The Second-Most Salient Fact

The last hurrah of the baby boom; a Clark Medal in economics

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Posted in 2016 elections, 2020 elections, Contemporary economics Tagged with: , ,

Journalist Andrew Sullivan speculated in New York magazine earlier this month that US democracy is ripe for a tyrant, and that the candidacy of Donald Trump is potentially “an extinction-level event.”  Jacob Weisberg, editor-in-chief of the Slate Group, who seems to me (and to the Financial Times) the shrewdest of the current crop of US political commentators, thinks Sullivan’s widely-read essay is “one of the most important things written about the phenomenon of Trump.”

I think it is bunk. What about the Sanders phenomenon?

The outcome of the long primary season is best understood as fatigue-turned- protest against the initial promise of a Bush-Clinton race – two families that have loomed large in presidential politics since 1988 and 1992 respectively. The undertone of fascination with the possibilities of authoritarian rule is real enough, at least in some quarters, but it is easily exaggerated.

The second-most salient fact about the 2016 presidential election is the tight grouping of the candidates’ ages:  Donald Trump was born in 1946, Hillary Clinton in 1947, Bernie Sanders in 1941. This is not the beginning of the end of the US democracy.  It is the last hurrah of the post-World War II baby boom.

Certainly the election has become much more dangerous since Trump clinched the Republican nomination. It is highly unlikely, but it is no longer inconceivable that the developer-turned-reality-television-star could become president. This in itself is  harmful to the reputation of the United States. I don’t quite see how the Republican Party recovers from its embarrassment, at least over the long term, but likely it will.

For the record, I wish Clinton would win forty-nine states in November (though it doesn’t seem very plausible that she will) and that Sanders goes back to Vermont.  Whoever wins is likely to be a one-term president. Today’s poisonous politics will continue for a while longer. My hunch is that the presidential candidates who lead the Republican and Democratic Parties in 2020 will have been born after 1964 – the last year of the baby boom.

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Yuliy Sannikov, of Princeton University, last week was named winner of the John Bates Clark medal for 2016.  The award is given annually by the American Economic Association to an economist working in the United States judged to have made the most significant contribution before the age of forty. He received the recently-established Fischer Black Prize from the American Finance Association in 2015.

Sannikov, who won three gold medals in International Mathematical Olympiads after graduating from Sevastopol Visual Arts School in 1994, is often thought of chiefly as a tool builder, a master of adapting continuous time methods to dynamic games using the stochastic calculus.

But after learning economics as a Princeton undergraduate, the PhD he received from at Stanford Business School in 2004 (where his advisers were Robert Wilson and Andrzej Skrzypacz) immersed him in all kinds of practical problems – everything from corporate management to monetary policy. As the citation says,

Previous models abstracted from crucial economic forces in the name of tractability, but Sannikov’s methods allow models to include the most important forces and thus deliver results that are much more relevant. He is one of the few theorists in many years to have introduced a truly novel tool that changed the way theory is done.

Meanwhile, Olivier Blanchard, who served a heroic tour as chief economist for the International Monetary Fund from 2008 s until 20015, was slated to be elected AEA president. Before joining the IMF, Blanchard was for twenty-five years a mainstay of economics department at the Massachusetts Institute of Technology, and an influential architect of policy-relevant macroeconomics.

Named distinguished fellows of the AEA were Richard Freeman, of Harvard University; Glenn Loury, of Brown University; Julio Rotemberg, of Harvard University; and  Isabel Sawhill, of the Brookings Institution.