Podcast Summary: Bloomberg Talks – Glenn Hubbard Talks AI, Fed Independence
Date: November 17, 2025
Host: Tom Keene and Paul (Bloomberg)
Guest: Glenn Hubbard (Columbia University, former Dean, Economic Commentator)
Episode Overview
This episode features a robust and insightful conversation with Glenn Hubbard, renowned economist, former Dean of Columbia Business School, and influential voice in U.S. macroeconomic policy. The discussion centers on two critical themes:
- The Federal Reserve’s current challenges, particularly its independence amid political pressures
- The sweeping impact of AI and automation on the U.S. labor market and productivity
Hubbard blends historical perspective, economic insight, and practical concerns, making this a timely episode for anyone interested in finance, policy, and the future of work.
Key Discussion Points & Insights
1. The Federal Reserve: Independence & Challenges
[00:34 – 02:33]
- Fed Chair Speculation:
- Tom Keene expresses regret that Hubbard isn’t considered for Fed Chair, humorously remarking, "I'm absolutely thunderstruck and crushed that you're not on the short list to be chairman of the Fed." (Tom Keene, 00:44)
- Hubbard responds with measured diplomacy:
"This is probably the most challenging time to run the Fed that I could ever imagine." (Glenn Hubbard, 01:16)
- Short-Term & Long-Term Challenges:
- Short-term: Balancing inflation and employment is extremely challenging; Hubbard cautions against rapid rate cuts.
"You have inflation that's too high, you have a job market weakening. I think the case for a lot of rate cuts is pretty weak...Many [employment worries] are structural. They're AI. They're changes that really are beyond the Fed's purview." (01:50)
- Long-term: Maintaining the Fed’s independence in an increasingly politicized environment is paramount, and Hubbard acknowledges the need for reform.
"While the Fed needs to be independent, it has made mistakes. ...the next chair will have to do some reforms." (02:23)
- Short-term: Balancing inflation and employment is extremely challenging; Hubbard cautions against rapid rate cuts.
2. Impact of AI on the Workforce and Market
[02:33 – 05:46]
- Substitution vs. Complementing Labor:
- AI’s effect is complex, with both job displacement and job creation occurring in parallel.
"AI can either substitute…for workers or it can complement worker skills... In the long run AI is going to displace many jobs but create many more jobs." (Glenn Hubbard, 02:50)
- AI’s effect is complex, with both job displacement and job creation occurring in parallel.
- Market Valuations & Productivity Parallels to Past Disruptions:
- Comparing AI’s impact to the telecom boom of the 1990s, Hubbard notes that first-movers may not see profits but overall productivity could soar.
"Just like we learned in the telco boom in the 90s, a lot of the first movers lose money but ultimately it raises productivity." (02:50)
- Comparing AI’s impact to the telecom boom of the 1990s, Hubbard notes that first-movers may not see profits but overall productivity could soar.
- Productivity Gains: Timeline and Uncertainty:
- On the current “blindness” about productivity in 2025, Hubbard urges patience, referencing technology waves like electricity and the internet.
"It takes time for businesses, for individuals...it may be within five years but we shouldn't be expecting it overnight." (03:55)
- On the current “blindness” about productivity in 2025, Hubbard urges patience, referencing technology waves like electricity and the internet.
- Lessons from Globalization:
- Drawing a direct comparison to past failures in retraining displaced workers (e.g., textile jobs in the Carolinas during globalization), Hubbard warns that AI’s quicker pace could leave even more people vulnerable.
"Technological change is actually number one. Then globalization. We didn't retrain people, we were too slow moving. AI is going to happen faster. I do worry about it." (Glenn Hubbard, 04:53)
- Drawing a direct comparison to past failures in retraining displaced workers (e.g., textile jobs in the Carolinas during globalization), Hubbard warns that AI’s quicker pace could leave even more people vulnerable.
3. Political Economy & the "Labor Bargain"
[04:22 – 05:46]
- Broken Promises and Social Impact:
- Tom Keene is sharply concerned about repeating mistakes:
"Are we going to do the same thing with AI where we go sort of a globalization and we break the labor bargain with all those people pushed out of jobs?" (04:22)
- Hubbard's response underscores his core worry:
"It is the political economy question of our time. ...I hope the administration will become more focused on how do you get [people retrained]." (04:53)
- Tom Keene is sharply concerned about repeating mistakes:
- Message to the Elites:
- Hubbard makes a plea for geographical and social inclusivity:
"There's smart people and innovative ideas everywhere. We need applied research centers everywhere. We need to help places left behind. And second, our politics depend on this. If we want to embrace AI and all it brings, we got to get this right." (05:46)
- Hubbard makes a plea for geographical and social inclusivity:
Notable Quotes & Memorable Moments
-
On Fed’s Dilemma:
“I think the case for a lot of rate cuts is pretty weak... Many [unemployment issues] are structural. They're AI. They're changes...beyond the Fed's purview.”
— Glenn Hubbard (01:50) -
On AI’s Potential:
"In the long run AI is going to displace many jobs but create many more jobs."
— Glenn Hubbard (02:50) -
On Historical Parallels:
"If you look at previous waves of what economists call general purpose technologies like electricity or mainframe computing or the Internet, they took a decade or more to really ripple through productivity."
— Glenn Hubbard (03:55) -
On Social Risks:
"It is the political economy question of our time. ... AI is going to happen faster. I do worry about it."
— Glenn Hubbard (04:53) -
On Equitable Innovation:
"There's smart people and innovative ideas everywhere. We need applied research centers everywhere. ...If we want to embrace AI and all it brings, we got to get this right."
— Glenn Hubbard (05:46)
Timestamps for Key Segments
- 00:34 – Episode intro, Tom Keene/tongue-in-cheek Fed Chair question
- 01:16 – Hubbard on challenges facing the Fed
- 01:50 – Rate cuts and structural labor shifts
- 02:50 – AI as substitute and complement; market impact
- 03:55 – Productivity: why it’s hard to measure AI’s effects now
- 04:22 – Labor bargain, lessons from globalization
- 04:53 – Political economy and urgency of retraining
- 05:46 – A message to elites about equitable innovation
Summary Takeaway
Glenn Hubbard delivers a nuanced, cautionary but hopeful assessment of economic policymaking at a moment of rapid change. He urges a careful approach to Fed policy while emphasizing the profound implications of AI on productivity and employment. The biggest risk, he warns, is repeating past mistakes—neglecting to retrain workers and support communities left behind during periods of innovation. Political and business leaders, he insists, must prioritize inclusive economic growth if America is to thrive in the AI revolution.