US Policy Changes Vol.55 (Comparison with Nixon administration)

Here are the data in 1967 and 2015, and links.

Nixon 1969-74
[Accomplishments]
What were President Richard Nixon’s accomplishments? | @inside_gov
Dec 8, 1969: Nixon declares Vietnam War is ending | @HISTORY
Strategic Arms Limitations Talks/Treaty (SALT) I and II | @StateDept
Chinese Rapprochement under Nixon: A Case Study in Foreign Policy Bureaucracy and Decision-making (PDF) | Joshua D. Roselman @RockefellerCtr
Remembering Nixon’s Wage and Price Controls | @GeneHealy @WashExam_PR @CatoInstitute
How a Republican Desegregated the South’s Schools | GEORGE P. SHULTZ @nytimes
A brief history of Medicare in America | @MedicareMonitor
Nixon and the End of the Bretton Woods System, 1971–1973 | @StateDept
[Nominal GDP] $862 billion
[GDP per capita] $22,454
[Population] 199 million
[Economic Growth Rate] 2.7%
[Stock Market] 7.8%
[Unemployment Rate] 3.8%
[Interest Rate, Discount Rate for United States] 4.0%~4.5%
[Domestic Demand] 7.7%
[Consumption] 5.7%
[Investment] 3.4%
[Sales in manufacturing & trade] 2.0%
[Industrial Production] 1.2%
[Money] 6.4%
[Inflation Rate (CPI)] 3.0%
[Exports (G&S)] 6.1%
[Imports (G&S)] 7.7%
[Trade Balance (merchandise)] $4,141 million
[Current Account (of GDP)] 0.2%
[Current Account Balance] $1.5 billion
[Public Debt (of GDP)] 1%
(in 1967)

Trump: The Presidential Precedents (Episode 4 of 5: Richard Nixon [13:42]) | @BBC

Trump 2017-
[Nominal GDP] $18,036 billion
[GDP per capita] $51,123
[Population] 321 million
[Economic Growth Rate] 0.7%
[Stock Market] -2.2%
[Unemployment Rate] 5.3%
[Interest Rate, Discount Rate for United States] 0.75%~1.00%
[Domestic Demand] 3.0%
[Consumption] 3.1%
[Investment] 4.0%
[Retail Sales] 2.2%
[Industrial Production] 0.3%
[Money] 5.9%
[Inflation Rate (CPI)] 0.7%
[Exports (G&S)] 3.4%
[Imports (G&S)] 3.8%
[Trade Balance] -$759.3 billion
[Current Account (of GDP)] -2.7%
[Current Account Balance] -$484.1 billion
[Public Debt (of GDP)] 106%
(in 2015)


US Policy Changes Vol.54 (R&D Vol.2)

Here are articles on R&D. Excerpts are on our own.

How Does the US President Decide on Science Policy? (1/4/2017) | @kellysimsgallagher (@TuftsUniversity) @LiveScience @ConversationEDU
One of the president’s most important responsibilities is fostering science, technology and innovation in the U.S. economy. The relationship between science and policy runs in two directions: Scientific knowledge can inform policy decisions, and conversely, policies affect the course of science, technology and innovation.
Historically, government spending on science has been good for the economy. Innovation is estimated to drive approximately 85 percent of economic growth. Not only does it provide a means for “creative destruction” within the economy, it also results in reduced costs for products and services that consumers demand. …
Where does the president get scientific advice?
…Vannevar Bush…the U.S. Office of Scientific Research and Development (OSRD). OSRD’s mission was to marshal and coordinate civilian and military scientists to develop and deploy new technology in wartime. OSRD helped to establish the Manhattan Project and was the origin of the military-industrial complex. …the Raytheon Corporation… …the National Science Foundation.
…the Office of Science and Technology Policy (OSTP)…
…OSTP works alongside the other offices in the White House, including the Domestic Policy Council, the Council on Environmental Quality and the National Security Council. …
Budget is a big part of it
…the president’s budget request must be approved by Congress in order for the spending priorities to be fulfilled.
Innovation research is an uncertain and risky investment, which is why the government has traditionally shouldered the burden for pre- or noncommercial science and technology research and why universities do most of this type of research. …
The Department of Defense manages the largest portion of the federal R&D budget (US$78 billion in the FY17 budget) compared with all other nondefense R&D combined, at $68 billion. The National Institutes of Health comes in second at 0.77 percent with $30.9 billion. The Department of Energy and NASA have far fewer resources, with R&D funds of about $14 billion and only $12 billion, respectively. …
The internet…the U.S. Defense Advanced Research Projects Agency, shale gas fracking from both Defense and DOE investments at Los Alamos National Lab and research on the human genome from NIH. Private firms like Microsoft and Google, Mitchell Energy and Pfizer capitalized upon taxpayer investments…
Case study: Obama’s OSTP
… The OSTP worked to make more than 180,000 federal datasets and collections available to students, entrepreneurs and the public. It produced the first-ever U.S. innovation strategy, launched the Precision Medicine Initiative (providing more than $200 million to accelerate a new era of personalized medicine), embarked on a Cancer Moonshot initiative and launched the BRAIN initiative that resulted in a doubling of research funding for Alzheimer’s research at NIH between 2012 and 2017.
Initiatives like these are a hopeful down payment on results that usually bear fruit years later. Through the efforts of the SunShot and wind R&D programs at DOE and private firms, for example, the United States now generates more than three times as much electricity from wind and four times as much from solar as it did in 2008. That’s because the cost for renewables has come down rapidly – solar costs 1/150th what it did in the 1970s. …
Science opportunities for President Trump
… Indeed, the current President’s Council of Advisors on Science and Technology (PCAST) produced an excellent report on accelerating U.S. advanced manufacturing in 2014. …

Role of Science in the Trump Administration (12/22/2016) | @AmOrnith
AOS is among 59 organizations to sign a letter from the American Institute of Biological Sciences to… The text of the letter is below.
… Biology is the science of life. Every day, discoveries arising from biological research contribute to improved human health and economic security. Biology is a foundational science from which we build new antibiotic and antiviral medications, translate findings from genetics laboratories into the development of more drought tolerant food crops, and develop new materials inspired by biological compounds and structures. Biological diversity surveys, for example, provide us with the information we need to identify and model diseases, such as Ebola and Zika, which can jump from wild animal populations to humans. Insights derived from our investigations into the human microbial biome are improving our understanding of various health conditions and diseases, such as food allergies, Crohn’s and Inflammatory Bowel Disease…
Research is an important engine that powers our economy. Over the past 50 years, roughly half of our nation’s private sector economic growth has resulted from research and development. One analysis of the return on the federal government’s $12 billion investment in the Human Genome Project found that it generated an estimated $800 billion in economic return. Other economic analyses of investments in agricultural research have estimated a $10 return on every $1 the federal government invests. … https://www.aibs.org/public-policy/resources/AIBS_Biological_Innovation_Report.pdf
The federal government provides more than half of the funding for basic research in the United States. …80,000 patents awarded over a 10-year period were based on research initially funded by the federal government’s National Science Foundation. …
Science has not been, nor do we think it should be, a partisan issue. Rather, it is a public benefit. …

