Published July 31, 2018.
JG, our tireless correspondent from Passadumkeag, Maine, wonders what lame joke I’m going to tell at her expense in this issue. Sorry to disappoint, JG, but I’ve taken pity on you this time around. Well, actually, I couldn’t think of one — my Great Dane ate my copy of The Wit and Wisdom of Former Vice Presidents, which has never failed to inspire. But maybe this dazzling preview of what’s inside the Review will cheer you up.
Dick Schmalensee, the former dean of MIT’s Sloan School of Management as well as the former director of MIT’s Center for Energy and Environmental Policy, lays out a compelling case for a radical reduction in human-origin carbon emissions to stabilize the atmosphere.
“Even though poor nations will be the most important markets for carbon-free energysupply technologies,” he writes, “their development must be driven by wealthy nations. This would not be charity: constructing a low-carbon path to wealth that emerging economies will find attractive will be technically challenging but, considering the size of the market, potentially a big money-maker.”
Jeffrey Schott, a senior fellow at the Peterson Institute for International Economics, explains why the White House’s decision to dump the Trans-Pacific Partnership was a monumental error.
“Once the TPP became a campaign issue, its fate was sealed,” Schott concludes. But there’s no getting around the fact that “the United States is the big loser, both in terms of lost sales and income in the region with the world’s most dynamic economies, and reduced influence in shaping political decisions that affect U.S. security interests. And who is the big winner? China!”
Rachel Sachs, a specialist in health care policy at the Washington University School of Law, explains why drug prices seem to be out of control, and why there is a ray of hope they can yet be contained.
“There is one ironic advantage to being ensnared by the Rube Goldberg machinery of drug pricing in America,” she argues. “It may 4 The Milken Institute Review provide us with the opportunity to consider many different models of drug-pricing reform at once — some on the state level and others on the federal level, some in the private sector and others in the public sector. In the best of possible worlds, the most successful experiments will be scaled to meet national needs.”
James Crabtree, the former Mumbai bureau chief for The Financial Times, examines the depth and consequences of income inequality on the subcontinent. “India need not choose between growth and greater equality,” he writes. “The success of East Asia, which invested in the social and economic infrastructure that increased mobility even as it fed labor and capital into the machinery of growth, shows what can be achieved.”
“But to address the problem of growing inequality, India first needs to admit that the problem is real. If not, failure to protect Indian society from the collateral damage of breakneck growth will prove as counterproductive in the future as the sclerotic socialism that stifled its development for so long.”
Liz Cascio, an economist at Dartmouth, asks why the United States spends a smaller proportion of its GDP on early child care and education than less affluent countries ranging from Mexico to Romania — and what to do about it.
“We can’t expect sensible tinkering at the margins to transform an inadequate system into a good one.” she writes. “Changing incentives, rearranging subsidies and maybe throwing a few billion dollars more into the hopper would get us only a few steps down the road. To properly address the big challenges posed by raising little kids would require the political will to recognize ECEC for what it is — both child care and an investment in the future — and to jettison the traditions and assumptions that weigh down the effort.”
Allen Sanderson, a senior lecturer at the University of Chicago and John Siegfried, a professor emeritus at Vanderbilt, recount the largely accidental history of big-time college football and basketball, and why the link between commercial sports and higher education may not be here to stay.
“First, while legislatures are inclined to turn a blind eye to the market power of the NCAA, the courts may not,” they point out. “Next, changing technologies could erode the value of the broadcast rights fueling both college and professional sports. And finally, it’s worth remembering that the NCAA is a cartel and, as with most cartels, there are powerful incentives for dominant members to seek other means of organization that give them a bigger share of the gravy.”
Madelyn Antoncic, the former treasurer of the World Bank, laments the reality that, even though methods for managing risk from natural disasters exist, just a small portion of the losses are insured. “The number and cost of such catastrophic events are growing,” she points out, “along with the penalties of myopia. Compounding the problem, the everincreasing integration of the global economy is making it harder to duck the consequences of poor planning even when disaster strikes on another continent.”
Last but certainly not least, this issue boasts an excerpt from Radical Markets, a new book by Eric Posner (University of Chicago Law School) and E. Glen Weyl (principal researcher at Microsoft) that seems ripped from the headlines. Vastly increased immigration, they remind, could prove a bonanza for both the immigrants themselves and the American economy. Better yet, they offer a way to bring on board the Americans now most eager to prevent it.
— Peter Passell