INTRODUCTION

The Obama administration needs to focus on executing its existing financial rescue plans, keep the TARP focused on the banking sector, and create a contingency plan should the banking system destabilize again.

Crystal balls are dangerous, especially when it comes to economic predictions, which is why it is important for the administration to chart a path forward. Public policy must remain focused on the very real possibility that the apparent easing in the economy’s decline may be followed by little or no growth for several quarters and there could possibly be another negative turn. One of the risks is that the United States is very connected to the rest of the world, most of which is in severe recession. The global economy could be a significant drag on U.S. growth.

Cautious optimism should be the order of the day. We fear that the recent reactions of the financial markets and of some analysts carry too much of the optimism without recognizing enough of the uncertainty. There remains a lot of uncertainty and policymakers should not rest on their laurels or turn to other policies, even if they look more exciting. It is vital to follow through on the current financial rescue plans and to have well-conceived contingency plans in case there is another dip down.

We propose three recommendations for the financial rescue plans:

• Focus on execution of existing programs. The Administration has created programs to deal with each of the key elements necessary to solve the financial crisis. All of them have significant steps remaining and some of them have not even started yet, such as the programs to deal with toxic assets. As has been demonstrated multiple times now since October 2008, these are complex programs that require a great deal of attention. It is time to execute rather than to create still more efforts.
• Resist the temptation to allocate money from the TARP to other uses—it is essential to maintain a reserve of Congressionally-authorized funds in case they are needed for the banks. It would be difficult to overemphasize the remaining uncertainties about bank solvency as they navigate what will remain a rough year or more. The banks could easily need another $300 billion of equity capital and might need still more. It is essential that the administration have the ammunition readily available.
• Third, make sure there is a contingency plan to deal with a major setback for the banking system. The plan needs broad support within the administration and among regulators and, ideally, from key congressional leaders. We probably won’t need it, but there is too high a chance that we will require it for us to remain without one. The country cannot afford even the appearance of the ad hoc and changing nature of the responses that were evident last fall.

We also give the administration a thumbs-up for their bank recapitalization as well as the TALF program, while they are much more skeptical of the Treasury’s approaches to toxic assets. The authors also believe it is time to focus on the truly mind-blowing budget deficits given the danger that markets will not be able to absorb the amount of government borrowing needed without triggering a rise in U.S. interest rates and perhaps an unstable decline in the value of the dollar, nor do they believe there should be a another fiscal stimulus except under extreme circumstances.

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Paris and Rome may be famous for romance, but it’s Filipinos who get the most love. That, at least, is a conclusion that can be drawn from a global love survey conducted by the Gallup Organization.

In our latest column for Bloomberg View, we mine the unique Gallup data for insights into the nature of love and its relationship to nationality, age, money and economic development. The survey, conducted in 136 countries, posed the question: “Did you experience love for a lot of the day yesterday?”

In honor of Valentine’s Day, we thought readers might be interested in seeing the full ranking. So here goes. The first number after each country name is the percentage of respondents who said they had experienced love the previous day. The second (in parentheses) is the sample size for the country.

