Distinguished economists propose to return private capital to housing finance, in the latest Milken Institute Review

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Distinguished economists propose to return private capital to housing finance, in the latest Milken Institute Review

LOS ANGELES -- Ellen Seidman (Urban Institute), Phillip Swagel (Milken Institute), Sarah Rosen Wartell (Urban Institute) and Mark Zandi (Moody's Analytics) offer a sweeping plan for rebooting America's housing finance system in the new issue of The Milken Institute Review.

"Our proposal would keep a federal backstop in place, but limit taxpayer risk by putting investors' capital in a first-loss position," the authors write. "We would retain several roles for the feds, including insuring the system against catastrophe, standardizing mortgage securitization and only subsidizing homeownership in visible and easily understood ways."

Also in this issue:

Barry Eichengreen, an economist at UC Berkeley, takes a hard look at Abenomics, Japanese Prime Minister Shinzo Abe's go-for-broke program to jolt the Japanese economy from its two-decade slumber. "Measures to stimulate demand won't do much without corresponding measures to free up supply," he concludes. "But, in the same spirit, difficult restructuring will be far easier to swallow when combined with fiscal and monetary measures to boost spending."

Frank Rose, a consultant on digital media, explains why conventional TV programming and the vast infrastructure for delivering it may follow print media down the road to obsolescence. "We are rapidly moving from a period of mass production, mass consumption and (at its height in the 1950s) mass conformity to an era of networked production, unbundled consumption and personalization of just about everything," Rose writes. "Yet media companies of every stripe have largely behaved as if they were sheltered from Joseph Schumpeter's 'perennial gale of creative destruction.'"

Sean Turnell, an economist at Macquirie University in Australia, maps newly awakened Burma's path to the integration with global community. "Yes, Burma is rich with natural resources, fertile land and untapped human potential," he writes. "But it is also burdened by deep racial/religious tensions, an ethically challenged ruling class and a business elite reluctant to level the playing field -- which in combination could yet bring Burma's reform journey to a halt."

Larry Fisher, a former New York Times reporter, analyzes what has to happen to realize the bounty from what's being called personalized medicine. "Unlike so much gee-whiz medical technology, PM promises to improve patient outcomes without raising total costs. Delivery on the promise will fall short, though, without substantive changes in regulation and reimbursement practices, changes in the ground rules that acknowledge the critical new role played by diagnostics."

Larry Kerr, a former minister-counselor for economic affairs at the U.S. Embassy in Mexico City, argues that country finally has a real shot at delivering on its enormous promise. "Mexico has been said to be on the cusp of great things ever since the mid-1980s, when the collapse of the peso forced the Institutional Revolutionary Party to begin opening the economy to global market forces," he writes. "Now the party that engineered Mexico's political and economic stasis has come full circle. What's yet to be determined is whether this new and improved version of the ancien regime can deliver."

Paul Rivlin, an economist at Tel Aviv University, outlines the depths to which the Palestinian economy has fallen. "Yet it has significant potential to grow rapidly, to tap an underemployed work force, to generate a living standard superior to that of other Arab states that don't happen to sit on top of oceans of oil," he concludes. "Peace with Israel is the key to progress. But the obstacles to a territorial settlement, which seemed so tantalizingly close in the 1990s, remain dauntingly elusive."

Published April 8, 2019