Research Briefs

 

Obama’s 2014 Foreign-Policy Challenges

The success of the Iran talks and the agreement to destroy Syria’s chemical weapons were important accomplishments for the Obama administration at the end of 2013, writes Nicholas Burns. But the new year will continue to bring daunting foreign policy challenges, ranging from the growing China-Japan rivalry, to the seemingly intractable conflicts in the Middle East and Africa, the withdrawal from Afghanistan, and managing difficult bilateral relationships, such as with Russia and India. “With these and other crises, Obama will be tested globally as never before in 2014,” Burns writes. “The world expects a fully engaged and self-confident superpower to take charge. Providing that steady, leading voice will be Obama’s singular challenge in the year ahead.”

Nicholas Burns
Obama’s 2014 Foreign-Policy Challenges
The Boston Globe

Strategies for Sustainable Growth

“The U.S. and global economies may be in a period of secular stagnation in which sluggish growth and output, and employment levels well below potential, might coincide for some time to come with problematically low real interest rates,” writes Lawrence Summers. The challenge of this stagnation is achieving growth in a sustainable way. Of the possible approaches (including improving supply-side fundamentals like workforce skill and tax reform, and relying on regulatory policy to ensure financial stability), the one that holds the most promise is “a commitment to raising the level of demand at any given level of interest rates through policies that restore a situation where reasonable growth and reasonable interest rates can coincide. To start, this means ending the disastrous trends toward ever less government spending and employment each year and taking advantage of the current period of economic slack to renew and build out our infrastructure.”

Lawrence Summers
Strategies for Sustainable Growth
Washington Post

With Healthcare.gov, the Government’s Bad Management Skills Are Showing Again

“The plight of the Affordable Care Act website has focused attention on a problem that seldom receives it — the absence of good management in the U.S. government,” write Linda Bilmes and coauthor (and former Commerce Secretary and White House Chief of Staff) William Daley. But there are steps the government should take to restore the public’s confidence in its ability to get things done, the authors argue, including more and better incentives for workers, the consolidation of programs with similar missions within the federal bureaucracy, and better alignment with state and local governments, which disperse more than one out of every four federal dollars. “Poor management is undermining public trust in our government. It makes it hard for departments to run programs effectively and for citizens to have faith in our leaders. Starting with Congress, our elected officials need to change the attitude in Washington to one that values and rewards efficient government.”

Linda Bilmes
With Healthcare.gov, the Government’s Bad Management Skills Are Showing Again
Washington Post

Questioning the Specialization Myth

“It is completely fair to ask: What were they thinking?”, writes Ricardo Hausmann. “Others sound so obvious after they are expressed that it is hard to deny their truth … One such idea is the notion that cities, regions and countries should specialize. Since they cannot be good at everything, they must concentrate on what they are best at — that is, on their comparative advantage. They should make a few things very well and exchange them for other goods that are made better elsewhere, thus exploiting the gains from trade. However, while some ideas are intuitive or obvious, they can also be wrong and dangerous. As is often the case, it is not what you do not know, but what you mistakenly think you know, that hurts you. The idea that cities and countries actually do specialize, and that therefore they should specialize, is one of those very wrong and dangerous ideas.”

Ricardo Hausmann
Questioning the Specialization Myth
The Project Syndicate