1. Philippines 93% (2193)
2. Rwanda 92% (1495)
3. Puerto Rico 90% (495)
4. Hungary 89% (1002)
5. Cyprus 88% (988)
6. Trinidad and Tobago 88% (506)
7. Paraguay 87% (1986)
8. Lebanon 86% (970)
9. Costa Rica 85% (1985)
10. Cambodia 85% (1961)
11. Nigeria 84% (1965)
12. Guyana 83% (486)
13. Spain 83% (998)
14. Mexico 82% (989)
15. Tanzania 82% (1941)
16. Ecuador 82% (2126)
17. Jamaica 82% (534)
18. Venezuela 82% (997)
19. Cuba 82% (978)
20. Brazil 82% (1038)
21. Laos 81% (1947)
22. Argentina 81% (1985)
23. Belgium 81% (1015)
24. Canada 81% (1006)
25. Greece 81% (996)
26. U.S. 81% (1224)
27. Denmark 80% (1003)
28. Portugal 80% (995)
29. Netherlands 80% (993)
30. Vietnam 79% (1901)
31. New Zealand 79% (1775)
32. Italy 79% (1000)
33. Colombia 79% (1994)
34. Madagascar 78% (998)
35. Uruguay 78% (1969)
36. Turkey 78% (985)
37. Dominican Republic 78% (1976)
38. United Arab Emirates 77% (961)
39. Saudi Arabia 77% (978)
40. Chile 76% (1982)
41. Malawi 76% (1997)
42. Ghana 76% (1986)
43. South Africa 76% (1968)
44. Australia 76% (1199)
45. Panama 75% (1995)
46. Zambia 74% (1971)
47. Kenya 74% (1965)
48. Namibia 74% (996)
49. Nicaragua 74% (1988)
50. Germany 74% (1214)
51. Ireland 74% (992)
52. Sweden 74% (993)
53. U.K. 74% (1200)
54. Switzerland 74% (986)
55. Montenegro 74% (800)
56. Austria 73% (984)
57. France 73% (1217)
58. Kuwait 73% (934)
59. Finland 73% (993)
60. El Salvador 73% (2000)
61. Pakistan 73% (2253)
62. Zimbabwe 72% (1989)
63. Honduras 72% (1947)
64. Peru 72% (1982)
65. Egypt 72% (1024)
66. Serbia 72% (1474)
67. Bosnia and Herzegovina 72% (1896)
68. Sierra Leone 71% (1986)
69. India 71% (3140)
70. Taiwan 71% (984)
71. Bangladesh 70% (2200)
72. Belize 70% (464)
73. Croatia 69% (958)
74. Macedonia 69% (1000)
75. Mozambique 69% (996)
76. Bolivia 69% (1948)
77. Liberia 68% (988)
78. Iran 68% (963)
79. China 68% (7206)
80. Slovenia 68% (1000)
81. Haiti 68% (471)
82. Norway 67% (992)
83. Sri Lanka 67% (1974)
84. Poland 67% (939)
85. Guatemala 67% (1988)
86. Uganda 66% (1961)
87. Sudan 66% (971)
88. Israel 66% (957)
89. Kosovo 65% (983)
90. Thailand 65% (2377)
91. Jordan 65% (998)
92. Albania 64% (855)
93. Guinea 62% (952)
94. Botswana 62% (999)
95. Angola 62% (957)
96. Burkina Faso 62% (1876)
97. Malaysia 61% (2115)
98. Mali 61% (984)
99. Niger 61% (1925)
100. Palestinian Territories 61% (991)
101. Romania 61% (937)
102. Senegal 61% (1805)
103. Indonesia 61% (2013)
104. Afghanistan 60% (1128)
105. Hong Kong 60% (789)
106. Cameroon 59% (1967)
107. Japan 59% (1138)
108. Nepal 59% (1965)
109. Bulgaria 59% (927)
110. Slovakia 58% (991)
111. Singapore 58% (3002)
112. Czech Republic 58% (992)
113. Mauritania 57% (1960)
114. Benin 56% (974)
115. South Korea 56% (2056)
116. Myanmar 55% (1047)
117. Latvia 54% (1942)
118. Togo 54% (988)
119. Estonia 53% (1800)
120. Lithuania 50% (1863)
121. Russia 50% (4667)
122. Chad 49% (1915)
123. Yemen 48% (959)
124. Ukraine 48% (1930)
125. Ethiopia 48% (1913)
126. Azerbaijan 47% (1824)
127. Tajikistan 47% (1847)
128. Moldova 46% (1937)
129. Kazakhstan 45% (1871)
130. Morocco 43% (1011)
131. Belarus 43% (1992)
132. Georgia 43% (1904)
133. Kyrgyzstan 34% (1969)
134. Mongolia 32% (928)
135. Uzbekistan 32% (962)
136. Armenia 29% (1954)

Note: This content was first published on Bloomberg View on February 13, 2013.

      

       

      

Can the United States and Russia actually cooperate in the Arctic? It might seem like wishful thinking, given that Russian Prime Minister Dmitry Medvedev asserted that there is in fact a “New Cold War” between the two countries in a speech at the Munich Security Conference. Many people—at that conference and elsewhere—see the idea as far-fetched. Sure, Russia is launching air strikes in what has become an all-out proxy war in Syria, continues to be aggressive against Ukraine, and has increased its military build-up in the High North. To many observers, the notion of cooperating with Russia in the Arctic was a non-starter as recently as the mid-2015. There have been, however, significant changes in Russia’s behavior in the last several months—so, maybe it is possible to bracket the Arctic out of the evolving confrontation.

These and other matters were the subject of discussion at a recent conference at the Harriman Institute of Columbia University in New York, in which we had the pleasure to partake last week.

Moscow learns its limitations

Russia steadily increased its military activities and deployments in the High North until autumn 2015, including by creating a new Arctic Joint Strategic Command. There have been, however, indirect but accumulating signs of a possible break from this trend. Instead of moving forward with building the Arctic brigades, Russian top brass now aim at reconstituting three divisions and a tank army headquarters at the “Western front” in Russia. News from the newly-reactivated airbases in Novaya Zemlya and other remote locations are primarily about workers’ protests due to non-payments and non-delivery of supplies. Snap exercises that used to be so worrisome for Finland and Norway are now conducted in the Southern military district, which faces acute security challenges. Russia’s new National Security Strategy approved by President Vladimir Putin on the last day of 2015 elaborates at length on the threat from NATO and the chaos of “color revolutions,” but says next to nothing about the Arctic.