Energy research in the Trump administration (1/21/2017) | Stephanie Joyce @GlenwoodPI
… “Maybe shifting some of those resources away from the renewable industry, which has been a tremendous beneficiary of federal assistance under the Obama administration, and directing some of that towards developing technology to help us use our coal resource better,”…
Energy is 2 percent of the total pie of R&D funding on average between 2000 and 2017, or an average of $2.2 billion a year. Compare that to defense R&D, which averaged $78 billion a year over the same time period, or 56 percent of all R&D spending. …
… As a 2010 paper from the Pacific Northwest National Lab shows, private investment has tended to gravitate toward established industries, like oil and gas, rather than less proven technologies, like renewables. …

How the Trump Administration Could Impact Research – Federal Relations’ Jennifer Grodsky on the uncertainties ahead for BU | @sararimer @BU_Tweets
…BU’s vice president for federal relations…
Grodsky:… Presidents matter. But our new Congress matters, too. … So the leading proponents of the big new CURES medical research law were always a bipartisan group. …
The biggest threat to research agencies and student aid budgets continues to be the current budget caps and the threat of sequester if the caps aren’t lifted. The two-year agreement that temporarily lifted the caps ends in March 2017, and it remains to be seen how a Trump administration and a Republican Congress will address the caps. One serious and credible threat to research universities is that politicians will choose to lift the caps for defense spending, but not for nondefense spending. Nearly all our priorities fall under the category of nondefense spending…
…real success for agency budgets will depend on lifting the budget caps.
Research priorities like the National Institutes of Health’s BRAIN Initiative may well continue into the new administration…
… Research related to the Affordable Care Act, such as work funded by the Patient-Centered Outcomes Research Institute or the Agency for Healthcare Research and Quality, may be significantly reduced.
…the National Endowment for the Humanities (NEH)…
The question is who will Trump appoint as the head of the Office of Science and Technology Policy. That person can also have a second title—as science advisor to the president—but that’s optional. …
… Vermont’s senators will play important roles as they will become the senior Democrats on both the Senate Budget and Appropriations Committees.
…the Association of American Universities. …
As with all my peers at other universities, my job is to get in there early with President Trump’s advisors and make the case for funding research and why research is important. I can take the view that he hasn’t said much, so let’s get in there and arm him with facts that we think make the case for why research and science should be a top priority.

USDA scrambles to ease concerns after researchers were ordered to stop publishing news releases (1/25/2017) | @jdelreal @washingtonpost

President Trump and science: 10 things to look for (and fear?) (1/23/2017) | @jeffmervis @scienmag

Gelernter, potential science advisor to Trump, denies man-made climate change (1/25/2017) | BRITTON O’DALY & DAVID YAFFE-BELLANY @yaledailynews

EPA science under scrutiny by Trump political staff (1/25/2017) | @mbieseck & @borenbears @AP @FoxLexington
… The communications director for President Donald Trump’s transition team at EPA, Doug Ericksen, said Wednesday the review extends to all existing content on the federal agency’s website, including details of scientific evidence showing that the Earth’s climate is warming and man-made carbon emissions are to blame. …


Canada Vol.6 (Trudeau administration Vol.1)

Here is a list of Current Ministry (Cabinet) | PARLIAMENT of CANADA (* CABINET SHUFFLE 2017.01.10; # Minister Mandate Letter from Prime Minister). Excerpts are on our own.

Innovation, science and economic development: NAVDEEP SINGH BAINS
Indigenous and Northern Affairs: CAROLYN BENNETT
International development and La Francophonie: MARIE-CLAUDE BIBEAU
Treasury Board president: SCOTT BRISON
Natural resources: JIM CARR
*Foreign affairs #: *Chrystia Freeland (Preceded by STÉPHANE DION)
Families, Children and Social Development: JEAN-YVES DUCLOS
Science: KIRSTY DUNCAN
Public services and procurement: JUDY FOOTE
*International trade #: *François-Philippe Champagne (Preceded by CHRYSTIA FREELAND)
Transport: MARC GARNEAU
Public safety and emergency preparedness: RALPH GOODALE
*Status of Women: *Maryam Monsef (Preceded by PATTY HAJDU)
Minister of Veterans Affairs and Associate Minister of National Defence: KENT HEHR
Canadian Heritage: MÉLANIE JOLY
Small Business and Tourism: BARDISH CHAGGER
Government House Leader: BARDISH CHAGGER
National Revenue: DIANE LEBOUTHILLIER
Agriculture and agri-food: LAWRENCE MACAULAY
*Immigration, refugees and citizenship #: *Ahmed Hussen (Preceded by JOHN MCCALLUM)
Environment and Climate Change: CATHERINE MCKENNA
*Employment, Workforce Development and Labour #: *Patty Hajdu (Preceded by MARYANNE MIHYCHUK)
*Democratic Institutions: *Karina Gould (Preceded by MARYAM MONSEF)
Finance: BILL MORNEAU
Health: JANE PHILPOTT
Sport and Persons with Disabilities: CARLA QUALTROUGH
National Defence: HARJIT SINGH SAJJAN
Infrastructure and Communities: AMARJEET SOHI
Fisheries, Oceans and the Canadian Coast Guard: DOMINIC LEBLANC
Justice and attorney-general: JODY WILSON-RAYBOULD
cf.
THE TRUDEAU CABINET (1/5/2017) | @globepolitics
Here are all 30 cabinet ministers at a glance (11/5/2015) | @OttawaCitizen

The 3 new faces of Justin Trudeau’s Liberal cabinet (1/10/2017) | @JPTasker @CBCNews
Long-time Liberal MP John McCallum is leaving federal politics for Beijing, where he will become Canada’s ambassador to China, and he will cede his immigration post to Ahmed Hussen, the first black Canadian to serve in Trudeau’s cabinet. …
Gould’s appointment as minister of democratic institutions will lower the average age of cabinet ministers considerably. …
Gould, 29, is the youngest female cabinet minister in Canadian history. …
… Champagne takes over the hot file as support for global trade wanes in much of the Western world amid an ascendency of protectionist rhetoric.
Champagne has one notable supporter in his corner: former prime minister Jean Chrétien. …

New Hands, Not Enough Cards (1/21/2017) | @RLindenFraser @NATOCanada
… With rising nationalism in Belgium, France and Germany, Canada will have to play a nervous game of wait-and-see.
… She carries the cachet of successfully concluding CETA negotiations in Europe. …
… The US government is not Wallonia, and Canada’s trade negotiators won’t have 28 EU governments on their side, as they did in the final dash to conclude CETA. …
… The risk of renegotiating, then, is not that America will punish Canada directly. The danger is that an American administration dead-set on Mexican concessions (anything, for example, that could be spun as payment for a certain wall) will throw the Canadian baby out with the NAFTA bathwater. It leaves Canadian officials with a classic dilemma: do they band together with Mexico, and risk handing everyone a worse deal, or do they strike out on their own, aim at a better agreement for Canada, and leave their erstwhile partners out in the cold? John Nash would have been proud.

