A clamor is rising against "short termism"—judging a company by its performance over the past quarter, rather than the past few years. BlackRock CEO Laurence Fink and Delaware Supreme Court Chief Justice Leo Strine, for example, recently joined the Business Roundtable and others in decrying the strong pressures for short-term results exerted by daily stock traders and activist hedge funds. Critics claim that these pressures prevent executives from making long-term investments needed for sustainable corporate growth.

There are pressures on and incentives for corporate leaders to put the short term ahead of the long term, but not necessarily from activist hedge funds or stock trading. And some proposed remedies for short-termism would undermine the economic interests of shareholders.

The current attack on short termism is premised on the sharp increase in the average daily trading volume of stocks over the past few decades. The primary cause has been a relatively small group of day traders, including the notorious high-frequency traders who buy millions of shares and sell them a millisecond later. These traders care not a whit about corporate fundamentals or business plans; they are trying to exploit slight pricing anomalies that arise because of technical differences in securities markets. Thus corporate executives should not be pressured by higher daily trading volumes to avoid good long-term investment spending.

Critics of short-termism are even more alarmed about activist hedge funds that may lobby corporations to pay higher dividends, for example, or sell unprofitable divisions. They claim these funds push for a quick boost in corporate earnings in order to sell their shares for a quick profit.

The data do not support this uniformly negative view. Activist hedge funds display a broad array of strategies and time horizons. On average, they hold a company's stock for one or two years, according to various empirical studies. Yet according to a recent McKinsey study of 400 activist campaigns over the past decade, the median campaign was launched when the company was on the decline and led to higher shareholder returns relative to peers for at least three years.

To win proxy contests, activist hedge funds must persuade other shareholders to support the changes they advocate. The funds usually hold a relatively small percentage of a company's shares; the overwhelming majority are owned by institutional investors such as mutual funds and pension plans.

Activist hedge funds have won roughly half of the proxy contests they've entered, as institutional investors have carefully distinguished among long-term plans depending on a company's specific circumstances. These institutions backed activist campaigns to increase dividends at companies like Apple with huge hoards of cash. But they've also supported multi-year research programs of biotech firms like Amgen that have shown they can deliver.

To thwart the perceived threats of short-termism, critics have proposed measures that would reduce the legal rights and economic interests of all shareholders. Martin Lipton, a prominent opponent of activist hedge funds, has recommended that U.S. corporate law adopt a new norm—that corporate directors be elected to five-year terms, rather than the usual one-year term. Such long tenure, combined with existing anti-takeover defenses, would effectively insulate the leadership of chronically under-performing companies.

There is a better approach: Boards should measure and reward the efforts of corporate executives and portfolio managers by looking at the organization's performance over the past three years. At present, most firms distribute cash bonuses and stock grants on the basis of the prior year's results. This approach does encourage top executives to favor short-term results over long-term growth.

At the same time, the top executives at both public companies and asset managers should be required to retain for three to five years half of the shares they receive through stock grants and options. At present, these people can usually sell all their shares as soon as they vest or the options are exercised. This is an inducement for top executives and managers to push up the company's stock price for a few months so they can sell at a temporary high.

While there are reasonable concerns about corporate short-termism, their remedies should be narrowly tailored. Most of these concerns can be addressed by adopting longer periods for executive compensation. But we should not overreact to day traders or hedge funds by dramatically reducing the legitimate rights and financial interests of all shareholders.

When the head of the world’s largest investment fund raises fundamental questions about U.S. corporations, we should all pay attention.

In a letter earlier this week to the Fortune 500 CEOs, BlackRock Chairman Larry Fink criticized the short-term orientation that he believes shapes too much of today’s corporate behavior. “It concerns us,” he declared, that “in the wake of the financial crisis, many companies have shied away from investing in the future growth of their companies. Too many have cut capital expenditure and even increased debt to boost dividends and increase share buybacks.” And he concluded, “When done for the wrong reasons and at the expense of capital investment, [returning cash to shareholders] can jeopardize a company’s ability to generate sustainable long-term returns.”

