JG of Passadumkeag, Maine writes to ask how we get anything done in the glorious summer weather of Santa Monica, the home of the Milken Institute.
While I detect a note of envy in your question, JG, I'll ignore the bad vibes and give it to you straight: the weather is nearly perfect here all year 'round, so we get used to it. Besides, we have all that time stewing in traffic on the 405 freeway to counteract the euphoria. Whatever the reason, though, I think you'll find we've done a better-than-credible job putting together this bang-up summer issue.
Ramanan Laxminarayan, the director of the Center for Disease Dynamics, Economics and Policy in Washington, explains how countries suffering from epidemics too often have incentives to hide the problem before the disease crosses borders. "One possibility," he suggests, is to "create a global audit agency for pandemic risk along the lines of a securities-rating agency like Moody's or S&P. A complementary approach would be to establish a global insurance fund that countries could use to purchase coverage against pandemic-related economic losses."
Elizabeth Kneebone, a fellow at the Brookings Institution, takes the measure of a large and growing problem that most Americans don't know exists: suburban poverty. "It's not that poverty suddenly shifted from cities — or, for that matter, from the long-struggling rural areas that stretch from Appalachia to California's Central Valley," she explains. "In the 2000s, more poor people moved to suburbia, whether in search of better schools or safer communities, or to follow job opportunities that continued to shift away from downtown.
But placing too much emphasis on who moved risks overlooking a key, and perhaps even larger, driver of the broader trend: the increased impoverishment of longtime suburban residents."
Robert Looney, an economist at the Naval Postgraduate School in California, assesses the consequences of Turkey's dive into authoritarianism. "President Erdogan threatens to join the growing number of autocrats who champion economic policies that deliver immediate benefits to favored constituents but undermine sustainable growth. Even as Venezuela reels from Chavistanomics, Russia languishes under Putinomics and Argentina cleans up the mess left by Kirchnerism, Turkey threatens to descend further into Erdoganomics."
Ed Dolan, creator of his eponymous blog that clarifies all matters economic, outlines a universal health care system that ought to pass muster with the right as well as the left. "Some conservatives would reject it as too broad and too costly," he acknowledges. "Others reject the whole idea that government should treat health care as an entitlement. Still others might endorse each part of the proposal in principle, but fund them so inadequately that they would not work as intended. But the troubled effort to repeal Obamacare made it very clear that Republicans as well as Democrats value access to affordable health care — and don't much care about the ideological underpinnings."
Howard Esaki, a former researcher at Standard & Poor's, and Larry White of New York University, suggest a way to eliminate the ratings agencies' incentives to compete by understating risk. "Our proposal is parallel to the process used to limit the impact of biased judges in Olympic events ranging from gymnastics to diving," they write. "In these sports, the score chosen by the most lenient judge on a multi-judge panel is automatically dropped. In our proposal, the ratings agency that proposes to rate a securities issue most leniently would similarly be dropped."
Komal Sri-Kumar, the head of Sri-Kumar Global Strategies, and Masood Sohaili, a partner in the law firm DLA Piper, make the case for a universal basic income entitlement. "The idea of a no-strings-attached monthly stipend to every resident has been widely touted as a substitute for a social safety net that could satisfy both liberals and libertarians," they write. "We think it could do much more, serving as the rock on which to build a fairer and more efficient economy."
Tim Koller, James Manyika and Sree Ramaswamy of the McKinsey Global Institute explain the findings of their research into corporate America's focus on next quarter's results. "Policymakers and pundits alike have been raging against 'short-termism' on the part of corporate managers for decades," they write. "But there has been precious little hard evidence that a failure to think long term actually harms companies' performance — and, more broadly, the performance of the American economy. That is, until now."
Ross DeVol, the chief research officer of the Milken Institute, takes issue with the Trump administration's plan to cut subsidies for university-based research. "Research universities remain one of the strongest assets America has to compete in an era in which virtually all growth in high-income industrialized economies is driven by innovation," he says. "The social rate of return on public funding for university research is exceptionally high. Cutting subsidies thus has all the earmarks of eating the proverbial seed corn."
Yes, you guessed it: there's more, more, more. MIT's Andrew Lo offers a revolutionary alternative to market economics as usual. Meanwhile, Bill Frey, a demographer at Brookings and Milken, slices and dices the 2016 election results in a strikingly new way. What are you waiting for? Dig in.