Glenn Hubbard Talks AI, Fed Independence

Summary

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)

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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.

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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)

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)

• 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)

• 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)

• 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)

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)

• 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)

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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)

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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

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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.

Transcript

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[Podcast/Radio Announcer]

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[Tom Keene]

Joining us now, and I've really been anticipating this is Glenn Hubbard out of Florida with just terrific academics and frankly, giving energy to Columbia University's business schools. Their dean for so long. He's doing different things now, but I'm not. I'm going to cut to the chaser. Paul's got lots of Fed questions. Glenn, I am absolutely thunderstruck and crushed that you're not on the short list to be chairman of the Fed. Have you ever talked to the Secretary of Treasury about your commitment to a more conservative economic ethos?

[Glenn Hubbard]

Well, thanks for having me, Tom. I think the president's got a good short list for the Fed. I look forward to the choice. This is probably the most challenging time to run the Fed that I could ever imagine.

[Tom Keene]

So that was diplomatic.

[Paul]

That was exactly.

[Tom Keene]

You learned to do that when you're dean of Columbia.

[Paul]

Exactly. Glenn, how do you view here, the Fed here? It's in a little bit of a position that has, doesn't necessarily find itself very often, which is, you know, really under some political pressure from the White House here. How do you view the Fed these days?

[Glenn Hubbard]

Well, I think there's a short run and a long run challenge. The short run challenge is the one in the news, which is what do you do about rates? 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 to the extent that there are worries about employment. Many of those are structural. They're AI. They're changes that really are beyond the Fed's purview. So I think the Fed's watchful waiting makes sense. Longer term, the challenge is how do you keep an independent Fed in the presence of political pressures? And I think while the Fed needs to be independent, it has made mistakes. You know, President Trump is not entirely incorrect. And so the next chair will have to do some reforms.

[Paul]

So you mentioned. I Glenn, it's certainly been a key, key narrative of this market over the last two to three years as companies step up their spending here. But what are the impacts, do you think, on the US labor force? There's a lot of, lot of consternation out there?

[Glenn Hubbard]

Well, I think it's too soon to tell. I mean basically I can either substitute on the one hand for workers or it can complement workers skills and we're seeing both of those in the labor market. It won't surprise you to know economists completely differ in what their views are on AI. I think in the long run AI is going to displace many jobs but create many more jobs. Where I think people may be surprised is on market valuations and who wins from AI. Just like we learned in the telco BOOM in the 90s, a lot of the first movers lose money but ultimately it raises productivity. We may well see.

[Tom Keene]

Let's go there. I mean, I mean. Glenn Hubbard with us folks. For the all of you worldwide on YouTube and all of our radio affiliates in America, thank you for joining this morning. Glenn, you're teaching at Columbia or frankly at your central Florida and you have to discuss productivity. We're blind right now to where productivity is in 2025. When will we have an understanding of this new productivity?

[Glenn Hubbard]

Well, it's a great question, Tom. And the honest answer is it takes time. So 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. And the reason is it takes time for businesses, for individuals. With that, I think it'll take less time this time. So it may be within five years but we shouldn't be expecting it overnight.

[Tom Keene]

Okay, but Paul and I've had this in many conversations, just brilliant work and thank you to Richard cleared for his support of the show. Glenn Hubbard, a long ago in globalization we broke a bargain with the, the clothing labor of the Carolinas. We said we're going to retrain you, we're going to do this. 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.

[Glenn Hubbard]

I'm super worried about this point. It is the political economy question of our time. If you look at the past three or four decades, 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. I hope the administration will become more focused on how do you get.

[Tom Keene]

I got one minute left. Glenn, let me cut to the chase. The elites are from the fancy schools up north. Granted you did so well in the south. You went to Harvard. There's like three zip codes out near Palo Alto. There's a northeastern zip code. You're one of the few people we have who viscerally gets the south. What's your message to the elites about not doing a redux that busted globalization years ago?

[Glenn Hubbard]

Well, two things. One, 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.

[Tom Keene]

Glenn Hubbard, thank you so much. Great. Should I get off my soapbox?

[Paul]

There you go.

[Tom Keene]

Glenn Hubbard thank you so much. Always and forever with Columbia University.

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