Our ever-loyal reader JG of Passadumkeag, Maine, writes to ask why we never publish queries from other correspondents in this space. Good question, JG! Cynics would say it gives us a chance to repeat the charming name of your hometown ad infinitum. But that would be beneath our dignity. And in any event, Passadumkeag’s reign may be ending: we just got mail from a fan in Carne Assada, Portugal, who wonders why everybody misspells the name of her town.
Enough food for thought. Some of our readers are itching to know what we’ve got lined up in this issue.
Alan Krueger, President Obama’s former chief economist, takes aim at barriers to competition in labor markets that sap productivity, even as they reduce both wages and employment. “Countering anti-competitive employer behavior could be a win-win for the economy,” he writes. “But it would take a fundamental shift in perceptions — one that is a hard sell in an America seemingly disinclined to look closely at how everyday labor practices undermine workers’ prospects for moving up the income ladder.”
Nick Eberstadt, a political economist at the American Enterprise Institute, ponders the consequences of the great exodus of men from the American workforce, and brainstorms ways to bring them back. “The progressive detachment of ever-larger numbers of adult men from the reality and routines of regular paid labor can only result in lower living standards, greater income inequality, higher social-welfare bills and larger budget deficits,” he writes. “The first priority is to bring this invisible crisis out of the shadows and into the glare of public scrutiny.”
Ramona Bajema, a Japanese historian, returns to Fukushima six years after the tsunami and the subsequent nuclear power disaster that killed 20,000 and left the Tôhoku region to face a grim future. “No amount of earth moving and concrete pouring is going to fix what ails,” she writes. “What Tôhoku needs most now is help in adapting to rapid economic and demographic dislocation. And that is not an easy sell in a contemporary Japan that’s struggling with all manner of unwanted change.”
Ed Bartholomew, a pension consultant who was the CFO of the Inter-American Development Bank, explains why the looming pension liabilities of states and localities are far worse than the officials in charge acknowledge, or apparently even understand. “Future retirees are in the uncomfortable position of depending on contractual rights that may require courts to enforce — a position made more uncomfortable by the fact that millions of them don’t have Social Security as a backstop,” he explains. “It’s human nature to delay difficult decisions, especially if the current generation of deciders can dump the decisions on the next. Figuring out how we got in this pickle, alas, is much easier than whacking a pathway out.”
Charles Castaldi, a former foreign correspondent for NPR, samples Germans’ reaction to Angela Merkel’s decision to take on the mantle of moral leadership eschewed by the United States in the Syrian refugee crisis. “Germany’s open door came at a steep cost,” he writes. “First, the direct financial outlay ran to $23 billion — just in 2016. And then there’s the political cost. Most polls show that over half of Germans view the refugee issue as the most serious problem Germany faces today.”
Jacob Udell and Glenn Yago, of the Milken Innovation Center at the Jerusalem Institute for Israel Studies, revisit the problem of constructing a viable Palestinian economy from the ruins of permanent war. “Developments on the international stage have a way of distracting from solutions to pressing fiscal, trade, environmental, business and infrastructure issues that could improve daily life,” they write. “It would serve neither Israelis nor Palestinians to cling single-mindedly to the goal of European-Union-style integration. Normalization of economic relations between Israel and an independent Palestinian state will surely depend on an agreement that facilitates trade and capital flows, but that need not imply full integration of labor or capital markets.”
That’s not all, folks. In a chapter from their new book, Beating the Odds, Justin Yifu Lin and Célestin Monga argue that development economics requires a thorough makeover to bring lagging nations into the mainstream. The eminent demographer Bill Frey explains why U.S. population growth is heading for zero. And your humble editor investigates whether The Economist magazine’s Big Mac Index is a reliable guide to international differences in the cost of living. Browse wisely, my friends. — Peter Passell