Columbia Dean May Be Tapped

Former adviser to Bush with Harvard Ph.D. in the running for top Fed post

Associated Press

Hubbard, third from left, joins President George W. Bush, Vice President Dick Cheney, far right, and two senior economic advisers, in the White House Rose Garden in Washington on October 5, 2001.

When R. Glenn Hubbard was growing up in central Florida, few people would have foreseen that he would become one of the nation’s leading economists.

The son of English teachers and the brother of a country-pop musician, Hubbard has defied the odds, serving as the chairman of Council of Economic Advisers (CEA) during the first two years of the Bush administration and holding the post of dean at Columbia’s Graduate School of Business since last year—all before his 50th birthday.

A high-flying college student at the University of Central Florida (UCF), Hubbard went on to Harvard, where he received a Ph.D. in economics. He has taught at several of the nation’s top schools and has worked in the Department of the Treasury and the White House.

“It looks like he was born and bred in Cambridge, but that’s absolutely not true,” remarks New York University Economics Department Chair Mark Gertler, a longtime friend and colleague. “He was born and bred in Florida, and his brother is a country music star.”

Hailed by economists as one of the most influential CEA chairmen in recent history, Hubbard is now among the leading candidates to replace Federal Reserve Chairman Alan Greenspan, who is set to retire on Jan. 31, 2006.

While Hubbard declined to be interviewed for this profile, his colleagues and friends say he would likely continue the Fed’s commitment to low inflation while bringing a leadership style marked by loyalty.

FOR THE RECORD

At the CEA, Hubbard became renowned for his academic orthodoxy, his advocacy of tax cuts, and his loyalty to the administration.

Hubbard promoted abolishing taxes on capital investment—effectively creating a tax system centering on consumption instead of on savings and investment.

He was the driving force behind Bush’s controversial $674 billion tax cut package designed to promote economic growth, which included an end to the double taxation of dividends that corporations pay their shareholders.

He also is an outspoken advocate of reduced federal spending, including substantially slowing the growth of Social Security and Medicare expenditures.

At the helm during the Sept. 11 terrorist attacks and the economic recession, Hubbard also gained a reputation for his loyalty to the president. When Bush dismissed his first Treasury secretary and his top economic adviser early in his first term, Hubbard was kept on board.

Hubbard praised the Federal Reserve’s recent performance—its “commitment to price stability” and it “remarkable job in cutting the inflation tax on investment”—in a column he wrote for Business Week in January.

“The Fed’s victory over inflation constitutes what is, in effect, the biggest tax cut for investment over the past two decades,” he wrote.

Hubbard also stressed the importance of communication to the Fed’s success.

“Explaining to the public the costs of even modest rates of inflation is a vital part of Fed communication,” he wrote.

“So, too, is anchoring inflation expectations with a description of the range the central bank finds acceptable.”

FROM SWEET HOME ORLANDO TO FAIR HARVARD

Hubbard was born on September 4, 1958, in Orlando, Fla. Raised in the nearby suburb of Apopka, he attended public school there and matriculated at UCF.

Kenneth R. White, who was one of Hubbard’s early professors in the UCF business college, lauds Hubbard as “the single best student the college produced in our 37 years of offering classes.”

One particular memory of Hubbard sticks out for White.

“I remember that a statistics professor told me that he had made a mistake in his lecture that he thought no student would be able to catch,” White wrote in an e-mail. “Glenn caught it and in a nice way informed the instructor of the error.”

Hubbard graduated summa cum laude with a degree in economics from UCF in 1979.

When Hubbard applied to the top economics graduate schools in the country, White and the rest of the faculty at the UCF business college knew he would be up to the challenge.

“When undergraduate students talk about going to MIT or Harvard, we tend to think that these students are over-reaching their goals,” White says. “Not so with Glenn—Harvard and MIT were in a very heated competition to receive Glenn as a graduate student.”

Morris University Professor Dale W. Jorgenson, who taught Hubbard in an econometrics course, remembers Hubbard’s “outstanding educational skills.”

“He was one of the best people we had of his generation,” Jorgenson says.

While at Harvard, Hubbard was also a teaching fellow in economics and a resident tutor in Dunster House.

Hubbard’s graduate dissertation, “Three Essays on Government Debt and Asset Markets,” was supervised by Maier Professor of Political Economy Benjamin M. Friedman ’66, visiting professor Jerry A. Hausman, and Baker Professor of Economics Martin S. Feldstein ’61.

Hausman, a professor at MIT who visited Harvard in 1982-83, recalls that Hubbard was “clearly among the best people in his class.”

Hausman says that he was also amazed at how Hubbard thrived at Harvard and afterward.

“In terms of being at the top of his profession, it’s extremely unusual for people to come to from University of Central Florida,” he said. “I still can’t get over the fact that he did so well.”

Some of Hubbard’s colleagues say that Feldstein, who could not be reached for comment for this story, took a special interest in working with Hubbard.

“My sense of it was that Feldstein was more the mentor among that team,” says Robinson Professor of Business Administration Jay O. Light. “There’s a strong intellectual linkage from Marty to Glenn.”

DR. HUBBARD GOES TO WASHINGTON

After receiving his Ph.D. in 1983, Hubbard took a professorship at Northwestern, where he received full tenure after just three years. He stayed at Northwestern until 1988 but spent one year as a visiting scholar at the Kennedy School of Government in 1985.