The shift of attention away from the Arctic coincided with the launch of Russia’s military intervention in Syria, and was strengthened by the sharp conflict with Turkey. Deputy Prime Minister Dmitri Rogozin—who used to preside over the military build-up in the High North—is these days travelling to Baghdad, instead. Sustaining the Syrian intervention is a serious logistical challenge on its own—add low oil prices into the mix, which threw the Russian state budget and funding for major rearmament programs into disarray, and it’s clear that Russia is in trouble. 

The shift of attention away from the Arctic coincided with the launch of Russia’s military intervention in Syria, and was strengthened by the sharp conflict with Turkey.

The government is struggling with allocating painful cuts in cash flow, and many ambitious projects in the High North are apparently being curtailed. In the squabbles for dwindling resources, some in the Russian bureaucracy point to the high geopolitical stakes in the Arctic—but that argument has lost convincing power. The threats to Russian Arctic interests are in fact quite low, and its claim to expanding its control over the continental shelf (presented at the U.N. earlier this month) depends upon consent from its Arctic neighbors.

Let’s work together

Chances for cooperation in the Arctic are numerous, as we and our colleagues have described in previous studies. The current economic climate (i.e. falling oil prices, which makes additional energy resource extraction in most of the Arctic a distant-future scenario), geopolitical climate (sanctions on Russia targeting, amongst others, Arctic energy extraction), and budget constraints on both ends (Russia for obvious reasons, the United States because it chooses not to prioritize Arctic matters) urge us to prioritize realistically.

• Improving vessel emergency response mechanisms. Though many analysts like to focus on upcoming resource struggles in the Arctic, the chief concern of naval and coast guard forces there is actually increased tourism. Conditions are very harsh most of the year and can change dramatically and unexpectedly. Given the limited capacity of all Arctic states to navigate Arctic waters, a tourist vessel in distress is probably the main nightmare scenario for the short term. Increased cooperation to optimize search and rescue capabilities is one way to prepare as much as possible for such an undesirable event. 
• Additional research on climate change and methane leakage. Many questions remain regarding the changing climate, its effects on local flora and fauna, and long-term consequences for indigenous communities. Increasingly appreciated in the scientific community, an elephant in the room is trapped methane in permafrost layers. As the Arctic ice thaws, significant amounts of methane may be released into the atmosphere, further exacerbating global warming.
• Expanding oil emergency response preparedness. The current oil price slump likely put the brakes on most Arctic exploration in the short term. We also believe that, unless all long-term demand forecasts are false, an additional 15 million barrels of oil per day will be needed by 2035 or so—the Arctic is still viewed as one of the last frontiers where this precious resource may be found. At the moment, Arctic states are ill-prepared to deal with a future oil spill, and more has to be learned about, for instance, oil recovery on ice and in snow. The Agreement on Cooperation on Marine Oil Pollution Preparedness and Response in the Arctic was an important first step.
• Preparing Bering Strait for increased sea traffic. As the Arctic warms, increased sea traffic is only a matter of time. The Bering Strait, which is only 50 miles wide at its narrowest point, lacks basic communication infrastructure, sea lane designation, and other critical features. This marks another important and urgent area of cooperation between the United States and Russia, even if dialogue at the highest political level is constrained. 

Can the Arctic be siloed?

There is no doubt that the current cooled climate between Russia and the other Arctic states, in particular the United States, complicates an ongoing dialogue. It is even true that it may prohibit a meaningful conversation about certain issues that have already been discussed. 

Skeptics will argue that it is unrealistic to isolate the Arctic from the wider realm of international relations. Though we agree, we don’t think leaders should shy away from political dialogue altogether. To the contrary, in complicated political times, the stakes are even higher: Leaders should continue existing dialogues where possible and go the extra mile to preserve what can be preserved. Russia’s desire for expanding its control over the Arctic shelf is entirely legitimate—and opens promising opportunities for conversations on issues of concern for many states, including China, for that matter.

Realists in the United States prefer to focus on expanding American military capabilities, their prime argument being that Russia has significantly more capacity in the Arctic. While we would surely agree that America’s current Arctic capabilities are woefully poor, as our colleagues have described, an exclusive focus on that shortcoming may send the wrong signal. 

We would therefore argue in favor of a combined strategy: making additional investments in U.S. Arctic capabilities while doubling down on diplomatic efforts to preserve the U.S.-Russian dialogue in the Arctic. That may not be easy, but given the tremendous success of a constructive approach in the Arctic in recent years, this is something worth fighting for. Figuratively speaking, that is.

       

For the past several years, international affairs have been analyzed through two lenses. One lens has focused on geopolitics: in particular, the question of how great power relations are evolving at a time of redistribution in the world’s economic and now also political power. The second lens considers the framework of global governance, especially the question of whether or not the existing formal and informal institutions have the tools and the ability to manage complex global challenges.

China's presidency of the G-20 bridges the issues of global governance and great power relations. At a basic level, the G-20 will set a tone for how major powers attempt to tackle the challenges that confront us all.

