Published October 29, 2018


No, dear readers, your eyes do not deceive: The Milken Institute Review is now printed in glorious living color. This will give our designer, Joannah Ralston, more leeway to work her magic, adding touches of irony and whimsy to talk of monopsony power, dependency ratios and tax expenditures. Speaking of which, check the line-up for the 80th quarterly edition:

Nigel Gould-Davies, a former British diplomat who is an associate fellow at the Chatham House policy institute, explores Vladimir Putin’s efforts to make the Russian economy great again. “It is very unlikely that Russia will become the ‘modern and vibrant’ economy that Putin imagined at his inauguration — the problems holding it back are deeply rooted in its system, and long-debated reforms that might tackle them will not be adopted,” he concludes. “Rather, Russia faces relative decline and growing isolation in a global economy.”

Annie Donovan of the U.S. Treasury Department and Kim Saunders, a senior advisor to the Milken Institute’s Center for Financial Markets, explain how tax breaks for investments in newly designated Opportunity Zones could turbocharge ongoing efforts by community development financial institutions to direct capital to low-income communities. “CDFIs have a great deal of hard-earned expertise to make the most of Opportunity Zones,” they enthuse. And, “because the new tax incentives are specifically designed to attract equity capital, the credit products provided by CDFIs could leverage both the social impact and private return of Opportunity Zone funding.”

Simon Haeder, a political scientist at the University of West Virginia, analyzes the prospects for state-based “single-payer” health insurance in the age of Trump. “There is much to like about single-payer systems that could translate into popular appeal,” he writes. “In particular, it would make universal coverage practical and it would give the sole insurer the tools to cut costs. But a go-it-alone single-payer system at the state level would face formidable obstacles, even if it had the wholehearted support of the federal government. Which it would not.”

Brad DeLong, a former deputy assistant secretary of the Treasury, compares the impact of the Great Recession with that of the Great Depression of the 1930s, concluding that the recession may have actually resulted in more lasting damage. “Economic analysis has made the rise and fall of economies easier to understand and easier to manage — or at least I thought it had,” DeLong writes. “Yet once again, policymakers (including the decision makers at the top in the Obama administration) abandoned modern economics in favor of discredited policies born of a mixture of so-called common sense and 19th-century misunderstandings. We are all paying the price — well, the bottom 99 percent of us, anyway.”

James Manyika, the head of the McKinsey Global Institute, assays the economic dislocation likely from the rise of artificial intelligence, and his conclusions are disquieting. “Today, higher education encourages the world to judge graduates by their subject knowledge rather than by their skills in problem-solving and creative thinking — skills that will be especially valuable in an AI-enhanced workplace,” he writes. “More than anything, we need to prepare for this new era in which humans must work alongside smart machines far more intensively.”

Adam Looney, director of the Center on Regulation and Markets at Brookings, and Tara Watson, an economist at Williams College, take a hard look at what went wrong in the government’s giant student loan program, and how changing the financial incentives of educational institutions could go a long way to making it right. “The key to improving outcomes for student borrowers is to toughen institutional accountability,” they write. “One promising approach is risk sharing, in which schools bear a portion of the financial consequences that students (and taxpayers) face from poor outcomes.”

In his “Letter From Nicaragua,” Charles Castaldi, a former NPR reporter in Latin America, explains the political/economic origins of the revolt against the tiny country’s increasingly autocratic government, and the tragic consequences of the uneven battle that followed. “Seeing Daniel Ortega bask in the support of his assembled multitudes, one could conclude that the rebellion had been ignominiously crushed,” he writes. “Ortega and his wife seem confident they can return to autocracy-as-usual, ruling with a mix of threats and well-placed patronage. But the rebellion did force the presidential couple to show their true colors, and what the world saw was an all-too-familiar Latin American dictator willing to do whatever was necessary to stay on top.”

Bill Frey, a demographer at Brookings and the University of Michigan, as well as a senior fellow at the Milken Institute, offers a statistical portrait of the millennial generation. “Now, all adult millennials make up nearly a quarter of the total population, 30 percent of the voting-age population, and almost two-fifths of the working-age population,” he writes. “While much attention has been given to this generation’s technological savvy, tolerance and independence, and its skeptical view of established institutions, I would argue the one characteristic of millennials that matters most is their racial and ethnic diversity.”

That’s all, folks. But, hey, I think it’s quite a lot.

— Peter Passell