Hubbard went off to Washington in 1991, spending two years as the deputy assistant secretary for tax analysis at the Treasury Department under President George H. W. Bush. In the late 1980s and early 1990s, he also took on positions at the Cambridge-based National Bureau of Economic Research and at the American Enterprise Institute, a conservative Washington think tank. He also spent a year at the University of Chicago as a visiting professor in 1994 before assuming a professorship at Columbia.

In 2001, Hubbard took on the chairmanship of the CEA under President Bush—one of the top government positions for economists.

Hubbard’s colleagues say that he had a successful two years at the CEA.

“Usually, the CEA doesn’t get much of a role to play. But Glenn has been one of the most influential ones in years,” says Darius Palia, an associate professor at Rutgers who formerly worked at Columbia and who has co-authored several articles with Hubbard.

“In the last 20 years, he’s certainly one of the top people who has served as head of the CEA,” Hausman says. “Glenn is at least as good, if not better, than anyone that worked under Clinton or the first Bush.”

Hubbard is widely recognized as one of the chief architects of the tax cuts that George W. Bush enacted in his first term.

While the tax cuts came under fire when the budget surplus turned into a deficit, Hubbard has publicly defended Bush’s tax cuts and his stance on the economy.

Columbia professor Michael Adler notes that although there has been much debate over the White House’s economic policy, he has heard little criticism of Hubbard’s performance in Washington.

“The worst thing I heard about Glenn was that as chairman of the Council of Economic Advisers he would scurry to be seated as close to the president as possible,” Adler says. “Every other mention of him in all the major publications have all been respectful, which amazes me.”

“And getting seated close to the president paid off, because he was the architect of the tax cut,” Adler adds.

Although Hubbard returned to the academic world in 2003, he remains an active supporter of the Bush administration and advised Bush’s reelection campaign last year.

BACK IN ACADEMIA

Hubbard went to New York to work at Columbia’s Graduate School of Business, where he rose to be dean in 2004. After joining the Columbia faculty in 1994, Hubbard gained a reputation for his leading academic work in financial markets, particularly in public finance and private entrepreneurship. While his work on information security, senior-executive compensation, and investment cash-flow sensitivity earned high marks, his research on Social Security and tax incentives has gained particular prominence, his colleagues say.

Hubbard also spent a year as a visiting professor of business administration at Harvard Business School (HBS) from 1997 to 1998.

Light, who worked with Hubbard during his time at HBS, says that he was impressed with Hubbard’s “deep understanding” of his work.

“He’s one of the best, if not the best, on the intersection of public finance on the one hand...and financing private enterprises on the other,” Light says, describing Hubbard as “careful and circumspect.”

“He measures his words and actions with other people carefully....He’s a good listener,” Light remarks. “But he also has clear views and makes them known in a discussion.”

Hubbard’s colleagues at Columbia offer praise for his first year as dean.

“Glenn is a real straight shooter,” says Columbia professor Eli M. Noam ’70. “He is good to his word and respects faculty and their research.”

Adler adds that Hubbard is “one of the most widely and best-published members of our faculty even though he’s dean, and he commands much respect for that reason.”

Adler also says that the faculty appreciate Hubbard’s leadership style as dean.

“I don’t know of any enemies he has on the faculty....There’s no muttering about Glenn,” Adler notes. “He does not try to dictate other people’s choices. He judges very much on the basis of merits.”

Hubbard’s friends and colleagues speak highly of his personal attributes.

“Glenn is probably one of the most organized and effective people I’ve ever seen in my life. He’s almost super-human in his ability to get things done,” says Gertler, who has known Hubbard since the late 1980s.

“This is someone who really worked his way up—everything was not handed to him on a silver spoon,” Gertler adds.

Robert J. Hodrick, a professor at Columbia, says that Hubbard also has a good sense of humor.

“He made [a joke] the other day that he hoped some committee would be democratic—with a small ‘d,’” Hodrick recalls. “It’s good that he can poke fun at himself.”

Palia adds that Hubbard “has a tremendous ability to focus on the prize, be effective, and work longer hours than anyone I know.”

“He is a self-made man, not from privilege, with integrity,” Palia says.

Hubbard is also co-authoring a forthcoming introductory economics textbook, “Principles of Economics,” with Lehigh professor Anthony P. O’Brien.

THE CONTENDERS

Hubbard is mentioned as one of the top contenders for the Fed job alongside Ben S. Bernanke ’75, a governor of the U.S. Federal Reserve Board who has been nominated to be the next chairman of the CEA and Feldstein, who was chairman of the CEA under President Reagan. (See related stories Monday and Friday.)

At 46, Hubbard is the youngest of the top three contenders.

Comparing Feldstein and Hubbard, Noam says that “Marty Feldstein is a stellar researcher. Glenn is also a gifted researcher, and probably more Washington savvy and politically dependable.”

Some analysts say that Bernanke’s academic focus on monetary policy may distinguish him from Feldstein and Hubbard—both of whom are most famous for their work in fiscal policy.

But Alder, like several other economists who spoke to The Crimson, says that each candidate’s academic specialties are not necessarily relevant to the job.

“The Fed has obligations beyond manipulating the money supply. They target inflation, but they also have a growth mandate,” Alder notes.

Although some analysts think Bernanke or Feldstein is more likely to win the job, several of Hubbard’s colleagues say that it is in his nature to keep a low profile.

“It’s obvious that he’s an effective behind-the-scenes mover and shaker,” Adler says. “In the past, he has never overtly wanted a position, but he’s gotten what he’s wanted.”

—Staff writer Daniel J. T. Schuker can be reached at dschuker@fas.harvard.edu.

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