Fink is correct on all counts. In a new Brookings paper out today, University of Massachusetts economist William Lazonick states that the 454 companies listed continuously in the S&P 500 index between 2004 and 2013 used 51 percent of their earnings to buy back their own stock, almost all through purchases on the open market. An additional 35 percent went to dividends. “Buybacks represent a withdrawal of internally controlled finance that could be used to support investment in the company’s productive capabilities,” he said.

This is bad for the economy in two ways. As the growth of the U.S. workforce slows dramatically, economic growth will depend increasingly on improved productivity, must of which comes from raising capital investment per worker. Failing to make productivity-enhancing capital investments will doom our economy to a new normal of slow growth.

Many business leaders say that they are reluctant to make long-term investments without reasonable expectations of growing demand for their products. That brings us to the second way in which corporate short-termism is bad for the economy. Most consumer demand comes from wages. If employers refuse to share gains with their employees, growth in demand is bound to be anemic.

Although he clearly cares about his country, Fink is also acting as the steward of $4.8 trillion in investments. In an article published by McKinzie earlier this month, he warns that although the return of cash to shareholders is juicing equity markets right now, investors “will pay for it later when the ability to generate revenue in the long term dries up because of the lack of investment in the future.”

Unlike most other corporate leaders who express concerns about these developments, Fink is unwilling to rely on moral suasion alone. Because current incentives are so perverse, he argued, “It is hard for even the most dedicated CEO to buck this trend.” The constant pressure to produce quarterly results forces executives to go along—or risk losing their jobs. That pressure comes from investors who are, in Fink’s words, “renters, not owners, who are going to trade your stock as soon as they can pocket a quick gain.”

This logic leads BlackRock’s chairman to propose changing the tax code by lengthening to three years the the period needed to qualify for capital gains treatment while taxing trading gains at an even higher rate than ordinary income for investment held less than six months. To encourage truly patient capital, the capital gains rate would be stepped down to zero over a period of ten years.

Last June, Brookings senior fellow Elaine Kamarck and I published a paper laying out the rise of short-term thinking in U.S. corporations. We argued that this trend was bad for the economy, and we suggested policies that would at least slow it down and diminish its effects.

Since then, additional research on short-termism has emerged, and an increasing number of corporate leaders are expressing concern about the trajectory of U.S. firms. Last November, for example, the Boston Consulting Group documented a worrisome decline in the corporate activities and investments designed to discover and nurture future growth opportunities. This turn away from exploratory activities may not immediately affect investors, said the BCG report: in the short term, companies can maintain earnings and shareholder returns by “cutting costs, increasing dividends, and pursuing share buybacks.” (As Kamarck and I showed, this is what is happening across our economy.) But in the long run, BCG researchers found, firms that invest in exploration boost revenues and total returns far faster than do those who are content to exploit their existing lines of business and return most of their earnings to shareholders in the form of dividends and buybacks.

A few days ago, Laurence Fink, the chief executive of the world’s largest investment fund and a long-time foe of short-termism, sent a letter to the heads of S & P 500 companies and large European corporations. He noted that in the twelve months ending September 30 2015, buybacks had risen by 27 percent over the previous year, when buybacks already stood at record levels. “Today’s culture of quarterly earning hysteria,” he declared, is “totally contrary to the long-term approach we need.” And he warned corporate executives that in the absence of well-considered long-term plans for investment and growth, they would expose their firms “to the pressures on investors focused on maximizing near-term profit at the expense of long-term value.”

Many influential investors agree with Fink, and they are joining forces. On February 1, the Financial Times reported that since last summer, the world’s largest asset managers—Warren Buffett, Jamie Dimon, the chief executive of JPMorgan Chase, and the heads of BlackRock, Fidelity, Vanguard, and Capital Group, among others—have been holding secret meetings to frame proposals that would encourage longer-term investments while reducing friction with shareholders. These proposals, which are reportedly some months away from final agreement and publication, may well involve changes in boards of directors, executive compensation, and shareholder rights.

The summit participants plan to support these changes for the companies in which they invest. Given the pools of funds they control, which amount to many trillions of dollars, their coordinated action may well represent a turning-point in the struggle to reorient corporate strategy toward the long term.