China’s assumption of the G-20 chairmanship in 2016 marks an important symbolic threshold. It is the first time a major non-Western power will chair the world’s premier body for international economic cooperation—not to mention one of the world’s most important geopolitical bodies, as well. China’s presidency comes at an important time in the substance of the G-20’s agenda, too, as a slowing Chinese economy is integral to the dynamics of an overall slowing global economy. As such, this event offers an opportunity to reflect on geopolitics and global governance—and the way forward. In short, what is the state of international order? 

Heading down a bumpy road?

There is little doubt that we are at an important inflection point in international order. For the past 25 years, the international system—with its win-win economic structures—has been relatively stable. But this order is under challenge and threat, and it is eroding. We risk the rise of a lose-lose international system, encompassing a deterioration of the security relations between great powers, and a breakdown of the basic structures of international cooperation. 

That may be the worst-case scenario, but it is a plausible one. Countries must be vigilant about preventing this outcome. Even though the established powers and the so-called emerging powers (clearly China is an emerged power) may not hold the same views about the content of international order, all sides have a stake in pursuing intense negotiations and engaging in debate and dialogue. It is imperative that parties find a middle ground that preserves key elements of the existing order while introducing some degree of adaptation, such that this order does not collapse.

For the past 25 years, the international system—with its win-win economic structures—has been relatively stable. But this order is under challenge and threat, and it is eroding.

A version of this kind of negotiation may occur later this year. Japan’s presidency of the G-7 will begin just ahead of China's presidency of the G-20, putting important issues into sharp relief. As the older, Western-oriented tool for managing global issues, the G-7 still focuses on global economics but increasingly tackles cross-cutting and security issues. The G-20 is the newer, multipolar tool through which both emerged and emerging powers collaborate—but, so far, members have limited their deliberations to economic issues. The two processes together will reveal the tensions and opportunities for improvement in great power relations and in geopolitics. 

Of particular note is where political and security issues fall on the dockets of these two bodies. Although the G-20 did tackle the Syria crisis at its St. Petersburg meeting in 2013, political and security issues have otherwise not been part of the group’s agenda. But these topics form an important part of the landscape of great power politics and global governance, and they are issues for which we find ourselves in very difficult waters. Tensions between the West—particularly Europe—and Russia are running high, just as disputes are mounting in Northeast Asia. The question of America’s naval role in the Western Pacific and China’s claims of a nine-dash line are serious flash points in the U.S.-China relationship, and we should not pretend that they are not increasingly difficult to manage, because they clearly are.

I believe it is shortsighted for the G-20 not to take up some of these tense security issues.

These are not part of the formal agenda of the G-20, but they should be. Although many economists may disagree with me, I believe it is shortsighted for the G-20 not to take up some of these tense security issues. The group’s argument has been to focus on economic issues, for which there are shared interests and progress can be made, which is a fair point. But history tells us that having difficult, tense issues involving a number of stakeholders leads to one of two scenarios: either these issues are managed in a credible forum, or tensions escalate and grow into conflict. There is no third option. Moreover, these are not issues that can be resolved bilaterally. They have to be settled in a multilateral forum.

In 2016, Japan will take up the issue of the South China Sea in the G-7—a scenario that is far from ideal, since key stakeholders will not be present. Even so, the G-20 refuses to take up security issues, leaving countries without an inclusive forum to deal with these tense security concerns. Of course, they could be raised in the U.N. Security Council, but that is a crisis management tool. We should be building political relations and involving leaders in preventing great power conflict, all of which, by and large, does not happen at the U.N. But it could happen at the G-20. 

With great power comes great responsibility

A better dynamic is at work with respect to the issues of climate change and global energy policy. The Paris climate accords are counted as a major breakthrough in global governance. To understand how the outcome in Paris was achieved, we have to look again at great power relations. What really broke the logjam of stale and unproductive negotiations was the agreement struck between President Xi and President Obama. Their compact on short-lived climate pollutants transformed the global diplomacy around climate change, yielding the broader agreement in Paris.

[G]reat power status primarily entails a responsibility to act first in resolving tough global challenges and absorbing costs.

Why did the U.S.-China agreement on climate change facilitate the Paris climate accords? The United States and China did not impose a framework, nor did they insist on a particular process or stipulate a set of rules. What they did was lead. They acted first and they absorbed costs. This is the essence of the relationship between great power politics and global governance.

Great power status confers a certain set of privileges, not least of which is a certain degree of autonomy. To that end, the United States has avoided multilateral rules more than other countries, and other countries may aspire to that status. But the larger point is that great power status primarily entails a responsibility to act first in resolving tough global challenges and absorbing costs. That is how great powers lead through a framework of global governance. In today’s world, where global governance will necessarily be more multipolar than in the past, we have to find new approaches to sharing the burdens of moving first and absorbing costs. That is, far and away, the most likely way to maintain a relatively stable but continuously adapting international order—one that is empowered to tackle global challenges and soothe geopolitical tensions.

