Editor’s Note

I’m delighted to be tooting the horn for this, the 106th quarterly print edition of the Milken Institute Review.

But first I want to remind readers that the contents of this issue (along with all issues from the past decade) can also be found on our website: www.MilkenReview.org. In fact, the online Review also includes numerous articles with shelf lives too short to fit comfortably in the print version. Give it a look-see. Meanwhile, do check out the current print edition.

Ed Dolan, a senior fellow at the Niskanen Center think tank, is at ease with falling fertility rates and the prospect of a declining global population. “There are good reasons why it would be wise not only to accept lower fertility as inevitable, but also to embrace it,” he points out. “We should celebrate the main causes – empowerment of women, better education, higher incomes and lower mortality at both ends of the human lifespan – for their own sake. At the same time, we should welcome the environmental benefits of lower human populations.”

Barry Eichengreen, an economist at UC, Berkeley, explains why the German and French economies, lynchpins of the European Union, are both in deep trouble – but for very different reasons. “In both, growth is anemic and adaptation to global change is incomplete,” he notes. “But where German infrastructure is crumbling, France has gleaming trains à grandes vitesses. Where Germany’s debts and deficits are strikingly low, France’s are enormous, and doubts about the ability of the political system to shrink them cast a long shadow over France’s financial stability.”

Staci Warden, the CEO of the Algorand Foundation, musters a strong defense of the social value of cryptocurrencies in the teeth of a slew of scandals. “Crypto’s early cypherpunk ideal of a parallel, decentralized monetary order wholly outside government control has come crashing down around it, alongside the hacks and scams the ecosystem has suffered over its short life,” she acknowledges. “But despite its worst excesses, I believe that crypto and the blockchain technology powering it should be actively embraced by Washington.”

Diane Ty and Andrew Friedson of the Milken Institute warn of the slow-motion crisis in geriatric health care. “The facts on the ground are clear,” they write. “The population of over-65s is surging, the growth in geriatriccapable care professionals is lagging, and unpaid – often undertrained – caregivers are being crushed by responsibilities they did not plan for but cannot avoid.”

Solutions are far from clear, though. “The first strategy is to invest in increasing individual ‘health spans,’ the portion of peoples’ lives that consists of healthy (or at least independent) years,” they argue. “Delaying the chronic illnesses of old age or avoiding them altogether would alleviate tremendous strains on both providers and family caregivers,” they conclude.

Economists Ryan Cummings (Stanford), Ben Harris (Brookings) and Neale Mahoney (Stanford) untangle the puzzle of why many Americans were convinced before the election that the economy was a mess even though “unemployment was at a near-record low, the stock market was booming, the economy was expanding nicely and inflation had retreated to normal levels.”

They have reason to fear: “The paradox not only describes a divergence between the economy and consumer sentiment, but portends a broader slide into pessimism. It’s tough to pinpoint the culprit, though it does seem that Americans are becoming less content with their lives.”

Gabriela Goodman, Emma Phillips and Tara Watson of the Brookings Institution compare the quality of the states’ safety nets, as well as the role of the federal government in tilting aid toward the poorest. “Blue states generally provide more state-directed benefits than red states do,” they confirm, with the latter depending on federal aid to sharply narrow the gap.

“This levelling role of federal payments leads to a paradox,” they note. Elected representatives of red states talk the talk of rugged individualism yet defend discrimination of federal benefit formulas in their favor. Meanwhile, blue states, which admire the generosity of European social democracies, get the short end of the federal benefits stick.

Doug Irwin (Dartmouth College) and Petros Mavroidis (Columbia University Law School) recount the decline of the once-celebrated World Trade Organization and ask whether a comeback is desirable – or possible. “With Trump again in the White House, the outlook for the WTO (which was hardly good under Biden) is dire,” they write. “If the WTO is put out of its misery, countries seeking trade order will have to do so on a plurilateral basis. And with no overarching system in place, stable rules for trade would have to be hammered out among competing trade blocs.”

Last but hardly least, we offer a peek at Paul Blustein’s new book, King Dollar. Here, we excerpt his account of the Federal Reserve’s surprisingly close brushes with disaster in the era of Covid-19 and the post-Covid outbreak of inflation. Of particular note: the collateral damage to other economies dependent on the stability of the greenback. “For now,” Blustein writes, “there is no viable alternative [to the global dollar standard] besides resignation to the fact that the Fed is a ‘monetary superpower,’ and foreign economic policymakers would be well advised to adapt accordingly.”

Happy perusing. — Peter Passell