Masters in Business | Heather Boushey on Rebounding From Covid & Biden's Economic Policies

Host: Barry Ritholtz (Bloomberg)
Guest: Heather Boushey, Senior Research Fellow, Harvard Kennedy School
Date: September 12, 2025

Episode Overview

In this episode, Barry Ritholtz interviews economist Heather Boushey, delving into her career, formative experiences, and her pivotal role in shaping and communicating US economic policy, particularly during the COVID-19 pandemic and the early years of the Biden administration. The discussion spans the effectiveness of Covid response, lessons learned about economic fragility, the challenge of partisanship, the roots and impact of inequality, and the intersection of policy, growth, and social trust.

Heather Boushey’s Background and Formative Experiences

[02:40–04:10]

• Roots in Economic Uncertainty: Heather grew up in a Boeing-centric community in Mukilteo, Washington, where mass layoffs during the Volcker recession exposed her to the overwhelming role big business played in economic security.

  "Every kid at my bus stop had one or two parents that were pink slipped, they'd been laid off. ... I was really just struck by how much power this company had over my life." - Heather Boushey [03:08]

• Education and Career Aspirations: Degrees in economics from Hampshire College (BA) and The New School (PhD), inspired by an early desire to understand—and ultimately improve—economic opportunity and security for the American middle class.

• Career Focus: Started and led think tanks, advised Congressional committees, and served on the Biden Council of Economic Advisors, always returning to the puzzle of “what creates opportunity for economic security for America's middle class?”

The Increasing Partisanship in Washington

[04:53–06:24]

• Noted a decline in bipartisan respect and civility towards expert testimony in Congress over recent decades.

  "People on both sides of the aisle would generally be respectful... I've seen that over my career... partisanship has really drilled down into how we treat experts." - Heather Boushey [05:15]

Shaping Covid Policy: Inside the Biden Economic Team

[06:36–08:53]

• Immediate Priorities: Upon joining Biden’s team (March 2020), the focus was distribution of vaccines, reopening schools, and managing economic recovery.

• ‘Build Back Better’ Vision: The administration sought not just to recover but to reimagine and strengthen the foundations of the US economy, with an emphasis on the middle class.

  "...help people understand how all the pieces of that agenda fit together... a lot of what the Council of Economic Advisors does is help people understand the data." - Heather Boushey [08:07]

Grading America’s Covid Response

[08:53–12:32]

• Initial Successes: Swift vaccine distribution (“shots in arms”), efficient deployment through sites like the Javits Center in NY, and passage of the American Rescue Plan, which provided a safety net for families, businesses, schools, and communities.

  "Those first few months were so courageous and incredible... to get those shots in arms, to get schools reopened..." - Heather Boushey [09:43]

• Resilience and Fragility: The pandemic exposed the brittleness of global supply chains and the importance of government competence in crisis.

  "...our first couple years in the White House were all about, oh, there's another thing that doesn't work anymore..." - Heather Boushey [11:54]

• Small Businesses & Care Infrastructure: Critical funding went to child care centers and long-term care facilities, enabling broader workforce recovery.

  "We saved so many small businesses... childcare centers, long term care facilities... that meant other people could then get back to work." [13:27]

Tradeoffs and Communication Challenges During and After Covid

[15:18–19:25]

• Inflation vs. Unemployment: Administration faced a ‘Sophie's Choice’—either accept high inflation or persistent unemployment. Chose the former as the lesser evil.

• Missed Opportunities: Insufficient explanation of how fragile supply chains—not just fiscal stimulus—drove American price spikes.

  "I don't think we did a good enough job helping people understand all the things that the pandemic had uncovered." [16:28]

• Systemic Issues: The pandemic was a mirror—many preferred to ‘paper over' deep-seated economic vulnerabilities instead of confronting them.

The Trust Gap, Vaccines, and School Closures

[19:25–23:16]

• Low Trust Environment: Declining public trust in institutions and experts undermined pandemic response, fueling vaccine hesitancy and polarization over school closures.

  "Already America had become a lower trust environment... Less trust in government than they had, you know, decades before. Less trust in business, less trust in experts." [20:36]

• Rethinking Communication: Wished for more coverage of these trust issues before the crisis; policy effectiveness is limited when the public lacks faith in messengers and institutions.

America’s Covid Response Versus International Peers

[23:16–26:27]

• Mixed Health Outcomes, Strong Economic Results: Early high death rates, but eventually led among advanced economies in economic recovery, price stabilization, and employment.

  "The United States had one of the strongest economic recoveries... Even The Economist has said, you know, we really knocked it out of the park..." [23:30]

• Preexisting Weaknesses: Higher US rates of preexisting conditions (e.g., diabetes, obesity) contributed to worse pandemic health outcomes.

Wealth & Income Inequality: Roots, Impacts, and Policy Choices

[29:09–39:15]

• How Inequality Constrains Growth: Drawing on her book and Nobel-winning research by Acemoglu, Johnson, and Robinson, Boushey argues that economic inequality undermines institutions crucial to shared prosperity (like public education).

  "What economic inequality does... is it destroys the institutions that foster broadly shared growth." [30:46]

• Intergenerational Mobility and Unequal Opportunity: Cites research showing high-achieving but lower-income (or nonwhite, or female) children are less likely than their affluent, white, male peers to obtain patents—reflecting squandered national potential due to inequity.

• Structural Funding Flaws: The reliance on local property taxes for school funding bakes inequality into the public education system.

