SCOTT SIMON, HOST:
The prospects of massive, new government spending and mounting deficits seemed to agitate the stock market this week. But wages are up. Unemployment is down. And tax cuts will mean more money in some pockets. Jason Furman was chairman of the Council of Economic Advisers in the Obama administration. He's now professor of the practice of economic policy at Harvard's Kennedy School and joins us now. Thanks very much for being with us, professor.
JASON FURMAN: Thanks for having me.
SIMON: Is this stock market down because wages reportedly are up?
FURMAN: I think that is part of the story. Last week, the Bureau of Labor Statistics reported that for private sector workers, wages were up 2.9 percent for the year. The market appeared to have taken that quite seriously. I'm a little bit less certain because they reported some other wage data that showed slower growth than that. But looking at the totality of recent releases, it does seem that wage growth probably has firmed somewhat - maybe not as much as that headline indicator would lead one to think.
SIMON: The majority of Americans don't own stock, even when you add in 401(k)s. So how concerned should Americans be with the stock market and the volatility we've seen?
FURMAN: I - the thing most Americans should care the most about is how the actual economy is going. What is the unemployment rate? What is the rate of wage growth? What is overall income growth like? The stock market, as you said, doesn't matter directly for an awful lot of households. And you could have weird things happen. Something that President Trump actually complained about was correct. You can get good news in the economy. And because of that, people get nervous that interest rates are going to go up, and the stock market goes down. So I think it's much more important to look at what's actually happening for people in the economy than markets because they do crazy things all the time for all sorts of reasons.
SIMON: And yet we report them every day every hour.
FURMAN: I've always thought that was a bit of a problem. The statistic that I care about most in the economy - the two statistics - are median household income and the poverty rate. And we report those once a year because we only get them once a year. We get the S&P every minute of every day, and we hear it all the time. And I think that leads people to focus a little bit too much on these gyrations in the market minute to minute and a little bit too little on the underlying trend for incomes in the economy.
SIMON: As the former chairman of the Council of Economic Advisers under President Obama, how do you see the responsibility of the administration in times like this when we're so sensitive to what's happening on Wall Street?
FURMAN: I think the administration should be focused on job growth, wage growth. And in particular, we have much less of a short-term problem now because we have a 4.1 percent unemployment rate. So I think the administration should be more focused on making sure that that growth is sustainable for the medium and long run, for example, without skyrocketing deficits and also making sure that we're increasing our productivity growth by, for example, making investments in infrastructure, education and the other things you need to undergird stronger growth over time.
SIMON: Does there need to be massive federal government investment in infrastructure at a time when the unemployment rate is so low?
FURMAN: Having more roads, having more ports, having a better train system will mean, over the next five, 10, 20 years, our economic growth can be stronger. We don't need to increase the deficit to get that, though. We could, for example, do what the trucking association and the Chamber of Commerce would like us to do, which is to have a higher gas tax to pay for more investments in our roads. That would make us richer over time.
SIMON: Jason Furman, who is former chairman of the Council of Economic Advisers in the Obama administration, thanks so much for being with us.
FURMAN: Thanks for having me. Transcript provided by NPR, Copyright NPR.