       

       

       

       

Editor's Note: This blog post is part of The Primaries Project series, where veteran political journalists Jill Lawrence and Walter Shapiro, along with scholars in Governance Studies and the Campaign Finance Institute, examine the congressional primaries and ask what they reveal about the future of each political party and the future of American politics.

A great deal of attention has been paid to the existence of independent expenditure groups and to the billionaires who fund them. The Koch brothers and Sheldon Adelson, right wing billionaires in politics, and Tom Steyer, the newest left wing billionaire in politics, seem to have had nearly as much ink spilled on them as have the candidates and causes they endorse.  And no wonder. Americans are fascinated and worried about the question Darrell West poses in the second chapter of his new book Billionaires, “Can rich dudes buy an election?”

Tracking the sources and amounts of money in post Citizens United elections is a full time and complex job. Our hats go off to the Campaign Finance Institute who has recently completed the most extensive study ever of the role of independent expenditures in primary elections. Michael Malbin, Founding Director of the Center and author of the upcoming report on this year’s primaries, shows us just how big these groups, often funded by billionaires, have gotten.  In research focusing on independent spending in the 2014 congressional primaries, Malbin points out that in the 15 House races with the most independent expenditure money ($500,000 +) these expenditures counted for 76% as much as the candidates own campaign money. In Senate races, the independent expenditures accounted for 44% as much as the candidates own money.  Even the candidates themselves are worried about this trend since it often seems that outside groups can swamp a candidate’s own message.

Malbin also shows us why it is so hard to figure out what’s going on in an individual election. Only 49 of the 281 organizations that were around in the 2012 cycle spending money on behalf of congressional primary candidates were also around in 2014. That means that there were 232 new and different groups playing in 2014, posing challenges for the journalists and academics trying to track them.

The Campaign Finance Institute, however, has data on all these organizations from 2012 and 2014.  They have categorized them by ideology and, as the following chart shows, there are some interesting developments. For instance, while conservative independent expenditure groups remain the biggest spenders in the 2014 congressional primaries, their overall proportion of independent expenditures is down from 2012.  That year, conservative groups spent $40.5 million, nearly three quarters of total independent expenditures, compared to $9.3 million or 17 percent of total expenditures for Democrats.  In 2014, conservative groups upped their spending to $56.8 million, but their overall share of independent expenditures fell to 68% as liberal groups doubled their spending and increased their percentage of the total to 23%.

Even more surprising is the change in spending patterns within the Republican Party. As the following table shows, this really was the year when the establishment fought back. In 2012 anti-establishment spending by independent expenditure groups in congressional primaries constituted 59% of all such expenditures while spending by independent expenditure groups on behalf of establishment Republicans was only 36% of the total.  In two years, those numbers flipped.  In 2014, with control of the Senate at stake, the establishment mobilized independent expenditure groups which spent 55% of all the money spent by such groups while the anti-establishment groups spent only 37%.

 

There’s something for everyone in these findings. For the Democrats who have been on the defensive for much of this year but who have gotten through a primary season with few internal divisions, the increase in spending on their behalf and the sense that they will be able to run a good ground game in the key states where it really counts is a plus.

For the Republicans, the heavy spending by establishment groups has paid off in that they haven’t let weak candidates slip into the general election contest. They are probably as strong as they can be going into the fall campaign.

Nonetheless, tracking the money in this new election environment is a complex and full time job. And Darrell West’s question still hangs over us—“Can rich dudes buy an election?”

      

Earlier this month, Missouri voters overwhelmingly rejected a 10-year, 3/4 cent sales tax increase to boost statewide transportation investment. With local referendums an increasingly popular method to raise transportation funding in an era of federal uncertainty, the result has lessons for Missouri’s transportation interests and the country as a whole.

Like many states, Missouri has a clear infrastructure deficit. A legislatively-mandated citizens committee found the state needs an additional $600 million to $1 billion in investment per year. The problem is finding the money. Outside of federal funds, the state primarily relies on a 17.3 cent gasoline tax and local property taxes to fund transportation projects, plus location-specific revenue streams like a half-cent sales tax in St. Louis city and county. Yet with Missouri residents driving less in recent years—down 5 percent per capita between 2000 and 2012-—there is less money available to fund critical projects.

This vote offered one remedy. The statewide bump in sales tax would’ve generated upwards of $5 billion over the ten-year period. The new monies would go to 800 projects across Missouri, primarily for roadways. The governance was a similarly unequal split, with the state department of transportation directly controlling all but 10 percent of the new revenue.

And this is where the referendum’s problems become clear. While each of the state’s seven transportation districts managed their own project list, there was no guarantee local sales taxes would be spent on local projects. There were also legitimate questions whether a heightened focus on roadways made sense in the face of falling statewide driving. This was at the heart of the opposition argument, led by Missourians for Better Transportation Solutions.

