LOS ANGELES — With 106 bills to address climate change before the 110th Congress, it is clear that global warming has moved out of the dusty drawers of environmental activists and into the spotlight of policymaking. But according to Ricardo Bayon, director of the Ecosystem Marketplace, money still makes the world go round.
"The U.S. response is bound to be influenced by the gathering army of consultants, traders and investment bankers, who figure there is money to be made from the solution," he writes in the latest issue of the Milken Institute Review. "And that is probably a good thing. Adding the profit motive to the equation will almost certainly drive the politics toward a fix in which markets will play a leading role."
Also in this issue, Boston University′s Kevin Lang turns the conventional economic wisdom about teen pregnancy on its head. Not for the ideologically entrenched, the article outlines the statistical evidence suggesting that neither mothers nor their offspring are typically worse off when poor teenagers fail to delay pregnancy until adulthood.
"The unintuitive finding is more than a tool for trumping righteous social conservatives and smug liberals at (presumably separate) dinner parties," he writes. "Teenage motherhood is, indeed, an integral part of America′s culture of poverty. But the research implies that the way to reduce both teenage motherhood and teenage poverty is to increase the economic incentives to wait."
Other highlights from the new Review:
- Uwe Reinhardt of Princeton University offers perspective on the debate over single-payer national health insurance, comparing the cultural differences in the ways Canada and the United States decide who gets which medical services. "In the end, each nation must decide which style of rationing — by the queue or by price and ability to pay — is most compatible with its culture. Mantras about the virtues of markets are no substitute for serious ethical conviction."
- Sheldon and Sandra Danziger, both from the University of Michigan, look at the holes in America′s fraying social safety net, which are most apparent when it is tested by exceptional events. "Little attention has been given to the exhaustion of unemployment insurance, the loss of employer-provided medical coverage or the problems of those who cannot find work and do not receive cash assistance — all of which affect the poor of all races and ethnicities across the nation, but pile hardship upon hardship on those displaced by natural disasters like Katrina."
- G. Pascal Zachary, a former Wall Street Journal reporter, does an end-run on Africa-apathy with a free-market approach to fixing the economic and political woes of sub-Saharan Africa. "The general reluctance to put failed states into what amounts to bankruptcy proceedings and incorporate them into more effective neighboring states rather than supporting phony revivals with international money, is certainly understandable," he writes. "Yet, as a practical matter, the donors who pay 50 cents of every dollar spent by most sub-Saharan governments already play God. They are choosing, by their actions, to maintain the miserable status quo."
- Daniel Griswold, director of the Cato Institute′s Center for Trade Policy Studies, takes a dim view of the mare′s nest of subsidies and trade barriers that Balkanize global rice production. "Consumers in countries with protected markets pay as much as four times the world price for rice. Taxpayers in wealthier countries pay billions of dollars more to support resident rice farmers and to distort global production with subsidized exports. And tens of millions of rice farmers in poor countries find it harder to lift their families out of poverty because of the lower, more volatile prices created by these market interventions."
- Martha Amram, Teresa Magula and Glenn Yago of the Milken Institute present the results of two day-long financial innovation labs that brought together a wide range of experts to brainstorm on ways to jumpstart lagging early-stage R&D for pharmaceuticals. The article is an excerpt of a report recently released by the Milken Institute.
Not to be overlooked in this issue: a candid interview of Milton Friedman, conducted by Stanford economic heavyweight John B. Taylor in May 2000; demographer William Frey′s analysis of where the baby boomers are headed; this quarter′s "Lists" exploring the consequences of the private health insurance gap.
The Milken Institute Review is sent quarterly to the world′s leading business and financial executives, senior policy makers and journalists. Its editor is Peter Passell, former economics columnist for The New York Times.