In a major shuffle, Justin Trudeau re-tools cabinet in preparation for the Donald Trump era (1/12/2017) | @davidakin @calgaryherald
… McCallum had been Trudeau’s immigration minister and distinguished himself on that file by executing, albeit a bit tardily, on Trudeau’s campaign promise to bring thousands of Syrian refugees out of harms’s way and into Canada. …
Trudeau, at a House of Commons press conference after Tuesday’s shuffle, said he has asked Dion to take on a “senior role” and hinted that it will involve some sort of diplomatic role. …
Trudeau’s pick of Freeland is particularly interesting given that Freeland, whose family has roots in Ukraine and who speaks fluent Russian, is persona non grata in Russia. …
Trudeau said it’s clear the Trump presidency is likely to focus on jobs and growth.
“So it makes sense for the person who is responsible for foreign relations in the United States to also have the ability and responsibility…
Trudeau preserves the gender balance with this cabinet shuffle but has broadend cabinet’s ethnic diversity. Gould and Hussen are, respectively, the second Jewish and Muslim members of cabinet.
Monsef, the other Muslim member of cabinet, had badly handled the electoral reform file…
The former status of women minister, Patty Hajdu of Thunder Bay, Ont., will be rewarded for what the PMO believes has been a strong performance by being promoted to the labour portfolio. …

*Chrystia Freeland (Foreign affairs – moved from International trade)
*Maryam Monsef (Status of Women – moved from Democratic Institutions)
*Patty Hajdu (Employment, Workforce Development and Labour – moved from Status of Women)
*François-Philippe Champagne (International trade) @FPCChampagne
*Ahmed Hussen (Immigration, refugees and citizenship) @AhmedDHussen
*Karina Gould (Democratic Institutions) @karinagould


UK Vol.67 (Post-EUref #Brexit Vol.13)

Here are articles on UK Prime Minister Theresa May’s meeting with US President Donald Trump, et al. Excerpts are on our own.

Theresa May, I hope you cringed at Trump’s grasp. The alternative is grim (w Videos; 1/28/2017) | @jhedelstein @guardian

Trump’s Press Conference With British Prime Minister, Annotated (1/27/2017) | @NPR

‘OPPOSITES ATTRACT:’ THERESA MAY ON DONALD TRUMP AND RENEWING THE SPECIAL RELATIONSHIP (1/27/2017) | @Reuters @Newsweek

Theresa May: Donald Trump to make state visit to UK (1/27/2017) | @elizamackintosh @CNN

How did the WhiteHouse Stumble on Theresa May’s Visit? Let Us Count the Ways. (1/27/2017) | @emilyctamkin @ForeignPolicy

Theresa May’s meeting with Donald Trump ‘could sour Brexit negotiations’ (1/27/2017) | @DanielBoffey @guardian
… Macron added that he now feared the EU could no longer rank the US as a reliable partner in safeguarding western values. “What’s happening today with Trump’s first statements and choices is extremely serious and worrying,”…
…Michel Barnier…
A European commission spokesman declined to comment on Barnier’s private views. He repeated the organisation’s official position that the UK is not legally permitted to negotiate on the detail of future trade deals while still under treaty obligations with the EU. …
…the chancellor, Philip Hammond, insisted the UK would abide by its obligations to wait until it withdrew from the EU. …

British Alignment With Trump Threatens European Order (1/26/2017) | @Max_Fisher @nytimes
… “The people at the top of our system, whether they’re politicians or officials or journalists or think tankers like me, we’re all totally focused on Brexit,” said @CER_Grant @CER_London. “We haven’t thought about Trump as much as we should have.”. …
“The British debate on Trump is over very trivial stuff, like who Trump spoke to before May, and the German debate is over the future of the liberal order in the West,” said @markhleonard @ecfr. …
…Mr. Trump offered to reward Britain’s exit from the European Union with a speedy trade deal. But this risks encouraging more exits from the bloc and possibly its disintegration. …
“If America eases up on Russia, Britain will be under heavy pressure to pick the United States, not to side with Merkel,” said @RobinNiblett @ChathamHouse. …
Jeremy Shapiro @ecfr… …said he had been unable to convince British officials that Mr. McCain, whom Mr. Trump has publicly mocked, was an unlikely savior.
Lawrence Freedman, emeritus professor of war studies @KingsCollegeLon… “There isn’t a Plan B,”…
Mrs. May is only barely holding together the governing Conservative Party, leaving her overwhelmingly focused on managing divisions that are mostly about Brexit and migration. …
Other European states are already preparing for the possibility that the Continent can no longer rely on Britain, Mr. Leonard said, on issues from Russia to the Iran nuclear deal to global free trade. …

Donald Trump and Theresa May caught holding hands in White House photo – It is unclear who initiated the contact (1/27/2017) | Tom Batchelor @Independent

LIVE – Donald Trump tells Theresa May: ‘Brexit is going to be a wonderful thing for your country’ as two leaders hold hands at White House | @barneyhenderson & @nickallen789 @Telegraph
… Challenged about his views on torture, Russia, banning Muslims and punishment for abortion by BBC political editor Laura Kuenssberg, Mr Trump joked to Mrs May: “This was your choice of a question. There goes that relationship.” …

Theresa May meets Donald Trump – but what does she hope to gain? (1/27/2017) | @RachelRizzo & @Jparakilas @NewStatesman
… Unfortunately, the pomp and circumstance hides the fact that this relationship will not be easy for the United Kingdom. The special relationship has always been asymmetrical – both in terms of the outright power balance and the extent to which the relationship is considered unique. But the collision of Brexit and the aggressively idiosyncratic beginning of the Trump presidency has left the UK in a much less advantageous position than normal. …
… At a time when those relationships with its closest neighbours are complicated, it is absolutely crucial that the UK’s other critical relationships can be seen as resilient and improving. …
…he will push for a trade deal written on Washington’s terms, not London’s – and May will have little leverage to push back.
In the longer term, Trump’s desire to build a closer relationship with Russia and challenge China stands diametrically opposed to Britain’s positions… …a crisis under these conditions might very rapidly put British foreign policy in an untenable position.
May is therefore in an exceptionally tricky position. She has little choice but to reaffirm the strength and importance of the US-UK relationship, and to hope that doing so will buy her influence that she can use to gently steer President Trump away from some of his more outlandish promises. …

Brexit, Donald Trump and the threat to Europe (1/19/2017) | @philipstephens @FT
… It was not until this week that Mrs May finally accepted the remorseless logic of her determination to shut out Polish plumbers and Hungarian fruit-pickers. …
Britain will cease to be a platform for foreign businesses — manufacturing and services — that want to sell unimpeded into the world’s largest market. Companies will face new barriers to trade with an EU 27 accounting for more than two-fifths of British exports. Dozens of third-country trade deals will be upended. As economic ties weaken, political relationships will wither. …
… At Mr Trump’s bidding, Mr Johnson is busy scuppering European criticism of Israel. Her Majesty Queen Elizabeth will be obliged to ready Buckingham Palace for a visit from the Trump circus.
British leaders always fret about getting on with new incumbents in the White House. The relationship is an essential pillar of national security. As the English Channel widens, the neediness looks set to grow. Mr Trump has promised a trade deal. So there would have been no harm in a little flattery. There comes a point, though, at which fawning sinks to self-abasement. …
More than half a century ago Britain bowed to US pressure and pulled out of an Anglo-French enterprise to retake control of the Suez Canal. France cried treachery. …a united Europe would be France’s revenge against the perfidious Anglo-Saxons. …

…but he’ll soon learn that this doesn’t mean May wants the overarching European project to fail. …

Theresa May needs a better defence: Mirror Politics morning briefing:The Prime Minister’s launch of a new industrial strategy is overshadowed by the row over Trident (1/23/2017) | @JBeattieMirror @DailyMirror

Hundreds of thousands of retired Britons in EU ‘may be forced to return’ (1/18/2017) | @lisaocarroll @guardian
Hundreds of thousands of elderly Britons living in Europe may be forced to return to the UK unless the government guarantees that their healthcare will continue to be reimbursed by the NHS…
Retired Britons in receipt of a British pension and their dependents can access medical treatment for free, or near free, in countries such as Spain, France and Germany, with the cost reimbursed by the UK government. Some workers posted overseas can also avail themselves of the “S1” benefit. …
Debbie Williams, who was giving evidence about Britons in Belgium, said the healthcare support provided by the Treasury could be “a dealbreaker for some people”. …
“The British government is our government,” retorted Nicolas Hatton, a French citizen and founder of the3million campaign group.