In many ways, the Missouri results reflect what happened in a failed 2012 Atlanta referendum. That transportation package contained a hodgepodge of road and rail projects, barely increased connectivity across the sprawling metro region and couldn’t align local interest groups. Much like Missouri, Atlanta has clear transportation needs—but voters sensed the current plan wouldn’t do enough to adequately improve their commutes and livability.

As Missouri’s transportation leaders regroup, they’d be wise to follow the “economy-first” lesson of successful referendums in places like Los Angeles, Denver and Oklahoma City. The common thread in all three was a great job proving the need for greater infrastructure investment. But as my colleagues outlined in a recent report, they also captured how transportation could support industrial growth and metro-wide economic health. Americans have proven time and again they’ll pay for transportation projects, but they want to know what they’re getting and how it will benefit their communities.

In this sense, I’m heartened by a recent Kansas City Star editorial related to their failed streetcar vote the same day. Even with a failed vote, the metro area still needs a better infrastructure network. The key is for public, private and civic leaders to continue working with the public to determine which transportation investments will best support regional economic growth for decades to come.

Ballot measures may fail, but they’ll always provide lessons to improve the plans that will pass.

       

       

On Monday, the White House Council of Economic Advisers (CEA) released a report examining the long-term decline in the share of prime-age men (aged 25 to 54) who are either working or actively looking for work. What economists call the labor force participation rate for this population decreased from 98 percent in 1954 to 88 percent today, the second largest decrease among OECD countries. This trend has raised concerns not only for its impact on economic growth, but also because it seems to track an increase in mortality over that time, particularly among white males, as economists Anne Case and Angus Deaton have found.

The CEA report documents a number of possible explanations for this trend, including increasing rates of women in the workforce, rising disability insurance claims, falling demand for less-skilled workers, and barriers to employment for those with criminal records.

The report’s national analysis alone, however, obscures tremendous variation across the United States in employment among this critical group.

According to data from the Census Bureau’s American Community Survey, in 2014, 81 percent of prime-age men nationwide were employed (this statistic differs from the labor force participation rate in that it omits those who are looking for, but not in, work). Yet among the nation’s 374 metropolitan areas for which data are available, that rate ranged from over 93 percent in the oil boomtown of Midland, TX, to just over 50 percent in Kings County in California’s Central Valley.

There are clear regional patterns to this important statistic. Many of the metro areas with the highest employment rates for prime-age men are smaller places located in the middle of the country, from the Upper Midwest, to energy-rich areas in Texas and the Plains states, to the Intermountain West. In several large, economically dynamic metro areas such as Denver, Houston, Minneapolis, San Jose, and Washington, D.C., rates of work among prime-age men are also very high.

Of much greater concern is the large number of metropolitan regions with very low rates of work among prime-age men. These include many small former industrial centers in states like Michigan, Indiana, and Ohio; areas of West Virginia and Louisiana that rely on declining-employment industries like mining; and long-struggling agricultural economies in Arkansas, Texas, and inland California.

These patterns echo findings from the CEA report that falling demand for labor is an important part of the long-term decline in prime-age male employment. In many places where a high school diploma alone once provided the gateway to a middle-class job, nearly one-third of men in this age group are out of work. This is also evident in the local relationship between educational attainment and work—where educational attainment rates are higher among prime-age men, members of that group are more likely to be employed. A 10-percentage point difference in employment rates separates the most highly-educated quarter of metro areas from the least highly-educated quarter.

Beyond education, size seems to matter, too. Large metro areas exhibit higher rates of work among prime-age men than small metro areas. Across the 100 largest U.S. metro areas, 83.2 percent of prime-age males are employed, compared to 79.8 percent in the smaller 274 metro areas. This relationship partly reflects that men in large metro areas have higher rates of educational attainment than those in small metro areas. Yet even men who have no more than a high-school diploma work at higher rates in large metro areas (64 percent) than similarly educated men in smaller metro areas (62 percent). Larger regional economies with greater economic diversity may stimulate stronger demand for workers at lower skill levels.

Several of the policies that the CEA report recommends to improve prime-age male labor force participation, such as bolstering investment in public infrastructure, reforming unemployment insurance, and boosting educational attainment could help boost rates of work in lagging U.S. metro areas. However, none directly addresses the fact that problems in male employment disproportionately affect small and often economically isolated U.S. regions. This evidence suggests that policies to help dislocated workers relocate to larger, more economically dynamic metro areas—particularly by improving the supply of affordable housing in those regions—should be part of a comprehensive strategy to help reverse the troubling long-term decline in men’s work.

      

       

During his presentation at the University of Michigan/Urban Land Institute Real Estate Forum, Christopher B. Leinberger discusses the impact walkable urbane places has and will have on metropolitan development patterns, the market reasons for this change and how to strategically manage it.

This video is no longer available

      

       

       

Paris and Rome may be famous for romance, but it’s Filipinos who get the most love. That, at least, is a conclusion that can be drawn from a global love survey conducted by the Gallup Organization.