Capitalism has provided unprecedented wealth and prosperity around the world, but a growing community is raising concerns about whether the promise of the capitalist system to achieve a more shared and durable prosperity can be achieved without systemic changes in the way for-profit corporations are governed and managed. The change in public opinion has become evident among workers, consumers, and investors, as well as through new policies enacted by elected officials of both parties: more than ever before, the public supports businesses that demonstrate positive social change and sustainable development. These new attitudes have begun to take root in corporations themselves, with a growing community of investors, business leaders, and entrepreneurs expressing a fiduciary duty to create value not only for shareholders but for society. However, businesses and investors seeking to harness these opportunities face significant institutional and normative barriers to achieving their goals.

In a new paper, the co-founders of non-profit B Lab, Andrew Kassoy, Bart Houlahan, and Jay Coen Gilbert, write about this overarching culture shift, the importance of and impediments to effective impact governance and impact management to make this shift meaningful and lasting, and how a rapidly growing community of responsible businesses has overcome these barriers, is maximizing its social impact, and is creating pathways for others to follow. The impact and growth of the B Corp movement will be maximized not only through increased adoption by business leaders, but also through the unique roles played by research institutions, the media, policy-makers, investors, and the general public. With enough support, this movement may soon transform shareholder capitalism into stakeholder capitalism, in which businesses can more easily live up to their potential to create a more shared and durable prosperity for all. 

This paper is published as part of the Center for Effective Public Management’s Initiative on 21st Century Capitalism. It is one of more than a dozen papers written by academics and practitioners about the changing role of the corporation and the importance of improving corporate governance. The authors of this paper are the co-founders of B Lab, a nonprofit organization that oversees the certification of B Corporations, and a major subject of this paper. The perspectives put forth in this paper are solely those of the authors, based on their professional expertise in this area.

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From Syria and Iraq to Libya and Yemen, the Middle East is once again rife with conflict. Much of the fighting is along sectarian lines, but can it really be explained simply as a “Sunni versus Shia” battle? What explains this upsurge in violence across the region? And what role can or should the United States play?

In a new Analysis Paper, F. Gregory Gause, III frames Middle East politics in terms of a new, regional cold war in which Iran and Saudi Arabia compete for power and influence. Rather than stemming from sectarian rivalry, this new Middle East cold war results from the weakening of Arab states and the creation of domestic political vacuums into which local actors invite external support.

Read "Beyond Sectarianism: The New Middle East Cold War"

Gause contends that military power is not as useful in the regional competition as transnational ideological and political connections that resonate with key domestic players. The best way to defuse the conflicts, he argues, is to reconstruct stable political orders that can limit external meddling.

Noting the limits in U.S. capacity to do so, Gause recommends that the United States take a modest approach focused on supporting the states that actually govern, acting multilaterally, and remembering that core U.S. interests have yet to be directly threatened.

Read the full paper in English or Arabic.

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President Obama’s speech at West Point, outlining the way forward on Afghanistan and Pakistan, was followed three days later by two important events underscoring the president’s view that “our security and leadership does not come solely from the strength of our arms.” He conveyed a new smart power view of security that “derives from our people [including] … Peace Corps volunteers who spread hope abroad, and from the men and women in uniform who are part of an unbroken line of sacrifice …”

On December 4, General Anthony Zinni, USMC (Ret.), former commander-in-chief of U.S. Central Command (CENTCOM), addressed an audience celebrating the tenth anniversary of the International Center for Religion and Diplomacy (ICRD). He pointedly noted that hard power alone cannot fight terrorism; economic and social factors of terrorist populations should be addressed. He further noted that empowering faith-based approaches “is a tremendous asset to inform the ways we mediate and find common ground … to figure out what the other side of smart power means.”

Recognizing that educational reform is critical, ICRD to date has empowered about 2,300 Pakistani madrassas administrators and teachers with enhanced pedagogical skills promoting critical thinking among students, along with conflict resolution through interfaith understanding. Evidence of success is mounting as the program fosters local ownership reasserting Islam’s fundamental teachings of peace and historical contributions to the sciences and institutions of higher learning—a rich history that was misappropriated by extremists who took over a significant number of madrassas using rote learning laced with messages of hate.

