering scale.  But at the same time that this is true, it is also true that in our nation the most powerful nation in the world, the nation to which others come, the nation that in so many ways is an example to others. Here are some other things that are true. The fraction of Americans who believe that their children will not live as good lives as they did is at a record high, and is now a majority of the population.⁷

The confidence that the American people have in their institutions is at an epic low.⁸   Whether it is big business, whether it is big universities, whether it is big school systems, and certainly whether it is big government, confidence in our institutions has fallen steadily.  More people right now believe in witchcraft than believe in Congress.⁹

And that is a commentary about our country’s capacity to manage and to traverse this changing world-  a world of unbelievable opportunity, but also a world in which our country’s role is so essential and confidence in its future is so essential.

What is at the very center of it? I would suggest that at the center of it is education. In a much more elitist age, the Duke of Wellington observed that the Battle of Waterloo had been won on the playing fields of Eton.¹⁰ I  would suggest to you that today the battle for America’s future will be won or will be lost in America’s public schools.

Why do I say that?  First I say it because of what the quality of education means for our prosperity, which in turn determines our ability to do everything  else.  If we could close the education  gaps in our country between poor and rich, black and white and so forth, we would add half a trillion dollars, $8,000 for the average family, to our annual gross domestic product.¹¹

If we could bring all teaching up to the average quality of teaching now, estimates are that the present value of that is measured in the tens, if not the hundreds of trillions of dollars for our country.¹²  So in a world where what you can lift no longer has anything to do with how much you can earn, but what you know, what you can create, is at the center of earning power, education is at the center of our prosperity.

Education is also at the center of the legitimacy of our society.  There are all kinds of things you can worry about in terms of disturbing trends in our country.  Here’s the thing that actually worries me most.  In the 225 year history of the United States, the thing about the United States that Americans always tell themselves  is that we’re a land of equal opportunity,  that in Jefferson’s phrase we are an aristocracy of talent not of birth – that we are becoming a place with more and more equal opportunity.

And yet if you look over the last generation, for the first time in American history, the correlation  between the success of the mothers and daughters,  between the success of the fathers and sons has gone up.¹³ The differences in educational attainment and the chance to go college, between those in the top – children of those in the top quartile of the income distribution and those in the bottom quartile of the income distribution has gone up significantly over the last generation.¹⁴ That’s why the efforts in universities and colleges to promote and increase financial aid and recruitment are so important.

But the center of equal opportunity is equal education.  And as long as it is true, as Joel Klein said this morning, that the least advantaged kids receive the lowest quality education, we are going to become a more and more unequal and less and less legitimate society.  And so education is at the center of reclaiming the American dream.

But I would suggest to you that beyond what is concrete, what you can measure in terms of our capacity to create prosperity, in terms of the capacity of people to get jobs, beyond what it means for opportunity, that education is what will determine whether everyone is able to be a full member of a society in which we can be proud – we have to worry at a time when more than half of Americans do not believe in the theory of evolution.¹⁵ At a time when you can graduate, as some of the Teach for America materials here illustrate, you can very easily graduate from an American high school and not know how long it takes the earth to go around the sun.  At a time when part of what gives Twitter its appeal is that there are some people who can’t, or won’t, read anything that is more than 140 characters long. We were the society that produced all at once Washington, and Jefferson, and Franklin, and Adams, and Madison – and whether we’re the society that’s going to continue to be able to do things like that is going to depend on the quality of the education that we provide.

There are many things that are important for the economic development of our country – our infrastructure, our health care, our research and development.  But you know what?  If you track every one of them back they go back to the quality of the education that we are providing to our young people. Indeed, I would suggest to you that if and when every American child receives a quality education where they are ready for the opportunities of the 21st century, and where they are appreciated as strong and viable members of the community in which they live, when that day comes it is hard to imagine how we could fail, whatever else was going wrong.