A NEW DAWN: Theresa May lands in Washington ahead of meeting with President Trump after evoking Thatcher and Reagan in historic speech to US lawmakers- Prime Minister tells leading Republicans that Brexit Britain and Trump’s America have the ‘responsibility’ to lead the world (1/26/2017) | @_NealBaker @TheSun

If UK Didn’t Leave the Single Market, What Was the Point of Brexit? (1/18/2017) | @MrRBourne @thehill @CatoInstitute
… The European Commission itself believes the single market has only raised EU-wide GDP by 2.1 percent. For the U.K., this would be less significant. …
Its proposed “Great Repeal Bill”, despite its name, will actually transcribe all existing EU law and regulation onto British statutes, meaning there’s no cliff-edge in regulatory compliance for business.
As a result, at the point of exit, U.K. firms will still be fully compliant with EU rules. …

Be careful what you wish for: a tale of two prime ministers (10/2/2016) | Richard Rose @PolStudiesAssoc


UK Vol.66 (Post-EUref #Brexit Vol.12 – Theresa May’s Trump visit)

Here are a part of articles on the visit. Excerpts are on our own.

Theresa May: UK and US cannot return to ‘failed’ interventions (w Videos; 1/27/2017) | @BBC
…@bbclaurak…
BBC diplomatic correspondent James Robbins said it was a hugely significant speech, arguably the biggest by a UK PM in the US since Tony Blair’s 1999 speech in Chicago advocating armed interventionism against dictators – something repudiated by Mrs May.
It followed comments by UK Foreign Secretary Boris Johnson to a House of Lords committee earlier that Bashar Assad should be allowed to run for election to remain in power in Syria – a complete reversal of UK foreign policy. …
Mrs May said: “We should not jeopardise the freedoms that President Reagan and Mrs Thatcher brought to Eastern Europe by accepting President Putin’s claim that it is now in his sphere of influence.” …
Mr Trump said: “When they’re shooting, when they’re chopping off the heads of our people and other people, when they’re chopping off the heads of people because they happen to be a Christian in the Middle East, when Isis (IS) is doing things that nobody has ever heard of since Medieval times, would I feel strongly about waterboarding? …
Under British law and policy, the UK military and intelligence agencies cannot join operations where someone is being tortured – or officers believe there is a risk that it may happen. …

Theresa May: America and Britain will ‘lead together again’ after Brexit and election of Donald Trump (1/25/2017) | @peterdominiczak @Telegraph
… Mrs May will present Mr Trump with an engraved Quaich – an ancient Scottish artefact – and give his wife, Melania, a hamper full of produce from Chequers including Bakewell tarts. …
The Prime Minister on Wednesday confirmed that she intends to publish a detailed Brexit White Paper after demands by Conservative Remain supporters who had been planning a Commons rebellion over the issue.
Labour was again in chaos over the issue, with suggestions that Jeremy Corbyn could allow Labour MPs to oppose the Government’s Brexit Bill in the face of a rebellion by his front bench despite he himself last week saying he would force MPs to vote for Article 50. …

Theresa May To Praise Donald Trump As She Declares Britain And US Can “Lead Together Again”: PM moves to woo Republican Congress as well as White House (1/26/2017) | @paulwaugh @HuffPostUK
… Ahead of her visit to the White House on Friday, May will use a speech to the Republican party’s Congressional ’Retreat’ conference in Philadelphia to underline historic links as well as future opportunities for cooperation on trade and security. …
“The United Kingdom is by instinct and history a great, global nation that recognises its responsibilities to the world.
“And as we end our membership of the European Union – as the British people voted with determination and quiet resolve to do last year – we have the opportunity to reassert our belief in a confident, sovereign and Global Britain, ready to build relationships with old friends and new allies alike.” …
No.10 was furious when President Obama ended his term in office by visiting German Chancellor Angela Merkel and praising her as his “closest international partner” throughout his eight years in power. …
Opponents of Brexit feared that Britain would have even less influence in the world…
However, the UK’s status as a nuclear power and one of the five permanent members of the UN Security Council, as well as its crucial intelligence and military expertise, are all being used by ministers to push for a strong global role.
Downing Street revealed that on Friday morning May will visit Arlington Cemetery in Virginia…
The PM will present the President with the gift of an engraved silver Quaich, an ancient Scottish drinking cup that is a deliberate nod to Trump’s mother and her Hebridean roots. …
Her trip to the biannual Republican event is not without controversy and some Democrats complained that it would be a “partisan visit” and a “breach of standard protocol” not to meet their party leaders too. …

How Donald Trump, Theresa May are the 2017 version of ’80s power couple Reagan-Thatcher (1/26/2017) | @khjelmgaard & @janeomara @USATODAY
… Trump spoke to nine other world leaders in the 24 hours after his election before conversing with May. The trip helps put to rest concerns within May’s ruling Conservative Party that former U.K. Independence Party chief Nigel Farage could get in the way of a strong relationship between the prime minister and Trump.
Trump had suggested shortly after his election that the anti-establishment, anti-immigration Farage should become Britain’s U.S. ambassador, an idea quickly rejected by May. …
… “Obama appeared to spend the first four years in office forging relationships with everyone else. Now we have an opportunity to reinstate what we once had.”
…Conor Burns, a Conservative Party lawmaker. …who got to know Thatcher late in her tenure, cautioned against drawing too many comparisons between Reagan-Thatcher and May-Trump. …
…Quentin Peel @ChathamHouse… “She has few friends because of her determination to push ahead with Brexit… And Trump is also, quite deliberately, alienating the world with his ‘America first’ talk.”
… Trump, too, wants a trade deal with the U.K. so he won’t be presented as this ‘terrible protectionist’ who only wants to pick fights with people.” …