Earlier the same day, President Obama’s newly minted Peace Corps Director Aaron Williams, himself a former Dominican Republic Peace Corps volunteer, received high marks from former Senator Harris Wofford—a JFK-era architect of the Peace Corps—and hundreds of NGOs and volunteer leaders at the “International Volunteer Day Symposium.”

Director Williams has embraced a new “global service 2.0” style leadership committed to championing Peace Corps volunteers alongside a growing corps of NGO, faith-based, new social media and corporate service initiatives. Wofford, who co-chairs the Building Bridges Coalition team with former White House Freedom Corps Director John Bridgeland, spoke about the present moment as a time to “crack the atom of citizen people power through service.”

The notion of a “smart power surge” through accelerated deployment of people power through international service, interfaith engagement, and citizen diplomacy should be quickly marshaled at a heightened level to augment the commander-in-chief’s hard power projection strategies outlined at West Point. 

According to successive Terror Free Tomorrow polling, such strategies of service and humanitarian engagement by the United States have been achieving sustainable results in reducing support for terrorism following the tsunami and other disasters from Indonesia to Pakistan and Bangladesh. Lawmakers should take note of these findings, along with the evidence-based success of Johnston’s ICRD Madrassas project (which, inexplicably, has not received federal support to date, in spite of its evidence of marked success in giving Pakistani children and religious figures critical tools that are urgently need to be scaled up across the country to wage peace through enlightened madrassas education and interfaith tolerance).

A growing coalition of now over 400 national organizations is amassing a “Service World” platform for 2010. They have taken a page out of the incredibly successful Service Nation platform, which Barack Obama and John McCain both endorsed, creating a “quantum leap” in domestic service through fast track passage of the Kennedy Serve America Act signed into law by the president last spring. Organizers hope to repeat this quantum leap on the international level through a “Sargent Shriver Serve the World Act,” and through private-sector partnerships and administration initiatives adapting social innovation to empower service corps tackling issues like malaria, clean water, education and peace.  

With the ICRD Pakistan success, a rebounding Peace Corps and the Building Bridges Coalition’s rapid growth of cross-cultural solutions being evaluated by Washington University, the pathway to “the other side of smart power” through service, understanding and acceptance, is being vividly opened.

A Brookings Global Views paper further outlines how multilateral collaboration can be leveraged with other nations in this emerging “global force for good.” It is a good time to reflect on all this as we approach the upcoming 50th anniversary of the Peace Corps next year in Ann Arbor, where on October 14, 1960 President John F. Kennedy inspired students to mount a new global service.  

President Obama’s call to global engagement in Cairo in June, which ignited the announcement of Service World later that same morning, now demands a response from every citizen who dares to live up to JFK’s exhortation to “ask not what your country can do for you—ask what you can do for your country,” along with our young men and women preparing for engagement at West Point.  

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A conversation with Deputy Secretary of State Antony Blinken

One year after the White House Summit on Countering Violent Extremism, the United States continues to adapt its efforts to blunt the appeal of violent extremism. As part of this effort, the State Department is launching a series of new initiatives to better coordinate the U.S. response to terrorist propaganda and recruitment.

On February 16, the Foreign Policy program at Brookings hosted The Honorable Antony J. Blinken, deputy secretary of state, for a discussion of the United States’ civilian-led initiatives to counter the spread of the Islamic State and other violent extremist groups. Blinken will chart the path forward, to include partnerships with industry and civil society, and outlined the challenges that lie ahead.

Brookings President Strobe Talbott offered welcoming remarks. General John Allen, senior fellow and co-director of the Center for 21st Century Security and Intelligence at Brookings, introduced Deputy Secretary Blinken, and Tamara Cofman Wittes, senior fellow and director of the Center for Middle East Policy at Brookings, joined Deputy Secretary Blinken in conversation following his remarks.

