Editor’s Note

This is shaping up as quite some year. But at least it gives me an excuse to dredge up my favorite poster slogan for hard times: Keep Calm and Carry On. Though printed in large numbers (over two million!) by the UK’s Ministry of Information on the eve of the Battle of Britain, oddly the meme didn’t catch on. So maybe it’s time to give it a try when democracy is once again enduring hard innings.

Enough doom and gloom. You’re reading the MI Review, where we make it a rule not to duck bad news but rather to point toward solutions. Hence this terrific lineup.

Barry Eichengreen, an economic historian at UC Berkeley, examines the consequences of the European Union’s half-pregnant economic integration. While there are virtually no barriers to trade, investment or labor mobility, and while the core countries share a common currency, integration stopped short on spending and taxation. And as a result of this reluctance to surrender national fiscal in-dependence, Europe’s collective capacity to manage crises ranging from the banking meltdown to Covid-19 to the defense of Ukraine has been severely impaired.

Eichengreen argues that it’s pretty clear what needs to be done, but doubts the political will exists to do it: “It took the better part of 150 years, punctuated by a devastating civil war, the Great Depression and World War II, for America to complete its fiscal and political union. Europe may be moving down the same path but, by any honest evaluation, remains far from the destination.”

Corporate philanthropy is extended for a variety of reasons, and with a wide range in impact. Little is known about what makes initiatives succeed or how systematic analysis can be applied to improve outcomes.

Well, until recently, anyway. Melissa Stevens and John Schellhase of the Milken Institute interviewed dozens of stakeholders in corporate philanthropy to sort out what works, coming up with five principles for assessing impact. The payoff of managing the job well extends well beyond the direct beneficiaries. “Companies that tap into the talents of their philanthropy teams will set themselves up for long-term competitive success. Just as importantly (if not more so) they will also contribute to making the broader society more equitable and prosperous.”

Brad DeLong, another economist at UC Berkeley – a very good econ department these days – fixes a gimlet eye on Washington’s ballooning debt. On the bright side, he says there is zero evidence that investors are losing faith in Treasury debt – and solid reasons to believe they won’t anytime soon. But, alas, ongoing political deadlock is chipping away at his confidence.

“I wish I could tell you that America was on a path on which government programs will be roughly covered by taxes, and that the growth rate of the economy is likely to be higher than the real interest rate so debt growth would not be a problem,” DeLong writes. “Wishes won’t cut it, though, unless America’s political economy fundamentally changes.”

You’ve probably heard of “ranked choice voting” in the context of nerdy discussions of political science. But Deb Otis, the director of research at the nonpartisan, nonprofit Fair-Vote, sees the mushrooming procedural reform as a very big deal. “RCV is hardly the fix for all that ails the democratic process in America,” she writes. “But 20 years of RCV elections show that it does reward candidates for connecting with a broader swath of the electorate and gives more voters confidence that their choices matter. What’s not to like?”

Every American child is guaranteed a free, 12-year education. But for the years before first grade, the landscape is a hodge-podge covering everything from subsidized infant daycare to Head Start for preschoolers to bare-bones standards for private care and education.

Aaron Sojourner, an economist at the Upjohn Institute, explains why the correction of this lapse would pay immense dividends to both society as a whole and the families of the kids now left out. “Rather than thinking of early care as a costly burden, we should recognize it as a unique investment opportunity. ... I’d go further: as long as government fails to close the large investment gaps in early childhood development, America is certain to break its promise of equal opportunity.”

As global economic integration stalls, most economists are now arguing that the consequences for the United States will be unfortunate, but modest. Consider then, the cautionary tale of the Jones Act, the century-old law that prohibits foreigners from competing in domestic shipping.

“When the United States first imposed restrictions on foreign shipping,” writes Colin Grabow of the Cato Institute, “it was a country renowned for its shipping and shipbuilding prowess. The costs were arguably a reasonable sacrifice in the name of meeting U.S. defense needs. Today, the restrictions disrupt domestic supply chains, add to highway and rail congestion, contribute to pollution and strain relations with U.S. trading partners who retaliate against American exporters – all without doing a lick to enhance national security.”

Last but truly not least, this issue excerpts two books on public policy that deserve a wide audience. Jisung Park (Wharton), the author of Slow Burn: The Hidden Cost of a Warming World, turns our attention from how to stop global warming to managing the inevitable consequences on people and places. Likewise, James and Robert Rebitzer (Boston University and the Manatt consulting firm, respectively), the authors of Why Not Better and Cheaper: Healthcare and Innovation, turn our attention from the demand-side in health care to neglected nuts-and-bolts issues in making it more productive.

Happy perusing.

— Peter Passell