Theresa May to seek special deal with Trump in White House visit: PM will shrug off concerns about new president as she pledges to rekindle special relationship and ‘lead, together, again’ (1/25/2017) | @GuardianHeather & @rowenamason @guardian
… Global trade experts have warned that Britain may gain little from a bilateral trade deal with Washington. …
May also hopes that by establishing a close relationship, she can persuade Trump to stick to his pledge of pursuing a bilateral trade deal with the UK that could be put into effect after Brexit.
But trade experts are sceptical that a deal can be negotiated quickly – and warn that the US may take advantage of its superior bargaining position as a much larger economy to force open Britain’s markets to US firms.
@AdamPosen @PIIE said: “It would require an enormous, transformative relationship with the US to make up for the decline in trade with the EU.
“For 70 years, since the second world war, the US, beyond very narrow intelligence-sharing, has always treated the UK as subservient, or wanted it to be subservient.” …
Namali Mackay @EEF_Insights said while there might be opportunities for British firms from a bilateral deal, average tariffs between the US and the EU were already low, at an average of 2%. …
Peter Mandelson…said any deal was unlikely to bring rapid benefits for the UK. …
The source emphasised the government’s belief that there was big potential for British dairy farmers and cheese-makers to export more. …@dairyuk, said its members had identified the US as a prime target market for dairy exports outside the EU – and that with 19.7% of the UK’s dairy exports to non-EU countries by value, the US is currently the most important non-EU market. However…

Theresa May suggests UK health services could be part of US trade deal – PM insists Government remains ‘committed to an NHS that is free at the point of use’ (1/26/2017) | @JoeWatts_ @Independent
Theresa May has left the door open for the greater involvement of US corporations in British healthcare as she arrives in America to lay the groundwork for a future trade deal. …
A Number 10 spokesman said later: “The NHS will never be part of a trade deal and will always remain free at the point of delivery.” …
Liberal Democrat Leader Tim Farron said: “The public were told Brexit would mean another £350m a week for the NHS, not that our health service would be opened up to US firms. …
cf. the full transcript of Ms May’s speech

Theresa May urged to confront Donald Trump over ‘return of torture’ when she flies in for talks: The President is poised to lift a ban on overseas CIA ‘black site’ prisons – as the Prime Minister prepares to meet him in America for trade talks (1/26/2017) | @Rob_Merrick @Independent
… She said Ms May had been “very clear” on the issue, adding: “We don’t condone torture or inhumane treatment in any form.”
However, the spokeswoman declined to say whether the Prime Minister would take the opportunity to raise the issue, adding: “There are going to be issues where we differ in our approach and view from President Trump.”
… Ms May declined to discuss details of her hopes for her trip to Washington, instead saying they were to “increase prosperity and bring growth”.
…“It is very simple – we want to achieve an arrangement that ensures the interests of the United Kingdom are there and are put first.”
…“I can ensure the right honourable gentleman that, in doing that, we will put UK interests and UK values first.”

Theresa May refuses to rule out private US firms taking over NHS services – Prime Minister faces repeated questions over the potential threats to public services and food standards, ahead of her talks with President Trump later this week (1/25/2017) | @Rob_Merrick @Independent
… And the SNP raised fears that such a deal will open the door to British supermarkets being stocked with meat produced in unhygienic ways currently outlawed across the EU.
The price of freer transatlantic trade will include the sale of chickens washed with chemicals – a practice in the US – critics say. …
And Ed Miliband, the former Labour leader, urged her to take along British scientists who could convince the President that climate change is “not a hoax invented by the Chinese”. …
Nick Clegg said Joe Biden, the former US Vice President, told him the US would not agree to “anything that the chicken farmers of Delaware don’t like”. …

Theresa May seeks price of Trump friendship – Five diplomatic tensions to watch for as the British prime minister visits the US. (1/26/2017) | @TomMcTague (@CharlieCooper8) @politico
… The embassy did not want May to only address the Republican gathering, worrying it would seem partisan, the source said, but it was overruled by Downing Street. The prime minister will meet Democrat and Republican members of Congress at an embassy reception Thursday evening. …
Trump’s White House sees Brexit Britain as its number one ideological ally in a world of hostile powers and multilateral stitch-ups…
…the cost of cooperation with the most unpredictable president in post-war history is unknown.
From the future of NATO to Russian relations, ISIS, global warming, trade barriers and the use of torture, Trump’s new regime may pose significant problems for the U.K.
… Here are five diplomatic tensions to watch out for during May’s trip.
Too special relationship?
…— and the disruption of a cosy elite it symbolizes for them — than May, who campaigned to remain in the EU. In Trump, May might find a friend urging her to go further than she is comfortable to.
… Wigmore joined Farage and millionaire British businessman Arron Banks…
Personal chemistry
… Above all, May is pragmatic. She kept her head down during the Brexit referendum campaign as everyone else lost theirs, and has been conspicuous since becoming prime minister in keeping her counsel on the U.S. election, despite widespread criticism in the press. …
Republican retreat
…her understanding that whatever the U.S. president says about free trade, Congress has the final say. …
… All it takes is a rebellion by a handful of Tory MPs representing rural constituencies and the trade deal could peter out into something of very little substance. …
Sir Christopher Meyer…
“I don’t think Theresa May is a naïve person, nor are the people around her,” …
NATO, Russia and ISIS
… May this week reaffirmed Britain’s commitment to Ukrainian sovereignty in its battle with Moscow. …
The real danger is not being left out in the cold of a Russian reset, but being dragged further back into the mire of the Middle East in Trump’s ramped-up war on ISIS. One of May’s co-chiefs of staff, Nick Timothy…
Nigel Farage
… He does not get why they don’t like Nigel. …

Theresa May: Brexit Britain and Donald Trump can lead the world TOGETHER – BREXIT Britain and Donald Trump-led America can lead the world together, Theresa May will declare. (1/26/2017) | MACER HALL @Daily_Express
… And Mr Trump is to show Theresa May the bust of Winston Churchill that has been returned to the Oval Office on his instructions in a symbol of his regard for Britain. …


Tennessee Vol.1


US Policy Changes Vol.53 (Hospitality Vol.3 – incl entertainment)

Here are articles on hotel industry, digital divide, et al. Excerpts are on our own.

Steady Growth Projected for U.S. Hotels in 2017 And 2018 (1/25/2017) | @1HotelNews
… “Demand has outpaced supply in terms of growth for seven consecutive years, but we expect that to change in 2017 and continue in 2018,” said @HiteAmanda @STR_Data. …
For total-year 2017, the U.S. hotel industry is predicted to report a 0.3% decrease in occupancy to 65.3%, a 2.8% rise in average daily rate (ADR) to US$127.34 and a 2.5% increase in revenue per available room (RevPAR) to US$83.20. RevPAR grew more than 3.0% for each year from 2010 to 2016. …

Travel and Hospitality Industry Outlook 2017 – An analysis of travel disruptors (w PDF) | @DeloitteCB
PDF p4
Strong economic indicators help fuel travel demand in 2017
Economic fundamentals for consumer spending are solid going into 2017. The labor market continues to strengthen. An average of 181,000 jobs were added per month in 2016. As the labor market tightens further, income growth is likely to edge up in the short to medium term. Disposable personal income was up 3.4 percent towards year end, and average hourly earnings are accelerating. For consumers, income growth is corresponding with rising asset prices. House prices crossed their pre-2008 peaks and key equity indices hit all-time highs in November. This boosted household wealth and aided consumer spending. Overall, consumer confidence remains elevated, even after the exhausting election cycle of 2016.
Projecting the influence of that election cycle on consumer spending and the broader economy, however, remains difficult. Notwithstanding, travel companies have good reason to remain optimistic. Improvements in the job market have helped boost family income for the first time since 2007, and should help the US travel industry sustain a growth rate significantly faster than GDP. The US leisure travel market notched its fourth straight year of five percent growth in 2015, reaching $341 billion. Stronger growth (closer to six percent) is projected for 2017, pushing the market closer to $381 billion by the end of 2017.
… One of the biggest challenges hoteliers will face in 2017 is sustaining growth as online private accommodation aggregators flood the marketplace with new inventory. There is little doubt that companies like Airbnb already compete head-to-head with hotels in certain segments of the market. Some of this business may be additive, as travelers take more or longer trips than they would without the option, but perhaps more importantly, private accommodations have altered consumer expectations on a fundamental level—by redefining what and where a hotel is. The hotel industry has proved to be extremely resilient during this marketplace shift. Industry forecasts project continued success, estimating a 4.3 percent gain in hotel revenues for 2017. This is phenomenal growth considering one in three US leisure travelers stayed in some form of private accommodations in 2015.