Join the conversation on Twitter using #CVE

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• New frameworks for countering terrorism and violent extremism
• American diplomacy best instrument against extremism
• Islamic State numbers lowest since 2014
• Common denominators of violent extremists
• Progress in Syria against Islamic State

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• New frameworks for countering terrorism and violent extremism

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With the rise of ISIS and a growing terrorist threat in the West, unprecedented attention has focused on Islam, which despite being the world’s fastest growing religion, is also one of the most misunderstood. In his new book “Islamic Exceptionalism: How the Struggle over Islam is Reshaping the World” (St. Martin’s Press, 2016), Senior Fellow Shadi Hamid offers a novel and provocative argument on how Islam is, in fact, “exceptional” in how it relates to politics, with profound implications for how we understand the future of the Middle East. Hamid argues for a new understanding of how Islam and Islamism shape politics by examining different modes of reckoning with the problem of religion and state, including the terrifying—and alarmingly successful—example of ISIS.

On June 9, Shadi Hamid and Isaiah Berlin Senior Fellow in Culture and Policy Leon Wieseltier discussed the unresolved questions of religion’s role in public life and whether Islam can—or should—be reformed or secularized.

Join the conversation on Twitter using #IslamicExceptionalism

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• Islamic exceptionalism: How the struggle over Islam is reshaping the world - Part 1
• Islamic exceptionalism: How the struggle over Islam is reshaping the world - Part 2

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• Islamic exceptionalism: How the struggle over Islam is reshaping the world

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Editors’ Note: The phenomenon Donald Trump has created has become something larger than him, and something far more dangerous, writes Bob Kagan. This phenomenon has arisen in other democratic and quasi-democratic countries over the past century, and it has generally been called “fascism.” This piece originally appeared in The Washington Post.

The Republican Party’s attempt to treat Donald Trump as a normal political candidate would be laughable were it not so perilous to the republic. If only he would mouth the party’s “conservative” principles, all would be well.

But of course the entire Trump phenomenon has nothing to do with policy or ideology. It has nothing to do with the Republican Party, either, except in its historic role as incubator of this singular threat to our democracy. Trump has transcended the party that produced him. His growing army of supporters no longer cares about the party. Because it did not immediately and fully embrace Trump, because a dwindling number of its political and intellectual leaders still resist him, the party is regarded with suspicion and even hostility by his followers. Their allegiance is to him and him alone.

And the source of allegiance? We’re supposed to believe that Trump’s support stems from economic stagnation or dislocation. Maybe some of it does. But what Trump offers his followers are not economic remedies—his proposals change daily. What he offers is an attitude, an aura of crude strength and machismo, a boasting disrespect for the niceties of the democratic culture that he claims, and his followers believe, has produced national weakness and incompetence. His incoherent and contradictory utterances have one thing in common: They provoke and play on feelings of resentment and disdain, intermingled with bits of fear, hatred and anger. His public discourse consists of attacking or ridiculing a wide range of “others”—Muslims, Hispanics, women, Chinese, Mexicans, Europeans, Arabs, immigrants, refugees—whom he depicts either as threats or as objects of derision. His program, such as it is, consists chiefly of promises to get tough with foreigners and people of nonwhite complexion. He will deport them, bar them, get them to knuckle under, make them pay up or make them shut up.

That this tough-guy, get-mad-and-get-even approach has gained him an increasingly large and enthusiastic following has probably surprised Trump as much as it has everyone else. Trump himself is simply and quite literally an egomaniac. But the phenomenon he has created and now leads has become something larger than him, and something far more dangerous.

[T]he phenomenon he has created and now leads has become something larger than him, and something far more dangerous.

Republican politicians marvel at how he has “tapped into” a hitherto unknown swath of the voting public. But what he has tapped into is what the founders most feared when they established the democratic republic: the popular passions unleashed, the “mobocracy.” Conservatives have been warning for decades about government suffocating liberty. But here is the other threat to liberty that Alexis de Tocqueville and the ancient philosophers warned about: that the people in a democracy, excited, angry and unconstrained, might run roughshod over even the institutions created to preserve their freedoms. As Alexander Hamilton watched the French Revolution unfold, he feared in America what he saw play out in France—that the unleashing of popular passions would lead not to greater democracy but to the arrival of a tyrant, riding to power on the shoulders of the people.

