Milken Institute Review Second Quarter 2000

June 2000

Julia Sweig, deputy director of the Council on Foreign Relations Latin America Studies Program, offers some much-need perspective on Cuba's economic endgame. Ten years after the collapse of the socialist bloc, the Cuban economy is still muddling through, she writes, thanks to Fidel Castro's clever mix of pragmatism and principle. "It seems unlikely that economic troubles will force a sea change in policy as long as Fidel remains at the helm," Sweig writes.

Robert Mendelsohn, an economist at Yale University, weighs in with an undoubtedly controversial view of global warming: Incentives to reduce "greenhouse" emissions that existed when countries signed the Kyoto agreement have mostly vanished. The reason: "Global warming may, in fact, turn out to be a lot like Y2K," he writes. "We were very anxious before it happened. However, with a reasonable amount of planning and action, everything turned out all right in the end."

Rudy Penner, a former director of the Congressional Budget Office now at the Urban Institute, offers straight talk on the budget surplus. "It is important to remember how lucky we are," he writes. "We can carp all we want about the relative benefits of paying off the debt versus cutting taxes versus increasing spending, but it is like arguing over the choice between chocolate cake and a hot fudge sundae."

Larry White, an economist at New York University's Stern School of Business, offers a primer on network economies and how government should deal with them.

Bill Frey, Institute Senior Fellow, writes an essay on the aging of the baby boomers and the schisms it will create between central cities and suburbs.

In this issue's book excerpt, authors Serguey Braguinsky and Grigory Yavlinsky (the leader of Russia's Yablonko political party) see a silver lining in the Russian economy's dreary shell. To jumpstart the economy, they suggest a new social contract in which those who want to do business in the New Russia openly pay the state for protection against organized crime. Their book is titled Incentives & Institutions: The Transition to a Market Economy in Russia.

The Review also includes excerpts from two roundtable discussions with eight Economic Science Nobel Laureates at the Milken Institute 2000 Global Conference, a review of Paul Ormerod's new book, Butterfly Economics by Sylvia Nasar, and, of course, our regular features: The Charticle, Research F.Y.I., Institute News and Mark Alan Stamaty's cartoon, Ekinomix.