Governance

The Fed will have little room to respond if it overdoes things and the economy goes into recession. Sometimes the hardest and most important decisions in government involve doing less rather than more. 
 

I have just come across an International Monetary Fund working paper on income polarization in the United States that makes an important contribution to the secular stagnation debate. The authors — Ali Alichi, Kory Kantenga and Juan Solé — use standard econometric techniques to estimate the impact of declines in middle class incomes on total consumer spending. They find that polarization has reduced consumer spending by more than 3 percent or about $400 billion annually. If these findings stand up to scrutiny, they deserve to have a policy impact.

An interview with MEI Faculty Affiliate Asim Khwaja on his work at the Center for International Development's Evidence for Policy Design (EPoD) program with the Saudi Ministry of Labor on labor market policy as well as EPoD's Smart Policy Design and Implementation methodology and implications for the future of informed, iterative policymaking.

Corporations have been attacked from both right and left during the 2016 presidential election: on trade, on immigration, on campaign finance, on crony capitalism, on inequality. Fortune Editor and long-time political reporter Alan Murray says business-government relations in the U.S. are “easily the worst in the three decades I’ve covered them.” But the current across-the-spectrum, anti-corporate distemper and distrust is a global trend as reflected in the Brexit vote which overrode consensus concerns about injury to both UK and non-UK business.

In the global revulsion at the recent terror attacks in four Muslim countries, the United States and its allies have a new opportunity to build a unified command against the Islamic State and other extremists. FDP Senior Fellow David Ignatius examines the diplomatic relationships needed to create an effective counterterrorism strategy.

Walk from the US Airways shuttle at New York’s LaGuardia Airport to ground transportation. For months, there has been a sign saying “New escalator coming in Spring 2015.” The Charles River at a key point separating Boston and Cambridge is little more than 100 yards wide. Yet traffic has been diverted for over two years because of the repair of a major bridge and work is expected to continue into 2016.

Time magazine’s Feb. 4, 2013 international edition published an extensive excerpt from the new book, Lee Kuan Yew: The Grand Master’s Insights on China, the United States, and the World (MIT Press, Feb. 1, 2013), by Graham Allison and Robert D. Blackwill, with Ali Wyne. The book draws on their in-depth interviews with Lee and his voluminous writings and speeches. The excerpt in Time distills Lee’s strategic insights about the future of China.

"Poverty and unemployment are significant even though, like the Chinese, the Vietnamese have managed to cut abject poverty significantly. Wages remain shockingly low. Censorship is rife and Facebook is banned. According to the Committee to Protect Journalists (U.S.) before the 2011 Communist Party Congress meetings, Internet cafes and blogs were closely watched; dozens of activists and bloggers were arrested for "spreading propaganda against the state." The government dismantled websites, and a number of journalists remain in jail."

"The ever more conservative Republicans want to slash government programs (and the increased coverage) over the dead bodies of the Democrats. And the Democrats want to constrain insurance premiums and profit-maximizing in the private sector over the dead bodies of the Republicans. A bipartisan attempt to find the right combination of systemic productivity gains, meaningful competition and appropriate budgeting has receded far over the horizon."