This phenomenon has arisen in other democratic and quasi-democratic countries over the past century, and it has generally been called “fascism.” Fascist movements, too, had no coherent ideology, no clear set of prescriptions for what ailed society. “National socialism” was a bundle of contradictions, united chiefly by what, and who, it opposed; fascism in Italy was anti-liberal, anti-democratic, anti-Marxist, anti-capitalist and anti-clerical. Successful fascism was not about policies but about the strongman, the leader (Il Duce, Der Fuhrer), in whom could be entrusted the fate of the nation. Whatever the problem, he could fix it. Whatever the threat, internal or external, he could vanquish it, and it was unnecessary for him to explain how. Today, there is Putinism, which also has nothing to do with belief or policy but is about the tough man who singlehandedly defends his people against all threats, foreign and domestic.

Successful fascism was not about policies but about the strongman, the leader (Il Duce, Der Fuhrer), in whom could be entrusted the fate of the nation.

To understand how such movements take over a democracy, one only has to watch the Republican Party today. These movements play on all the fears, vanities, ambitions and insecurities that make up the human psyche. In democracies, at least for politicians, the only thing that matters is what the voters say they want—vox populi vox dei. A mass political movement is thus a powerful and, to those who would oppose it, frightening weapon. When controlled and directed by a single leader, it can be aimed at whomever the leader chooses. If someone criticizes or opposes the leader, it doesn’t matter how popular or admired that person has been. He might be a famous war hero, but if the leader derides and ridicules his heroism, the followers laugh and jeer. He might be the highest-ranking elected guardian of the party’s most cherished principles. But if he hesitates to support the leader, he faces political death.

In such an environment, every political figure confronts a stark choice: Get right with the leader and his mass following or get run over. The human race in such circumstances breaks down into predictable categories—and democratic politicians are the most predictable. There are those whose ambition leads them to jump on the bandwagon. They praise the leader’s incoherent speeches as the beginning of wisdom, hoping he will reward them with a plum post in the new order. There are those who merely hope to survive. Their consciences won’t let them curry favor so shamelessly, so they mumble their pledges of support, like the victims in Stalin’s show trials, perhaps not realizing that the leader and his followers will get them in the end anyway.

A great number will simply kid themselves, refusing to admit that something very different from the usual politics is afoot.

A great number will simply kid themselves, refusing to admit that something very different from the usual politics is afoot. Let the storm pass, they insist, and then we can pick up the pieces, rebuild and get back to normal. Meanwhile, don’t alienate the leader’s mass following. After all, they are voters and will need to brought back into the fold. As for Trump himself, let’s shape him, advise him, steer him in the right direction and, not incidentally, save our political skins.

What these people do not or will not see is that, once in power, Trump will owe them and their party nothing. He will have ridden to power despite the party, catapulted into the White House by a mass following devoted only to him. By then that following will have grown dramatically. Today, less than 5 percent of eligible voters have voted for Trump. But if he wins the election, his legions will comprise a majority of the nation. Imagine the power he would wield then. In addition to all that comes from being the leader of a mass following, he would also have the immense powers of the American presidency at his command: the Justice Department, the FBI, the intelligence services, the military. Who would dare to oppose him then? Certainly not a Republican Party that laid down before him even when he was comparatively weak. And is a man like Trump, with infinitely greater power in his hands, likely to become more humble, more judicious, more generous, less vengeful than he is today, than he has been his whole life? Does vast power un-corrupt?

This is how fascism comes to America, not with jackboots and salutes (although there have been salutes, and a whiff of violence) but with a television huckster, a phony billionaire, a textbook egomaniac “tapping into” popular resentments and insecurities, and with an entire national political party—out of ambition or blind party loyalty, or simply out of fear—falling into line behind him.

If you live in a city or suburb, chances are your regional government has tried to get your attention. Did you notice? Many of the issues your regional government is grappling with are actually important to you: the quality of the air you breathe, the quality of public transportation, the availability of green open space, and more.

As important as these issues are, I can almost guarantee that planners from your region have had to work extra hard to convince the press -- not to mention the citizens that live and work there -- to pay attention. The problem is, regional planning is about as exciting to the public as televised bowling and the press don’t seem to find the topic as newsworthy as it should be.