FCC Chairman Pai vows to close broadband “digital divide”: Pai voted against previous broadband expansion orders, but has plans of his own. (1/25/2017) | @jbrodkin @ArsTechnica
…against an FCC order that updated the 31-year-old Lifeline phone subsidy program so that poor people can use a $9.25 monthly household subsidy from the Universal Service Fund to purchase home Internet or mobile broadband. …
In December 2014, the FCC decided that ISPs who accept government subsidies to build rural broadband networks must provide speeds of at least 10Mbps for downloads and 1Mbps for uploads, instead of the previous 4Mbps/1Mbps standard. The move was opposed by AT&T, Verizon, and cable industry lobbyists. …
…in September 2016 he outlined a “digital empowerment agenda.” The plan included “remov[ing] regulatory barriers to broadband deployment,” changes to pole attachment rules, and “dig once” policies that install broadband conduit when roads are dug up during any road and highway construction project. …
Pai also proposed creating “gigabit opportunity zones” in areas where average household income is below 75 percent of the national median. …

Media and Entertainment Outlook 2017 – Growth opportunities and challenges in an on-demand world (w PDF & Video) | @DeloitteTMT

Predictions 2017: No Rest For The Weary In The Media Industry (11/4/2016) | @MelissaRParrish @Forbes
…four predictions…
– Big, established media companies will disrupt themselves. As consumers’ media consumption continues to both increase in the aggregate and fracture across even more devices… The AT&T/Time Warner deal isn’t the end…
– Marketers will step up to change the advertising calculus. …
– Agencies relationships will get more complicated and contentious. Revelations around fraud, kick-backs, and the commoditization of advertising tech rocked the agency world in 2016. …
– The contracting ad tech ecosystem will result in more expansive deployments. …

The State of the Media Industry 2017 (10/26/2016) | TheMediaBriefing

2016 Entertainment & Media Industry Trends: To survive the rapid transition to a direct-to-consumer future, companies across the E&M sector need an effective fan-centric strategy — or risk decline and irrelevance. (w PDF) | @DeborahBothun & Christopher A. H. Vollmer @PwC


US Policy Changes Vol.52 (Miscellaneous Vol.7 – incl values, national polity)

Here are articles on values, national polity, policies, et al. Excerpts are on our own.

Trump Could Turn Western Values Into a Facade: In an interview, Harvard professor Joseph Nye warns that Donald Trump’s “America First” posture could undermine the liberal world order. (12/8/2016) | Alexander Görlach & Constantin Weiss @SaveLiberalDemo @TheWorldPost
… The question that has changed is how we will use that power. … The maintenance of alliances and institutions ― the liberal international order ― is not clear.
…which incidentally led to the economic chaos in the 1930s. Since World War II, the U.S. has been the most significant international actor and whether that will continue under Trump is unclear.
No question, Merkel and Germany are great defenders of Western values. But… it’s essential that these values are backed up by power.
… Without U.S.-imposed sanctions, Putin surely would have gotten away with it much easier and perhaps would have continued seizing territory.
…we should not over-interpret the American election. …
…the younger voters were not in favor of Brexit at all. …the young vote didn’t embrace Trump. …we need to closely look at these numbers and realize what they represent.
…old white males. … As younger people, with higher diversity and better education, go to the polls in the future, this populism should decrease significantly.
Immigration is a much more universal problem in the international sphere. The question is how you combine native culture with immigrant culture to prevent polarization of societies. …
… Trade is driven not by agreements but by commercial entrepreneurs. We may see less large-scale trade agreements, but I don’t think protectionism will resurface.
… But again, Trump is unpredictable. …
…Western policymakers… They need to have policies that take into account the inequalities that result of trade and technological change but also need to address cultural issues. Even if you are a protectionist economy, your jobs will still be taken over by robots!
…investment in infrastructure here in the U.S., and I am a supporter of this. …
…the coal industry… …he will struggle immensely with adapting the labor market to long-term technological change…
…may surprise us with something completely unexpected. …

What Will the Next Four Years Bring? (w Video; 1/3/2017) | @whartonknows
… According to @garrett_geoff, future U.S. leaders including Trump face two big challenges. One is to “increase growth rate from 2% to north of 3%, back to where it has been historically since World War II,” and the other is to ensure that “the benefits of that growth are more widespread.” …
…@Dean_Ruger… …if Trump were to be reelected for a second term, “we might see some real doctrinal shift,” he added, referring to the possibility of three more vacancies that could arise over the next eight years.
According to @PennEngineers dean Vijay Kumar, one area that could see unkind cuts is federal funding for R&D in science and technology. He noted that such funding has been falling steadily even with the 2008 stimulus by President Obama. Further, he pointed out that federal funding for R&D is currently only 0.6% of GDP, a far cry from the 2% during the “Sputnik Era” of the 1950s through the 1970s…
Infrastructure Investments
… First, he suggested there should be a balance between public and private sector investments.
Second, Garrett emphasized the need to focus on longer-term productivity gains and not just on job creation in the short-run. … Third, he had concerns about how the Trump infrastructure plan would be funded. …
Health Care, Immigration Reforms
… After a statute is passed to change the ACA, the government might allow a two-year period for people to continue to get health insurance from state exchanges before an alternative system is put in place, predicted Ruger.
… Many companies try to game the system and corner as many as possible of the 65,000 H-1B visas the U.S. issues annually to foreign workers…
Climate Change and Reality
… The cost of energy generation will be less than the cost of energy distribution, which means we will all produce our own energy.”
… EPA regulations have been codified and have gone through formal rule-making processes, and they can be undone only with another round of formal rule-making…
Engaging with Asia
Trump has blamed international trade agreements for U.S job losses, but the role of technology is three times as important as globalization in its impact on lower skilled jobs…
Understanding Job Losses
… “Manufacturing productivity over the last 30 years has gone up by a factor of two, both as a fraction of the GDP and in terms of the overall value created in society.” …
… “At the beginning of the last century, every farmer fed three other mouths. At the end of the century, every farmer was feeding 200 other mouths.”
Learning from the Election
…the Democrats haven’t won the white male vote since 1968, and the Republicans haven’t won the female vote since 1988. …
…@MauroFGuillen…while real wages for Americans across all segments of the income distribution rose steadily in the 30 years between 1970 and 2000, they had flattened between 2000 and now.
Tempering Action
…the framers of the U.S. Constitution such as James Madison and Alexander Hamilton infused a healthy dose of “cynicism and distrust” that helped avoid a concentration of power with the President and shared powers between the executive branch, Congress and the Supreme Court. …
Ronald Reagan Part II
…the Penn Wharton Budget Model, which predicts that Trump’s tax plan will boost the economy in the short run but also increase debt in the long run.
…an increase in the number of people with coding skills would reduce the supply-demand mismatch for good jobs…
… “Think about expanding the pie. Of course, you have to think about how the pie is divided, but everybody is better off [if] the size of the pie [is bigger].”
In order to get there, the emphasis must be on higher education, vocational skills and training, said Garrett. Countries like Sweden, Germany and Norway have adopted that approach to good effect. …

