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Editor’s Note

Published April 21, 2023


Mary Lovely, a senior fellow at the Peterson Institute in Washington, takes a hard look at the likely consequences of President Biden’s drive to reduce US economic dependence on China and to contain its ambitions to achieve technological parity with the liberal democracies. “Unless Washington tempers its ambitions for isolating China,” she concludes, “the US risks isolating itself instead. This would represent a failure of leadership that would weaken American competitiveness and leave our friends and allies more — not less — dependent on Chinese markets.”

Remember the Concorde, the supersonic airliner that used to whisk CEOs and movie stars from New York to Paris at 1,300 mph? Larry Fisher, a former New York Times reporter, casts a gimlet eye on a flurry of startups promising to restore intercontinental supersonic travel within a decade. “The Concorde was a nice treat for the well-heeled — a roundtrip ticket averaged $10,000 when $10K was considerably more valuable,” Fisher reminds. “But it never penciled out, not even close.”

Now he’s wondering what the venture capitalists who are staking a handful of SST dreamers to generous bankrolls are smoking: “If hype and hubris were jet fuel, we’d be flying from Los Angeles to London in two hours for $200 by now.”

Alan Krupnick and Emily Joiner of Resources for the Future, a Washington think tank, offer a preview of carbon capture and storage — technologies designed to neutralize climate-warming emissions before they enter the atmosphere. “CCUS is most attractive today because it can be grafted onto especially carbon-intensive activities like fuelrefining as well as energy-gobbling industrial processes like cement-making and electricity generation,” they write. “But it’s hardly going to be all wine and roses from here on out. Despite billions of dollars of investment in R&D and the aforementioned rich incentives for adoption, CCUS has yet to prove it is ready for the large-scale deployment.”

Alan Auerbach (UC-Berkeley) and Larry Kotlikoff (Boston University) take the analysis of the government’s response to economic inequality to a far more comprehensive level. “The methods used by most economists,” they write, “are ill-suited to answer a key question about inequality — who gets to spend what, not just this year, but over the remainder of lifetimes.” And here’s the serendipitous payoff: “Some of our conclusions should help to assuage the concerns of those who’ve concluded that government policy has done little to offset market-driven inequality.”

Chris Edwards of the libertarian Cato Institute explains how state governments reduce labor mobility, raise consumer prices and even increase prison recidivism by licensing occupations ranging from hairdressing to sports refereeing and insisting that licensees be of “good moral character.” But the news isn’t all bad. “In response to growing evidence, public-interest challenges to licensing have made some headway in both legislatures and courts,” he writes.'

Josh Gordon and Darbin Wofford of the non-partisan Committee for a Responsible Federal Budget in Washington outline six changes in federal regulation that would reduce America’s health care bills by trillions — that’s right, trillions — over the next decade. “These six options are hardly the only ways to reduce health care spending without reducing quality,” they explain. “But they would be major steps forward in addressing the market failures and misaligned incentives that drive high spending. They would also be tests of Washington’s determination to increase the efficiency of the health care system in the face of powerful lobbying for the status quo on the part of entrenched interests.”

A phaseout of fossil fuel vehicles to ones powered by electricity is one key to containing climate charge. But are subsidies necessary or even desirable to speed the transition? Cliff Winston of the Brookings Institution makes the case that less may actually be more. “Speaking as a one-handed economist,” he writes, “pollution externalities (in particular, climate warming) appear to justify active government efforts to spur EV adoption. But as a two-handed economist, I recognize that government intervention may do more harm than good.”

If you are not an economist, the most likely place you’ve run across J. Bradford De-Long is his always-engaging blog, Grasping Reality. Within the profession, though, the UC-Berkeley professor is known as an economist’s economist, whose specialty is, well … non-specialty. Here, we excerpt a chapter from his new book, Slouching Towards Utopia: An Economic History of the Twentieth Century, a far-reaching examination of economic growth since 1870 with numerous digressions along the way.

Happy perusing. —  Peter Passell