In our latest column for Bloomberg View, we mine the unique Gallup data for insights into the nature of love and its relationship to nationality, age, money and economic development. The survey, conducted in 136 countries, posed the question: “Did you experience love for a lot of the day yesterday?”

In honor of Valentine’s Day, we thought readers might be interested in seeing the full ranking. So here goes. The first number after each country name is the percentage of respondents who said they had experienced love the previous day. The second (in parentheses) is the sample size for the country.

1. Philippines 93% (2193)
2. Rwanda 92% (1495)
3. Puerto Rico 90% (495)
4. Hungary 89% (1002)
5. Cyprus 88% (988)
6. Trinidad and Tobago 88% (506)
7. Paraguay 87% (1986)
8. Lebanon 86% (970)
9. Costa Rica 85% (1985)
10. Cambodia 85% (1961)
11. Nigeria 84% (1965)
12. Guyana 83% (486)
13. Spain 83% (998)
14. Mexico 82% (989)
15. Tanzania 82% (1941)
16. Ecuador 82% (2126)
17. Jamaica 82% (534)
18. Venezuela 82% (997)
19. Cuba 82% (978)
20. Brazil 82% (1038)
21. Laos 81% (1947)
22. Argentina 81% (1985)
23. Belgium 81% (1015)
24. Canada 81% (1006)
25. Greece 81% (996)
26. U.S. 81% (1224)
27. Denmark 80% (1003)
28. Portugal 80% (995)
29. Netherlands 80% (993)
30. Vietnam 79% (1901)
31. New Zealand 79% (1775)
32. Italy 79% (1000)
33. Colombia 79% (1994)
34. Madagascar 78% (998)
35. Uruguay 78% (1969)
36. Turkey 78% (985)
37. Dominican Republic 78% (1976)
38. United Arab Emirates 77% (961)
39. Saudi Arabia 77% (978)
40. Chile 76% (1982)
41. Malawi 76% (1997)
42. Ghana 76% (1986)
43. South Africa 76% (1968)
44. Australia 76% (1199)
45. Panama 75% (1995)
46. Zambia 74% (1971)
47. Kenya 74% (1965)
48. Namibia 74% (996)
49. Nicaragua 74% (1988)
50. Germany 74% (1214)
51. Ireland 74% (992)
52. Sweden 74% (993)
53. U.K. 74% (1200)
54. Switzerland 74% (986)
55. Montenegro 74% (800)
56. Austria 73% (984)
57. France 73% (1217)
58. Kuwait 73% (934)
59. Finland 73% (993)
60. El Salvador 73% (2000)
61. Pakistan 73% (2253)
62. Zimbabwe 72% (1989)
63. Honduras 72% (1947)
64. Peru 72% (1982)
65. Egypt 72% (1024)
66. Serbia 72% (1474)
67. Bosnia and Herzegovina 72% (1896)
68. Sierra Leone 71% (1986)
69. India 71% (3140)
70. Taiwan 71% (984)
71. Bangladesh 70% (2200)
72. Belize 70% (464)
73. Croatia 69% (958)
74. Macedonia 69% (1000)
75. Mozambique 69% (996)
76. Bolivia 69% (1948)
77. Liberia 68% (988)
78. Iran 68% (963)
79. China 68% (7206)
80. Slovenia 68% (1000)
81. Haiti 68% (471)
82. Norway 67% (992)
83. Sri Lanka 67% (1974)
84. Poland 67% (939)
85. Guatemala 67% (1988)
86. Uganda 66% (1961)
87. Sudan 66% (971)
88. Israel 66% (957)
89. Kosovo 65% (983)
90. Thailand 65% (2377)
91. Jordan 65% (998)
92. Albania 64% (855)
93. Guinea 62% (952)
94. Botswana 62% (999)
95. Angola 62% (957)
96. Burkina Faso 62% (1876)
97. Malaysia 61% (2115)
98. Mali 61% (984)
99. Niger 61% (1925)
100. Palestinian Territories 61% (991)
101. Romania 61% (937)
102. Senegal 61% (1805)
103. Indonesia 61% (2013)
104. Afghanistan 60% (1128)
105. Hong Kong 60% (789)
106. Cameroon 59% (1967)
107. Japan 59% (1138)
108. Nepal 59% (1965)
109. Bulgaria 59% (927)
110. Slovakia 58% (991)
111. Singapore 58% (3002)
112. Czech Republic 58% (992)
113. Mauritania 57% (1960)
114. Benin 56% (974)
115. South Korea 56% (2056)
116. Myanmar 55% (1047)
117. Latvia 54% (1942)
118. Togo 54% (988)
119. Estonia 53% (1800)
120. Lithuania 50% (1863)
121. Russia 50% (4667)
122. Chad 49% (1915)
123. Yemen 48% (959)
124. Ukraine 48% (1930)
125. Ethiopia 48% (1913)
126. Azerbaijan 47% (1824)
127. Tajikistan 47% (1847)
128. Moldova 46% (1937)
129. Kazakhstan 45% (1871)
130. Morocco 43% (1011)
131. Belarus 43% (1992)
132. Georgia 43% (1904)
133. Kyrgyzstan 34% (1969)
134. Mongolia 32% (928)
135. Uzbekistan 32% (962)
136. Armenia 29% (1954)

Note: This content was first published on Bloomberg View on February 13, 2013.