And I would equally suggest to you that if it continues to be the case that nearly half our students do not graduate from high school,¹⁶ and that many of those who do graduate from high school, are not ready for the cognitive demands of a knowledge economy – if that situation stays as it is today, I would suggest to you that it is hard to imagine how we will succeed as a country, whatever arms we build, whatever foreign policies we follow, whatever R&D or infrastructure or anything else we invest in. If we do not get education right, it is hard to see how we will succeed as a country in the most competitive century there has ever been. And that is why the battle for America’s future hangs in the balance in what happens in our schools.

Now we have learned something else.  And it is something  that has gone with the changes that I have talked about, the changes towards globalization, the changes towards becoming a knowledge economy.  The fact that in a real sense if you look at some of the most successful nations, like China, and you look at some of the companies that have been most successful, there are similarities in what has happened.  There is much less command and control.  There is much less hierarchy. There is much less that comes from the top down.  And there is much more that comes from the bottom up.

There are many ways of talking about what the genius of capitalism is and why capitalism and markets have worked as a system.  Here’s what I think is actually most important.  Capitalism and markets force producers to do what consumers want rather than what they want.  You don’t  stay in the car business if you don’t produce the kinds of car people want to drive.  You don’t  stay producing clothing if you don’t respond with the fashions that people want to wear.  And I could go on and on with examples like that.

And if there’s one thing that the public sector has to understand, it is that it needs mechanisms that give not what producers want for their convenience. That causes provision not to take place for the convenience of the beneficiaries – in the case of education, for our children – but for those who are the providers.

And at the root, an education system that is for the benefit of the children, rather than for the benefit of those providing the services, is what education  reform is all about.  Now there are people here who know about every aspect of it, who know about the teacher recruitment side, who know about charter schools, who know about the proper allocation of resources towards those ends, who know about the establishment of incentive systems.   But I am here to tell you that the single most important part of that is drawing talent with attitude into the system.  And in that Teach for America has succeeded on a scale that could not have been imagined 20 years ago.

Just think about two things that I knew were true when I was on the Board two years ago, and they, I suspect, are still true today.  And perhaps you’ll  forgive me if I use Harvard as an example.  There are two things you might try to do if you were an employer.  You might try to be a large-scale employer who a large number of people wanted to come to.  You might also try to be an elite employer who when you tried to recruit somebody they always said yes, and they said no to the other people.

And if you think about it, it is actually rather hard to do both.  And it is a staggering achievement, if you think about it – if you think about how any of us would have thought 20 years ago, it is a staggering achievement and an implausible, if I might, achievement that an organization that asks people to come teach in schools for a salary that in many cases is closer to zero than it is to $100,000, has managed to be the employer that (A), is most sought after at institutions across this country, and (B), two years ago it was the case that there was only one employer who, if you were a Harvard undergraduate, and you had an offer from Goldman Sachs and you had an offer from this employer, more than half the time you chose this employer.¹⁷ And that employer was Teach for America.

And so if you think about this task of winning the battle for America’s future through change and education, and you think about the fact that you are now bringing 4,000 extraordinary young people with the world’s  best opportunities open to them, into that fight, and you are keeping the vast majority of them in the arena. That you are doing it in ways that are not dependent on anything that comes down from above, but on the results that you provide for the students. That is a remarkable achievement.   It starts with the 500,000 children who will be better taught this year than they would have been if they weren’t  taught by part of Teach for America.  But that is only the very beginning of the influence that is had.  So I look forward to sitting here 30 years from now at the 50th anniversary of this event.  I look forward to the moment where there will be several hundred thousand Americans who will be part – who will have been part of the Teach for America corps.  I look forward to the moment when there will be tens of millions of Americans whose lives were touched by being in the classroom of a TFA corps member.

I look forward to the moment when it will not be surprising, but will be a kind of normal expectation that students after they leave college will for some interval, give something back to their community and their nation and be changed by the experience.  I look forward to the moment when this impact will not just be felt in the United States, but as is increasingly the case, will be felt around the world.

I look forward to the moment when we will be celebrating the fact that our elite institutions, whether it is our leading universities, or our leading companies, or our leading hospitals, will be staffed by people who are as likely to come from families with good fortune as families with less fortune.

