Editor’s Note

Serious times call for serious analysis. But we managed to find a whole bunch of experts to write about solemn subjects with a decidedly light tone. Give them a look-see.

Barry Eichengreen, a professor of economics at Berkeley, offers a postmortem on Brexit — in particular, the difficulty of distinguishing among the multiple forces that have undermined the UK’s prosperity for decades. “Seven years after the EU referendum, it is not easy to say how much harm was done by Brexit,” he writes. “No question, growth in the UK since 2016 has been disappointing compared to Britain’s peers and compared to Britain’s own past performance. The UK has the lowest growth rate among G7 economies, and the IMF forecasts that it will be the only major economy to shrink in 2023. But there are many explanations for this tepid performance.”

Najah Farley, a senior staff attorney at the non-profit National Employment Law Project, explains why noncompete clauses in employment contracts have morphed from a C-suite problem to a scourge undermining the economic mobility of tens of millions of low-wage workers. “When you think of noncompete clauses in contracts (if you think of them at all), you probably imagine high-tech firms worried about guarding insider secrets,” she writes. “What you surely don’t ponder are noncompetes that prevent sandwich makers or gas station clerks from moving across the street to earn a couple bucks an hour more.”

Larry White, a professor of economics at New York University and former bank regulator, assesses what happened to Silicon Valley Bank — and what needs to be done to stabilize a system most of us thought was already solid. “Like plumbing, when banking works well, nobody much notices,” he writes. “When banking has problems, however, everybody has problems. Even if the short-run fixes can keep the wheels turning, the long-run problems are ignored at our peril.”

Larry Fisher, a former New York Times reporter, takes a hard look at the prospects for desalination as a long-term solution to the growing problem of regional drought. “In an era of rapid climate change, not to mention quasi-religious faith in the redemptive powers of technology, the idea of tapping the sea to fill the reservoirs (and swimming pools) of coastal megacities doesn’t seem so farfetched,” he acknowledges. “But the more one looks at desal, the more convincing the case for getting ahead of water shortages by focusing first on the boring low-tech stuff like roofing irrigation canals to reduce evaporation and capturing billions of gallons of water from storm runoff.”

Cecilia Esterline and Matthew La Corte of the Niskanen Center ask what can be done to reduce the economic damage and human misery caused by America’s stalemate on immigration policy. “With families divided and procedural inefficiencies worthy of Bleak House, the status quo is an affront to both common sense and decency,” they write. “Congress probably won’t manage to straighten up and fly right. Nor could President Biden thoroughly overhaul American immigration without legislative blessing. But incremental changes initiated by the executive branch could still make a big difference.”

Ed Dolan, an economist at the Niskanen Center, explains a poorly understood phenomenon in macroeconomics, and how it has compounded the Fed’s problems in navigating between inflation and unemployment. “A close look at changes in prices during and after the pandemic reveals a missing element in the Fed’s analysis: too little attention to the problem of price ‘stickiness,’ ” he writes. “Two aspects of this stickiness are relevant. One is that prices in some sectors of the economy respond much more quickly than others to underlying changes in supply and demand. The other is that prices in almost all sectors of the economy are more flexible upward than downward.”

Edward Tenner, a research associate at the Smithsonian Institution, tracks the gradual — then, not-so-gradual — progress of artificial intelligence through its application to chess competition. “The most important lesson of computer chess may be the contrast between its uncanny consistency and the results of chatbots like the notorious ChatGPT,” he writes. “To be safe, the chatbot user needs to know enough to verify the answer, just as an airline pilot must be able to operate controls when autopilot fails. In this light, the fallibility of even the greatest human grandmasters is not a bug but a feature.”

Scott Fulford, a senior economist at the Consumer Financial Protection Bureau, explains in this excerpt from his book The Pandemic Paradox how Washington rose to the immense challenge of containing the financial consequences of the households hardest hit by Covid-19. Almost as important, he argues that families discovered they had more agency over their own destinies, asserting their independence over how and where they worked and how they protected their financial security.

Happy perusing. —  Peter Passell