Obsessively loyal correspondent JG of Passadumkeag, Maine, writes to remind that we allowed the diamond jubilee of the Milken Institute Review – the 60th issue – to go uncelebrated. Sorry 'bout that, JG; we were too distracted by Miley Cyrus's contributions to the music scene to give it much thought. But 61 is a pretty cool number, too. According to our resident numerologist, people with the "name number" 61 are good at research but dominating in relationships.
The research part applies to this issue's contents, but not sure about the domination stuff. You'll have to decide.
Larry Fisher, a former business writer for the New York Times, explores a technology that is literally sneaking up on us. "When you think about drones," he writes, "you think about death from the sky. But a host of companies are racing to market with unmanned aerial vehicles intended for nonmilitary applications from wildlife tracking to real estate marketing to last-mile package delivery. The size of the market remains a subject of intense speculation. But the technology is flying ahead, far in advance of regulations governing safety and privacy."
Jim Barth, Priscilla Hamilton and Donald Markwardt of the Milken Institute argue that the sky-high rates paid by the working poor for "payday" loans to tide them over to the next check are symptoms of reversible market failure. "The evidence from pilot programs in which banks do compete directly with payday loan stores suggests that traditional lenders could profit handsomely at far lower interest rates than those charged by the stores," they conclude. "Hence the questions for policymakers: why have banks left ripe fruit to be picked by payday lenders? What could be done to encourage banks to compete for the business?"
Nathan Richardson, a lawyer at Resources for the Future (a DC-based think tank), assuages fears that climate regulation by the EPA will be flat-footed – or worse. "There's every reason to believe that well-designed and, above all, flexible Clean Air Act climate regulation can deliver a lot of emissions cuts for relatively little money and economic disruption," he writes. "There is no other approach to climate policy available today or, given political realities, in the near future, with similar potential."
Yichuan Wang, an economics blogger who is an undergraduate (no misprint) at the University of Michigan, focuses on the underside of China's economic miracle.
"Though China has traditionally been marked by regional inequality, the breakneck pace of development has greatly improved living standards across the country and – contrary to received wisdom – has, in recent years, even worked to narrow the gaps," Wang writes. "Yet I would argue that ongoing unease about inequality is justified: to lock in the gains, the Chinese government needs to take aggressive action to equalize access to social services."
Eric Toder, codirector of the Urban Institute-Brookings Institution Tax Policy Center, plots a tortuous route through the daunting territory of corporate income tax reform. "Tax reform is hardly ever a piece of cake," he writes. "The big question here, though, is why reform of the corporate income levy seems to be an especially daunting project. In my view, the most likely way to break the logjam is to rethink the tax from the basics."
Ed Dolan, an economist who's taught in post-Soviet Estonia and Latvia, ponders why the Baltic states were hit harder by the financial crisis than other European periphery states, but have recovered with alacrity. "Some have chosen to interpret the Baltic experience as a success story for fiscal austerity, as if tax increases and spending cuts were the best cure for economies in a slump," he writes. "I find that hard to support." Dolan's own explanation: a serendipitous mix of location, cultural cohesion and (small) size.
Thomas Healey, a former assistant secretary of the Treasury, describes the other elephant in the room when talk turns to future environmental disasters. "The phrase 'water crisis' has a faraway feel, something that happens on the other side of the world," he writes. "In truth, though, water is in disturbingly short supply in developed countries, too. Think of the western United States and Australia, both of which are in the grips of devastating, decades-old droughts. Unless steps are taken soon to improve the way water is managed, local shortages could cascade into a global catastrophe."
Stan Liebowitz, an economist at the University of Texas' Jindal School of Management, outlines what you need to know about the economics of copyright law. "It has been a matter of debate whether the current law conforms to Constitutional instruction — or more generally, whether the law yields efficient incentives to create and distribute the property in question," he writes. "In fact, the contemporary debate over how best to reconcile the sometimes conflicting goals of copyright regulation is really a modern rendition of a centuries-old argument."
And, of course, there's so much more. In an excerpt from her new book, The Entrepreneurial State, Mariana Mazzucato of the University of Sussex blasts the argument that government investment in technology is inherently wasteful. Demographer Bill Frey of Brookings offers a glimmer of hope that the trauma of recession is easing, and your humble editor marvels at the ubiquity of cell phones in the world's poorest places. —Peter Passell