I look forward to the moment when the American dream of equal opportunity will have been redeemed.  And I look forward to the moment when we will no longer need to be measuring gaps between different groups, because those gaps will have been substantially closed, and we will be able to focus on every individual as an individual letting them maximize their potential.

That’s what I think we will have a chance to celebrate a generation from now when we win the battle for America’s future.  And we’re able to thank Teach for America in the extraordinary  contribution it makes towards that end.

Thank you very much.

1 John Maynard Keynes, Essays in Persuasion, New York: W.W.Norton & Co., (1963).

2 Richard H. Steckel, “A History ofthe Standard  of Living in the United States,” available at http://eh.net/encyclopedialarticle/steckel.standard.living.us.

3 Laura B. Shreshta,  Life Expectancy in the United States, CRS RL32792, August 16, 2006.

4 Central I ntelligence Agency, “Country  Comparison: Population,” The World Factbook, available at https://www.cia.gov/library/pubHcations/the-world­ factbook/rankorder/2119rank.html?countryName=China&countryCode=ch&regionCode=eas&ra nk=I#ch.

5 Nin-Hai Tseng, “China  is richer, but most Chinese are still poor,” CNNMoney.com, February 17, 2011; Central Intelligence Agency, The World Factbook, available at https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html.

6 Bureau of Labor Statistics, “Occupational Employment  and Wages,” May 14, 20 I 0; United States Department of Agriculture, “The 20th Century Transformation of U.S. Agriculture and Farm Policy,” June 2005, available at  http://www.ers.usda.gov/publications/eib3/eib3.htrn.

7 FOXNews.com, “57% Think  Next Generation Will Be Worse Off”:  April 9, 2010, available at http://www.foxnews.com/poIitics/2010/04/09/fox-news-po11-think-generation-worse/.

8 Gallup, “Congress Ranks Last in Confidence in Institutions,” July 22, 2010, available at http://www.gallup.com/poiV141512/congress-ranks-last-confidence-institutions.aspx.

9 /d.; David A. Graham, “America the Ignorant: Silly Things We Believe About Witches, Obama, and More,” Newsweek, August 24, 2010, available at http://www.newsweek.com/photo/2010/08/24/dumb-things-americans-believe.htrnl.

10 Charles Batchelor, “Character Building:Teamwork Helps Prepare for the University of Life,” FT.com,September 14, 2009, available at http://www.ft.com/cms/s/0/942e6e6e-9dal-llde-9f4a­OO144feabdcO.html#axzz1 FhGUz848.

11McKinsey & Company, “The Economic Impact of the Achievement Gap in America’s Schools,” April 2009, available at http://www.mckinsey.com/clientservice/Social_Sector/our_practices/Education/Knowledge_High lights/Economic_impact.aspx.

12 Danny King, “The Impact of Better Teachers: $I 00 billion more in U.S. GOP,” DailyFinance, February 9, 20 II, available at http://www.dailyfinance.com/story/better-teachers-could-add-I OO­ trillion-to-us-economy/I9834126/.

13 Catherine  Rampell, “SAT Scores and Family Income,” New York Times, August 27, 2009, available at http:l/economix.blogs.nytimes.com/2009/08/27/sat-scores-and-family-income/.

14 Cecilia Elena Rouse and Lisa Barrow, “U.S. Elementary and Secondary Schools: Equalizing Opportunity or Replicating the Status Quo?,” The Future of Children, 2006, available at http://futureofchildren.org/futureofchildren/publications/journals/article/index.xml?joumalid-35&articleid=89&sectionid=541.

15 Gallup, “On Darwin’s  Birthday, Only 4 in 10 Believe in Evolution,” February 11,2009, available at.http://www.gallup.com/poll/114544/darwin-birthday-believe-evolution.aspx.

16 Sam Dillon, “Large Urban-Suburban Gap in Graduation Rates,” New York Times, April 22, 2009.

17 “Teach for (Some of) America,”Wall Street Journal, April 25, 2009.