Is America at its greatest what Trump has in mind? (12/29/2016) | David Ignatius @washingtonpost
… Americans are optimists, by birth or affirmation. We pledge allegiance to a country that is “indivisible, with liberty and justice for all.” We believe in “And the Fair Land,”…“We can remind ourselves that for all our social discord we yet remain the longest enduring society of free men governing themselves without benefit of kings or dictators. Being so, we are the marvel and the mystery of the world.”
… President-elect Donald Trump proposes radical changes welcomed by his supporters but feared by many who voted against him. He won’t succeed if he drives the country to the breaking point.
This coming year, the United States will face the severe strains that accompany change and political division. We’re a soft target for our adversaries right now…
… We’ll find out in 2017 how healthy our body politic really is, and whether our democratic institutions remain resilient. …

Conservatism: What now? (w Video; 11/29/2016) | @arthurbrooks,@JonahNRO,@RichLowry,@RameshPonnuru @AEI

Everything you need to know about a presidential transition in three easy charts (12/12/2016) | @EKamarck @BrookingsInst
…as the inside-the-beltway saying goes, “personnel is policy.” …
…“Presidential Transition Guide”… …Paul R. Lawrence and Mark A. Abramson…“Succeeding as a Political Executive”… Figure 1…but these 4,115 positions (some of which are support positions only) are but a small fraction of the 4,185,000 people who work for the federal government and who are not hired and cannot be fired by the President.
Figure 2
Figure 3

COVERING POLITICS IN A “POST-TRUTH” AMERICA | Susan Glasser @BrookingsInst

A reality check on 2016’s economically marginalized (11/16/2016) | @JohnHudak @BrookingsGov

Has a presidential election ever been as negative as this one? (10/18/2016) | @EKamarck @BrookingsInst

Should you believe the polls? (9/22/2016) | Liz Sablich @BrookingsInst


US Policy Changes Vol.51 (Miscellaneous Vol.6 – inequality and democratic responsiveness)

Here is an academic paper: Inequality and Democratic Responsiveness: Who Gets What They Want from Government? (PDF; Aug 2004) | Martin Gilens @PUPolitics @HarvardWCFIA. Excerpt is on our own.

Previous research
Quantitative analyses of the link between public preferences and government decision making have taken three main forms… The most prevalent approach, often labeled “dyadic representation,” examines the relationship between constituency opinion and the behavior of representatives or candidates across political units… This work typically finds strong correlations between constituents’ preferences and legislators’ voting behavior.
A second approach examines changes over time in public preferences and the corresponding changes (or lack of changes) in public policies. …fairly high levels of congruency between the direction of change in opinion and the direction of change in government policy, especially for salient issues or cases with large changes in public preferences.
Finally, using a third approach… …public preferences for policy change expressed at a given point in time with subsequent changes (or lack of changes) in government policy… …substantially higher levels of consistency between public preferences and government policy for issues that the public deemed more important… …an extremely strong influence of public mood on policy outputs…

Limitations of research on democratic responsiveness
… Even if individual legislators’ votes strongly reflect the preferences of their constituents, actual policies may not coincide with aggregate preferences. … policies are shaped by the complex interactions among multiple units of government, by the congressional committee system, by the degree of autonomy granted to the various federal agencies, and by many other characteristics of our governmental structure. …
The second approach… For example, if public support for increasing environmental regulation declined from 90% to 75% over some time period, we might conclude that support for environmental regulation weakened. But if actual regulation was reduced during this period, it would clearly be contrary to, not consistent with, the preferences of the public.
The third approach… …the possibility of spuriousness. … Increases in defense spending following the Soviet invasion of Afghanistan may have coincided with increased public support for defense spending. But lawmakers were likely responding to some combination of public preferences and real-world events, and it is extraordinarily difficult to assess the relative importance…
Finally, it is important to acknowledge that surveys of public preferences are at best imperfect measures of what the public wants from government. One important limitation is the willingness of respondents to express opinions even about issues on which they have no clear or consistent views. … …government responsiveness to public preferences is much lower for questions which elicit large numbers of “Don’t Know” responses.
… First, public opinion may be “uncrystalized” about a new or unfamiliar issue. …latent opinion represents something like “what the public would prefer after having considered the issue more fully.”
A second… For example, the public might express support for humanitarian intervention abroad. But… A policy maker attempting to respond to public opinion would need to take both current expressed support, and latent potential opposition into account.
… For our purposes, it is important to recognize that democratic responsiveness is a subtle phenomenon and that…

Assessing inequalities in democratic responsiveness
…an aspect of democratic responsiveness largely ignored in previous work: whose preferences are influential in shaping government policy.
While the notion of “equal representation” is a central element of normative democratic theory, there are good reasons to expect that different sub-groups of the population will be more or less successful at shaping government policy to their preference. …

The current project
…further explore biases in government responsiveness to public preferences asking how successful different population sub-groups are in shaping government policy and how such differences have changed over time, across issue-area, or in response to changing party control of national political institutions. …

Data

Imputing preferences by income, education, or age level
Because the surveys employed were conducted by different organizations at different points in time the demographic categories are not always consistent. …

FINDINGS
Consistency versus influence
… For example, a policy change opposed by 51% of the public and one opposed by 99% of the public would both be inconsistent with public preferences, but the latter clearly represents a greater failure of policy to reflect public preferences.
Overall relationship between preference and policy
… A strong status-quo bias is evident among these 754 proposed policy changes: even policy changes favored by 90% of Americans occurred only 4 times in 10…
Salient and non-salient issues

INCOME AND THE PREFERENCE-POLICY LINK
Policy agreement and disagreement across income levels
… Consequently, the association between government policy and the preferences of poorer Americans may arise not due to these citizens’ influence on government outcomes but to the fact that poor and wealthy Americans share policy preferences most of the time. …
On the other hand, among the 300 questions where preferences differ more strongly by income level, policy outcomes are unrelated to preferences among the poor, and highly related among the rich…
…poor people might hold attitudes that consistently differ from those held by middle-income or wealthy Americans, and if so the lack of responsiveness to their preferences might actually reflect a well-functioning democracy. Middle-income respondents might better reflect the preferences of the median voter on most issues and the responsiveness of government policymakers to the preferences of these Americans might therefore serve as a more appropriate test of biases in representation. …