  "Public schools are primarily financed by local property taxes, which is inherently unequal..." [35:23]

• Role of Tax Policy: Half a century of tax cuts benefiting the wealthy and shrinking public resources has deepened inequality without delivering promised trickle-down benefits.

  "...massive tax packages, the most egregious, of course, being the one that passed this year that Donald Trump signed." [38:07]

Policy, Partisanship, and Voting in the Era of Inequality

[39:15–43:07]

• Surprising Downstream Effects: Recent tax cuts and social program cuts are devastating red states—especially via widespread rural hospital closures—yet often voters continue aligning along tribal or cultural, not economic, lines.

  "But his actions really haven't been. And I think that's what's so... frustrating to watch." - on Trump’s support among those hurt by his policies [41:48]

• Messaging and Accountability: The challenge is to connect policy outcomes directly to the lived experience and communicate who is "on your side."

Fiscal vs. Monetary Policy and Its Distributional Impacts

[43:07–47:37]

• Shift Since 2020: The 2010s were defined by passive, monetary policy (QE, low rates) while the 2020s have been much more active, driven by massive fiscal spending.

• Unchanged Winners?: Regardless of policy stance, asset holders have continued to profit (“if you own capital based assets, any sort of stimulus seems to work.” [44:18]), raising questions on whether policy changes have truly addressed inequality.

• Active Policy for Active Problems: Advocates for using fiscal policy to invest in infrastructure and emerging industries, rather than relying on “hands off” markets.

Unintended Consequences, Corporate Compensation, and Wealth Calcification

[50:04–55:26]

• Well-Intentioned Policy and Loopholes: 1990s reforms to CEO pay led to ballooning stock/option compensation, thus inadvertently exacerbating wealth inequality.

  "Always vigilant. ... It starts with taxation, right? So what we have done over decades is lower tax rates at the top." [51:42]

• Tax Policy Limits: US estate and corporate tax frameworks are more permissive than those in most peer countries, facilitating both intergenerational wealth concentration and persistent inequality.

• Declining Mobility: The historic promise of American mobility has faded—now, only about half of people born in the 1980s outearn their parents, compared to ~90% in the 1940s.

The Challenge of Global Supply Chains and Economic Fragility

[55:26–61:48]

• Globalization’s Trade-off: Innovations in technology, trade agreements, and corporate strategy led US firms to offshore production, leaving the country vulnerable in crises (e.g. medical supplies during Covid, drones for Ukraine).

  "We did that at a time when we were making those rules easier. ...We believe that would make it safer... And yet what we've seen is that... it's really stripped production from the ideas and the innovation..." [56:01]

• Policy Tools for Resilience: Government can boost resilience with targeted industrial, antitrust, trade, and procurement policies—even if that adds short-term costs, the long-term payoff is in stability during crises.

Gender, Work, and the Real Story of “She-cessions”

[61:48–63:52]

• Myth-Busting: Media narratives often blame women dropping out of the workforce on “preferences,” ignoring systemic barriers (lack of child care, job structure). In reality, recessions and inadequate support, not voluntary exits, explain women's labor force fluctuations.

  "This comes up time and again... when you look at the data, you see that actually it tends to be more about demand side issues..." [62:16]

• Policy Setbacks: Failure to invest in care infrastructure post-pandemic is hurting families and suppressing women’s workforce participation.

Notable Quotes

• On pandemic response and trust:
  "We were in a moment where already America had become a lower trust environment. ... that has further eroded the trust that people have in the institutions around them, even as we know that it saved millions of lives..." - Heather Boushey [20:36]

• On economic mobility:
  "If you're born in the 1980s, only one in two of us has grown up to outearn their parents. ... a remarkable constraint on upward mobility over time." - Heather Boushey [54:39]

• On rural hospital closures and the effect of policy:
  "There are going to be people that are going to have to drive three, four or five hours if to have a baby delivered. And if there's a heart attack, ... you ain't going to make that." - Barry Ritholtz [40:13]

• On supply chains and national security:
  "That was a technology problem that very quickly became a very important national security issue. And are we... getting ahead of those kinds of questions?" - Heather Boushey [58:44]

Key Timestamps

• 02:40 – Boushey’s economic awakening
• 06:36 – Entering the Biden economic team during COVID
• 09:43 – Grading the early pandemic response
• 15:18 – The trade-off: inflation vs. unemployment
• 16:28 – Communication gaps about inflation and fragility
• 20:36 – The collapse of trust and its policy implications
• 23:30 – How America’s pandemic response compared internationally
• 29:48 – How inequality constricts economic growth
• 35:23 – Why US public school funding is structurally unequal
• 38:07 – Recent tax cuts and their effects on social programs
• 43:07 – The shift from monetary to fiscal stimulus (and who benefits)
• 50:04 – CEO comp and policy backfire
• 55:26 – Supply chains, globalization, and resilience
• 61:48 – The truth about women’s labor force participation
• 62:16 – Care crisis and the pandemic’s gendered impact

Tone & Final Thoughts

The episode is marked by clear-eyed analysis, deep concern for equitable economic opportunity, and a willingness to confront both policy successes and failures. Boushey weaves personal narrative with economic data, often returning to broad social impact, trust in institutions, and the need for more purposeful, resilient policy-making. Ritholtz provides a collaborative, inquisitive counterpoint, pushing on issues of causality, unintended consequences, and the limits of policy.

Listen to the full episode for a rich discussion on how the US has weathered and responded to historic economic shocks, and the continuing quest for a more equitable, resilient economy.