Milken Institute Review Third Quarter 2002

September 2002

Robert E. Litan, director of economic studies at the Brookings Institution, offers a detailed analysis of the many fixes for accounting issues exposed by Enron's collapse and finds most lacking. The biggest obstacle to effective reform, he suggests, is the monopoly of the Financial Accounting Standards Board (FASB) over accounting rules.

David A. Levine, former chief economist at Sanford C. Bernstein & Co., Inc., offers a bold solution for keeping Social Security viable as the huge Baby Boom generation approaches retirement: Raise the age of eligibility for full benefits.

Gavin Buckley, a specialist in international finance at the U.S. Treasury Department, takes a close look at the agency in charge of cleaning up Japan's banking mess.

Economists in the Milken Institute's Capital Studies group look at how well countries around the world are doing at allowing capital to flow to entrepreneurs - and what can be done to build a middle class and efficient financial markets in developing countries.

Institute ChairmanMichael Milken sits down with a panel of Nobel Laureates in economics in an edited excerpt from their discussion at the Milken Institute 2002 Global Conference.

Also in this issue of the Milken Institute's quarterly economic journal, two of the world's leading supporters of globalization - billionaire philanthropist George Soros and Nobel Prize-winner Joseph Stiglitz - offer ideas on how to make it work better. Their views appear in separate excerpts from their latest books:

In On Globalization, Soros outlines an ambitious plan for reforming and increasing foreign aid to poor and transitional economies.

In Globalization and its Discontents, Stiglitz takes on the International Monetary Fund and the consequences of some of its decisions during the 1990's Asian financial crisis.

Finally, Institute Senior Fellow and resident demographer Bill Frey highlights the good and bad news about higher education in America today based on the latest Census data. In this issue's Charticle, Frey illustrates what states have the greatest number of people with college degrees, and those with the highest percentage of dropouts - and how uneven these distributions are becoming across the United States.

And we have our latest economic jokes and some ideas on the top economist web sites.