      

INTRODUCTION—

Achieving universal education is a twofold challenge: to get children and youth into school and then to teach them something meaningful while they are there. While important progress has been made on the first challenge, there is a crisis unfolding in relation to learning. Around the world, there have been major gains in primary school enrollment partly due to the United Nations’ Millennium Development Goals and the abolition of school fees by many national governments. However in many countries, students are spending years in school without learning core competencies, such as reading and writing. To address this learning crisis, the global community and national governments need to place a much greater focus on the ultimate objective of education—to acquire knowledge and develop skills.

This shift in focus away from just enrollment to enrollment plus quality learning requires measuring learning outcomes. However, the global education community is not yet systematically using effective instruments for measuring primary school learning in low- and middle-income countries. This policy brief reviews the global efforts among the primary donors to support the measurement of learning outcomes. It then suggests steps needed to transition global education policy into a new paradigm of enrollment plus quality learning, which includes: scaling up the implementation of national education accounts and national assessment systems; increasing attention to monitoring early learning during child development to improve readiness for school; and expanding the systematic use of simple assessments of basic cognitive functions in the early grades to help teachers improve their practice.

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• Read the full paper

      

For more than a decade, the economy’s rate of productivity growth has been dismal, which is bad news for workers since their incomes rise slowly or not at all when this is the case. Economists have struggled to understand why American productivity has been so weak. After all, with all the information technology innovations that make our lives easier like iPhones, Google, and Uber, why hasn’t our country been able to work more productively, giving us either more leisure time, or allowed us to get more done at work and paid more in return?

One answer often given is that the government statisticians must be measuring something wrong – notably, the benefits of Google and all the free stuff we can now access on our phones, tablets and computers. Perhaps government statisticians just couldn’t figure out how to include those new services in a meaningful way into the data?

A new research paper by Fed economists throws cold water on that idea. They think that free stuff like Facebook should not be counted in GDP, or in measures of productivity, because consumers do not pay for these services directly; the costs of providing them are paid for by advertisers. The authors point out that free services paid for by advertising are not new; for example, when television broadcasting was introduced it was provided free to households and much of it still is.

The Fed economists argue that free services like Google are a form of “consumer surplus,” defined as the value consumers place on the things they buy that is over and above the price they have paid. Consumer surplus has never been included in past measures of GDP or productivity, they point out. Economist Robert Gordon, who commented on the Fed paper at the conference where it was presented, argued that even if consumer surplus were to be counted, most of the free stuff such as search engines, e-commerce, airport check-in kiosks and the like was already available by 2004, and hence would not explain the productivity growth slowdown that occurred around that time.

The Fed economists also point out that the slowdown in productivity growth is a very big deal. If the rate of growth achieved from 1995 to 2004 had continued for another decade, GDP would have been $3 trillion higher, the authors calculate. And the United States is not alone in facing weak productivity; it is a problem for all developed economies. It is hard to believe that such a large problem faced by so many countries could be explained by errors in the way GDP and productivity are measured.

Even though I agree with the Fed authors that the growth slowdown is real, there are potentially serious measurement problems for the economy that predate the 2004 slowdown.

Health care is the most important example. It amounts to around 19% of GDP and in the official accounts there has been no productivity growth at all in this sector over many, many years. In part that may reflect inefficiencies in health care delivery, but no one can doubt that the quality of care has increased. New diagnostic and scanning technologies, new surgical procedures, and new drugs have transformed how patients are treated and yet none of these advances has been counted in measured productivity data. The pace of medical progress probably was just as fast in the past as it is now, so this measurement problem does not explain the slowdown. Nevertheless, trying to obtain better measures of health care productivity is an urgent task. The fault is not with the government’s statisticians, who do a tremendous job with very limited resources. The fault lies with those in Congress who undervalue good economic statistics.

Gordon, in his influential new book The Rise and Fall of American Growth, argues that the American engine of innovation has largely run its course. The big and important innovations are behind us and future productivity growth will be slow. My own view is that the digital revolution has not nearly reached an end, and advances in materials science and biotechnology promise important innovations to come. Productivity growth seems to go in waves and is impossible to forecast, so it is hard to say for sure if Gordon is wrong, but I think he is.

Fortune reported in June 2015 that 70% of its top 500 CEOs listed rapid technological change as their biggest challenge. I am confident that companies will figure out the technology challenge, and productivity growth will get back on track, hopefully sooner rather than later.

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Editor’s note: This piece originally appeared in Fortune.