And then there is Paris. In one year, approximately a hundred articles and editorials on Grand Paris, a new regional effort, were printed in the city’s main paper, Le Monde. Grand Paris has also been covered by UK newspapers, such as the Telegraph and The Guardian, and by US newspapers, such as The New York Times and The Christian Science Monitor. In my interviews with Parisian architects, economists, and sociologists, they tell me that it’s not only the press that is paying attention. Ordinary citizens on the streets and cafes are talking about Grand Paris and Paris as a region.

So what happened?

Turns out, President Sarkozy created a political and media frenzy this past year when he announced his intention to design a new Paris that incorporates the suburbs. Looking at his effort from a socio-economic perspective, Sarkozy should be lauded for his effort to reconnect the isolated suburbs to the economic heart of Paris. The 2005 riots by African immigrants in some of these suburbs gave the world a real peek into some of the inequities found here.

His push has been to look past local political boundaries and acknowledge the new Paris that is emerging -- one that is both larger in geography and socio-economically more diverse. In 2007, the metropolitan area produced more than a quarter of France’s GDP, with a Gross Metropolitan Product of $731.3 billion.

Yet, his national government cites that Paris is underdeveloped in important sectors, and that the region’s economic growth has been slowing over the past two decades. Sarkozy also saw this as an opportunity to redefine the region in a post-Kyoto era, where sustainable development is no longer an afterthought.

Sarkozy retained 10 architectural teams with heavy hitters, such as Richard Rodgers, and asked them to “think big” on how to physically redefine the Paris region. In response, they offered lofty ideas for new economic centers, new high density housing hubs, and even a Paris covered with green roofs. For a moment, one could even argue that these teams breathed a new life of possibility for Paris. 

But politics is local—even when the French President is involved. 

As it turns out, Paris already has a plan for their region; one that was formally approved by the local jurisdictions and leaders and is now simply waiting for sign off by Sarkozy’s government. This plan addresses many of the issues Sarkozy argues that the region lacks, such as the need to address the 20 years of underinvestment in public infrastructure.

It also turns out that Grand Paris flies directly in the face of the regional coalition building effort under way. An important number of leaders that comprise the region’s 1,231 jurisdictions are already forging a common agenda on cross cutting issues such as transportation and economic development. These are just two of the several missteps that have made the idea turn sour.

So what seems to have started as a visionary act to physically remake the region has turned into a story on jurisdictional entanglements and hurt egos -- and the press ate it up. Interestingly, this controversy and all the press it generated has actually been an important win for regionalism in the end.

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The financial crisis is now eight years behind us, but its legacy lingers on. Many Americans are concerned about their financial security and are particularly worried about whether they will have enough for retirement. Guaranteed benefit pensions are gradually disappearing, leaving households to save and invest for themselves. What role could equities play for retail investors?

Another concern about the lingering impact of the crisis is that business investment and overall economic growth remains weak compared to expectations. Large companies are able to borrow at low interest rates, yet many of them have large cash holdings. However, many small and medium sized enterprises face difficulty funding their growth, paying high risk premiums on their borrowing and, in some cases, being unable to fund investments they would like to make. Equity funding can be an important source of growth financing.

On Friday, April 15, the Initiative on Business and Public Policy at Brookings examined what role equity markets can play for individual retirement security, small business investment and whether they can help jumpstart American innovation culture by fostering the transition from startups to billion dollar companies.

You can join the conversation and tweet questions for the panelists at #EquityMarkets.

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• Keynote address by Richard G. Ketchum
• Panel Discussion
• Keynote address by Roger Ferguson

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• Not just for the professionals? Understanding equity markets for retail and small business investors

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• Uncorrected Transcript (.pdf)

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• Equity Markets Retirement Security 2016 Apr 15 (2)
• 20160415_equity_markets_transcript

Abstract

An individual-based computational model of smallpox epidemics in a two-town county is presented and used to develop strategies for bioterror containment. A powerful and feasible combination of preemptive and reactive vaccination and isolation strategies is developed which achieves epidemic quenching while minimizing risks of adverse side effects. Calibration of the model to historical data is described. Various model extensions and applications to other public health problems are noted.

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