JEFFREY BROWN: Well, John Taylor, same question. What is the problem that most needs to be addressed by whoever is the next president?

JOHN TAYLOR, StanfordUniversity: That unemployment rate. It's too high. It shouldn't be this high. And it has increased a bit.

But it's increased even more in states like—I think Pennsylvania went up from 7.4 to 8.2 over the last few months. And the reason is the weak economy.

We shouldn't be growing this slowly. We have an economy which can do much better. It's done better in similar periods in the past. And with the right policies, it can do much better, get the unemployment down much further.

And there's also people dropping out of the labor force. You know, in Ohio, since the recovery began, 194,000 people just dropped out of the labor force, stopped looking for work. That's another bad sign that I think people should be very concerned about. It's really depressing what's happening with respect to the labor market right now in this country.

JEFFREY BROWN: But how much of it, Austan Goolsbee, back to you, is the immediate economy, the cyclical—the cycles that we see, and how much of it is what is talked about it as more structural issues, changing technology, globalization, a kind of new normal that we have heard about from many people?

AUSTAN GOOLSBEE: Well...

JEFFREY BROWN: Hold on. Let me go with Austan Goolsbee here first.

JOHN TAYLOR: OK.

AUSTAN GOOLSBEE: OK.

So, two parts, one, of the how much of the unemployment rate is coming from structural, I think not that high. I do think that is the thing that the economy is going to have to do. The fundamental reason why this recession looks a lot like the 2001 recovery and not the 1983 recovery is we can't go back to doing what we were doing before the recession began.

Just, as in 2001, a bubble popped and then you're trying to shift what the economy is doing. So there is some element of that.

But we also have got a significant component, as I say, of the whole world has slowed down. The U.S. growth rate, while not fast enough, is faster than the rest of the advanced world.

So we have got to find a way to get ourselves boosted up where we're not getting any support from being able to increase our exports to other countries, when that is exactly the place that we need to be transforming into. So that is what made it more difficult.

JEFFREY BROWN: John Taylor, what is your answer to that, cyclical vs. structural, when it comes to jobs?

JOHN TAYLOR: I think it's largely cyclical. It's because the growth rate has been so slow coming out of the recession. And you can't blame the rest of the world. The U.S. has had strong growth in the past when Japan has been suffering. And so it's our own problem. It's our own policies that's the trouble right now.

And I think that's what—why I am so frustrated, why I think it's tragic, quite frankly, because we could have better policies. We could have had this unemployment rate down already with the right policy.

JEFFREY BROWN: Well, staying with you, John Taylor, then what can a president—we hear a lot of promises in this campaign. What can a president or a president and Congress actually do in terms of magic wands?

What—when they say they will do something, how much can they do immediately to affect the unemployment rate?

JOHN TAYLOR: I think they can do a tremendous amount.

It's not a magic wand. It's just basic economics.

We saw this in the '80s and the '90s. It's not a partisan issue. When the right policies are in place, when we don't have all the short-termism, the temporary stimulus packages or increases in regulation, the fiscal cliffs, when we get a solid policy that's predictable, the economy grows.

And when we have tax reform, we get tax rate downs, it stimulates incentives for firms to hire people.

It really is basic economics. And, again, that why this is tragic. Applying basic economics, we could do a lot better.

JEFFREY BROWN: Well, Austan Goolsbee, do you want to respond on what the president you worked for has done?

AUSTAN GOOLSBEE: Look, I will just say that we can agree on the basic economics, but I think that Professor Taylor has got his history a little backward on that.

In the 1990s, Bill Clinton raised exactly the high-income tax rates that Barack Obama wants to return the rates to.

And the 2000s, which he didn't mention, when George Bush followed the policies very similar to what Mitt Romney is proposing, they actually added more than one million fewer private sector jobs in George Bush's first term than President Obama has under his first term.

So I really do not think that the basic economics or the history says that just going back to deregulation and high-rate—high-income rate cuts is the thing that leads to growth.

JEFFREY BROWN: And do you think, Professor... Well, go ahead. Go ahead.

JOHN TAYLOR: We saw two decades, '80s and '90s, with extraordinary growth. Economists called it the great moderation, long boom.

And that's because those stable policies were put in place, the tax reform, if you like, of 1986, a bipartisan reform.

President Reagan worked with Democrats in Congress. That is the kind of thing we need now to get this strong economy back.

JEFFREY BROWN: Back to you, Professor Goolsbee, just this question about...

AUSTAN GOOLSBEE: I agree with that. I think tax reform and a grand bargain-type budget deal, if done in a balanced way, I think that would be a good achievement for both parties.

And whoever is elected on Tuesday, I hope they will do that in 2013.

JEFFREY BROWN: How much—Austan Goolsbee, back to the question of how much can a president actually do, because we hear so much in a campaign about what will happen, what will happen quickly if one or the other is elected.

AUSTAN GOOLSBEE: Right.

You know, I used to—I was in the White House for a while and I used to joke, I crawled all around in the basement, I have yet to find that switch down there that you just flip it and then everything gets better.

I think 90-plus percent of what happens in a growing economy has nothing to do with Washington.

What the president and what Washington, in general, can do is try to set the stage and set a groundwork for policy that could encourage growth. And I think the shorter term that you are thinking about, the less can be done specifically by the president.

So if you are asking over a one-month or three-month period, there's very little the president can do.

If you start asking over a five-year, 10-year period, then the policy decisions they make can influence quite a lot the way things go.

JEFFREY BROWN: And, John Taylor, brief last word on that?

JOHN TAYLOR: Well, I think, as we are talking about four years, what is going to happen in the next four years, that is a time where a president can make a tremendous difference.

And we're talking about the past four years. And the president could have made—agree with Austan—could have made a much better policy with the unemployment being so high.

JEFFREY BROWN: All right, John Taylor and Austan Goolsbee, thanks so much.

AUSTAN GOOLSBEE: Thank you.

JEFFREY BROWN: And if you're ready for more analysis on the jobs numbers, you will find it, as always, on Paul Solman's Making Sense page online.