Editor’s Note

Warren Miller/The New Yorker Collection/The Cartoon Bank

Published January 22, 2018


In heaping praise on the past issue of the Review (volume 19, number 4), tireless correspondent JG of Passadumkeag, Maine, wonders what economic policy junkies did for a fix before the publication of volume 1, number 1. Opinion is divided, JG. Objective observers would say that the Economist, the Wall Street Journal and the Financial Times were already on the case. We like to think of the Review as the delectable icing on the cake. Check out this issue’s multiple flavors.

Barry Eichengreen, an economist at Berkeley, explains what must be done to save Europe’s noble experiment with a common currency from resurgent nationalism. “Marine Le Pen, the hard-right French politician who opposed Emmanuel Macron in the second round of the French presidential election, called the euro ‘the corpse that still moves,’” writes Eichengreen. “Angela Merkel and Macron now have a narrow window in time to breathe new life into its body.”

Andrew Zimbalist, an economist at Smith College and gadfly to the sports establishment, surveys the wreckage of the Olympic Games system and offers some radical fixes. “The business model of the IOC has been that of an unregulated monopolist extracting maximum financial commitments from potential host cities seeking (elusive) prestige and (illusory) profit,” he writes. Over the decades, this auction-like process yielded ever more elaborate bids, putting hosts at ever-greater risk. “Yet, even monopolists can price themselves out of the market.”

Gary Hufbauer and Euijin Jung, researchers at the Peterson Institute for International Economics, consider the impact of Nafta, and game out the likely consequences of President Trump’s demand that Americans get a “better deal.”

The most plausible outcome: “Mexico and Canada offer concessions that would not only please the Trump team but also make sense for their own economies — for example, larger purchases of natural gas by Mexico and fewer restrictions on dairy imports by Canada. … At some point, the logic goes, President Trump will be distracted, allowing U.S. negotiators to retire from the field of battle with sound and fury signifying little.”

Larry Fisher, a business reporter for The New York Times and other publications, explores the new technology for mass storage of electricity — the current bottleneck to an all-renewables energy future. “When battery storage was too bulky and too expensive to power cars,” he writes, “Toyota and Honda developed hybrids in which the electric motor augmented rather than replaced the internal combustion engine. … Utilities are taking a similar approach with storage for the grid,” Fisher writes.

Ed Dolan, creator of his eponymous blog that makes economic policy look simple, takes a skeptical look at the new enthusiasm for tying work requirements to government safety net programs. “The New Testament injunction, ‘If anyone is not willing to work, let him not eat’ might accurately reflect the ethos of a hardscrabble Mediterranean culture two millennia ago and may still ring a moral bell for some today. But it is not a practical guide to contemporary policy,” Dolan writes. “Moving people from welfare to work is a worthy goal. However, getting there requires much more than issuing a command and waiting for the salutary results.”

Charles Castaldi, a former NPR correspondent in Latin America, takes the measure of the new Colombia, built on a fragile peace with narco-trafficantes, left-wing guerillas seeking land reform and right-wing death squads hired to slaughter them. “Of course, Medellín was, for many years, synonymous with the mayhem perpetrated by the Medellín Cartel and its infamous ‘capo dei capi,’ Pablo Escobar,” Castaldi writes. “The ghost of Escobar still haunts parts of the city. But you wouldn’t know it if you stick to the center, lined as it is with glistening high rises and the lush landscaping that makes Medellín’s nickname as the city of eternal spring more than wishful thinking.”

Robert Puentes, head of the Eno Center for Transportation, pushes the reset button on stalled plans for Washington to spend our way out of infrastructure problems. “There is plenty to do without a trillion-dollar federal commitment to infrastructure renewal,” he writes. “Leadership on the state and local level can be encouraged and rewarded. Public-private partnerships can take some of the burden off taxpayers and perhaps serve as a catalyst to the sort of innovation usually driven by private competition. None of this amounts to the sort of grand gesture loved by politicians,” he adds. “But it is the sort of pragmatic adaptation to changing circumstances that has served America well since the beginning.”

Oh, one more thing: Don’t neglect the excerpt from Nobel Prize winner Jean Tirole’s new book, Economics for the Common Good. Happy perusing.

Peter Passell