The summit "Where Does the U.S. Economy Go From Here?" was moderated by economics professor David Blanchflower, a former member of the Bank of England's Monetary Policy Committee.
The four panelists, who discussed their predictions for the American economy and their prescriptions for improving its recovery, debated questions posed by both Blanchflower and audience members.
Irwin, a reporter for The Washington Post, discussed the unusually slow current rate of recovery, and the risk of various external factors including high oil prices and the European debt crisis derailing that recovery.
"We're on a very soft growth rate, and anything could knock us off," Irwin said. "Households are paying down debts and exporters are becoming more competitive, but it's going to be a rough few years."
Keene, Bloomberg News editor-at-large, described the recession as a "pop" in an economic bubble that had previously masked serious problems. The American public is increasingly fatigued with the economic situation, and there is pervasive fear of plutocracy among those he has interviewed, he said.
Unlike the first two panelists, Washington Post reporter Samuelson said he was markedly more optimistic about the economy's prospects. Although a series of severe, underexposed imbalances derailed the economy, Samuelson pointed to various signs of improvement, such as a slower rate of decline for housing prices and a weaker American dollar, which permits greater competition in the world market.
Samuelson also emphasized the role of psychology in economic recovery and warned that events such as the European debt crisis and higher oil prices could easily destroy confidence in the recovery.
"To the extent that we had irrational exuberance during the boom, I think we might have irrational pessimism during the recovery," he said.
Rauner, co-founder of the private equity firm GTCR, emphasized the importance of stability and predictability to a recovery. The current U.S. government's policies are "anti-business" and "unpredictable," and have prevented the market from regaining stability, he said. Rauner also criticized public sector unions, which he described as a "financial tumor" that had unnecessarily diverted resources from productive means. The poor U.S. education system also continued to retard growth and job creation, Rauner said.
"Thirty percent of our first graders today graduate from college, and 80 percent of job openings require a college degree," Rauner said. "We should have the best educational system in the world, and the fact that we don't is unacceptable."
When asked what could restart the economy, Rauner said that America should return to its core principles, which he identified as limited government and personal responsibility. Government regulation, increased spending and new legislation such as the recently passed health care bill have distorted the free market, increased business expenses and created uncertainty and instability, he said.
Irwin disputed several of Rauner's statements, arguing that deficits are not contributing to low job creation. Irwin also challenged Rauner regarding whether financial regulatory reform had been beneficial.
Samuelson and Keene both discussed the need to reform entitlements in order to restore confidence in the government, alluding to Britain's recent attempts to restore consumer confidence through an austerity program. Blanchflower, however, interjected to say that consumer confidence in Britain is actually lower now than it was in the depths of the recession.
Although increasing the investment rate is one of the keys to restarting the economy, Keene said he saw no obvious way in which to enact such a change in the United States.
"How do we jump-start investment?" Keene said. "I ask this in a lot of my interviews, and what I get is a lot of silence."
Samuelson criticized the tendency to politicize the downturn, and said the economy would not have recovered even if controversial government policies had not been enacted.
Political considerations have prevented many people from understanding the nature of the crisis, he said.
"People don't describe anymore they argue," Samuelson said. "The first obligation is to understand what is going on before deciding what to do about it."
The President's Office and the Office of the Dean of Faculty co-sponsored the panel discussion.
