United States Secretary of the Treasury Jack Lew visited with the UCLA Anderson School of Management‘s Class of 2016. Lew’s visit consisted of a wide-ranging conversation that covered such issues as world economic growth, international sanctions against Russia, U.S. corporate tax inversions and stemming the flow of funds to ISIL (Islamic State of Iraq and the Levant).
Ian Katz, who covers the Treasury for Bloomberg, moderated the conversation.
“There is a problem with growth and demand in many parts of the world,” said Lew, “It was not that many years ago, that the U.S. economy not contributing to the solution, it was seen as the problem, due to the financial crisis. Now the question is, why has the U.S. bounced back and what do other countries need to do if they want to bounce back as well?
“Stimulating demand in the short term is part of the solution,” Lew said. “You can’t cut your way out of economic problems. The discussion has shifted from one of austerity to one of growth.”
Regarding corporate inversions (re-incorporating a company overseas in order to reduce the tax burden on income earned abroad, Lew said that the right answer is tax reform.
“We need to clean up the tax code and take away the thing that’s driving companies to invert. I’ve said before, tax inversions are legal, but wrong. Congress, if they don’t enact tax reform, needs to enact legislation that shuts the door on inversions.”
After his discussion with Katz, Lew took questions from the first year students and was asked about, among other things, the role of the Treasury in the fight against ISIL.