DIVERGENT POLICY PREFERENCES OF RICH AND POOR
Economic policies
“Pure” economic policies. …rich and poor in the aggregate appear to express preferences that reflect their groups’ differing economic self interest.
Foreign economic policies. … On free trade… rich Americans express solid support while the poor are mildly opposed.
…U.S. aid to developing countries and to Russia and the former Soviet Union. On these questions, the rich expressed solid support while the poor were equally strong in their opposition. …
Health care. … The poor, for example, were strongly supportive of tax funded national health care (in the abstract at least), employer mandates, and government guarantees of universal health care. The rich were only mildly supportive these first two proposals, but shared the poor’s enthusiasm for the last. …
Social security. …the two reform proposals with the clearest redistributive implications (increasing the tax on Social Security benefits of higher income retirees and raising the retirement age) produced no differences in support between rich and poor. On the other hand, directing the government to invest part of the Social Security surplus in the stock market was strongly opposed by poor Americans while the rich were evenly split. …
Welfare reform. …rich and poor expressed equal (and enthusiastic) support: work requirements, job training, child care, and time limits for welfare recipients. The rich were supportive of cutting overall spending in contrast to the poor (who were evenly split), while the rich similarly expressed solid support for eliminating increases in benefits to women who have additional children while on welfare (the poor were again split on this proposal). …

Social issues
Civil rights. … The rich and poor differ most dramatically when asked about affirmative action for individual hiring, promotion, or college admissions. …
Homosexuality. …rich Americans expressed somewhat higher levels of support for gays and lesbians including a slight tendency toward allowing gays to serve in the military, somewhat stronger support for extending legal protections (for example, against job discrimination), and somewhat lower levels of opposition to gay marriage than poor Americans. …
Abortion and school prayer. Rich Americans expressed substantially greater support for abortion and less support for school prayer than did the poor. …
Campaign finance reform. … Rich Americans differed more substantially from the poor over public financing of elections, expressing mixed views in contrast to the solid opposition of the poor.

Summary of divergent policy preferences
… Without exception, when differences between the rich and poor did emerge, the rich favored more conservative policies. However, it is important to point out that rich Americans did support many policies that would be expected to disproportionately benefit the poor. …
… Many other policy areas in my data set produced few systematic differences between the preferences of the rich and the poor, including defense policy, drug policy, education, gun control, terrorism, and crime. …

Causal inference
… The link between public preferences and government policy might arise through some combination of (1) the influence of the public’s preferences on political decision makers’ actions, (2) the influence of decision makers’ statements on the public’s preferences, and (3) the response of both decision makers and the public to “real world” events and conditions. …
… If the cross-state association between high income constituents’ views and senators’ votes is due primarily to the influence of the public on elected officials rather than the other way round, then the broader association between the public’s preferences and government policy outputs is also likely to reflect the influence of high income Americans on elite decision makers.
… If the primary path of influence is from public preferences to government policy, we might expect income to be the stronger moderator… …if the primary causal path is politicians shaping the public’s preferences or attentive citizens responding to changing conditions and events, we might expect education to be the stronger moderator…
…the association between policy outcomes and the preferences of high income Americans declines only modestly when we control for the preferences of those with high levels of education… …biases in government responsiveness across income groups primarily reflect something other than interest in or attention to politics.
For example, a study of donations to congressional candidates in 1996 found that four-fifths of donors who gave $200 or more had incomes in the top 10% of all Americans… Since not only the propensity to donate but the size of donations increases with income level…
…a government that is democratic in form but is in practice only responsive to its most affluent citizens is a democracy in name only. …
Most Americans think that public officials don’t care much about the preferences of “people like me.” Sadly, the results presented above suggest they may be right. …


US Policy Changes Vol.50 (Infrastructure Vol.5 – water)

Here are articles on water. Excerpts are on our own.

Investing in water: Comparing utility finances and economic concerns across U.S. cities (12/14/2016) | Joseph Kane @BrookingsMetro
cf. https://twitter.com/_WorldSolutions/status/820261737555324928
SUMMARY
INTRODUCTION
Understanding water investment challenges at the city level
Comparing water investment across different cities
– Only a handful of drinking water utilities in the largest cities nationally rank highly across six major categories of water finance and related economic indicators.
– More than three-quarters of large drinking water utilities are able to cover their operating expenses each year.
– Many large drinking water utilities carry high levels of long-term debt—up to 96 percent of the value of their current assets—making it difficult to accelerate new capital investments.
– On average, large drinking water utilities are charging higher rates to cover needed costs, although the specific rates can vary widely from city to city.
– Many cities with large drinking water utilities are experiencing gains in income and population, but they are still struggling to balance affordability concerns, particularly for lower-income households.
Exploring potential strategies and innovations
CONCLUSION

The aging water infrastructure: Out of sight, out of mind? (3/21/2016) | Patricia Buckley, Lester Gunnion, Will Sarni @DU_Press
… The number of water main breaks across the country, from Syracuse to Los Angeles, is staggering: 240,000 per year… The direct cost of these leaks is pegged at $2.6 billion per year. … The American Society of Civil Engineers estimates that, while the cumulative cost to households from degrading water/wastewater infrastructure will add up to $59 billion (in 2010 dollars) over the period between 2013 and 2020, the cost to business will be more than double that, at $147 billion.
EVOLUTION OF THE SYSTEM
SAFEGUARDING THE WATER SUPPLY
[The problem with lead]
THE ISSUES: AGING, FUNDING, PRICING
… The AWWA estimates that the cost of restoring underground pipes will total at least $1 trillion over the next 25 years, without including the cost of constructing new infrastructure or repairing treatment plants. Separately, the USEPA’s 2011 Drinking Water Infrastructure Needs Survey and Assessment (DWINSA) estimated that the United States will require $384 billion in capital investment over the next 20 years to ensure that drinking water standards are in compliance with the Safe Drinking Water Act. … …the USEPA’s 2012 Clean Watersheds Needs Survey estimates that $271 billion in capital investment will be needed over the next 20 years to address water-related health problems and ensure that watersheds are compliant with the Clean Water Act.
… In 2012, most Americans paid less than $3.75 per 1,000 gallons of safe water. … …even though US water prices increased by 41 percent between 2010 and 2015,32 the average US household spent just $530 on water in 2014—only about 20 percent of the average amount spent on gasoline ($2,468).
… One of the most commonly proposed solutions for recovering costs is by shifting a greater degree of cost recovery to fixed fees from usage-based fees. …
… In December 2015, for instance, the US Congress passed a five-year, $305 billion transportation bill that, among other things, lifted a ban on the issuance of tax-exempt bonds with loans for projects under the Water Infrastructure Finance and Innovation Act (WIFIA). …
[Water prices worldwide]
THE PATH FORWARD
… With regard to innovative funding, we have seen the emergence of green bonds, such as the 100-year bonds used by DC Water, and public-private partnerships, such as that in Bayonne, New Jersey. …

A Tale of Two Public-private Partnership Cities (6/10/2015) | @whartonknows
… The water came from reservoirs 50 miles northwest of the city, delivered through an outdated aqueduct in need of frequent repair that the city could ill afford. Like many other cities, Bayonne had deferred maintenance on its water systems. Its excessive debt burden led to a poor credit rating that made further borrowing more expensive. …
Bayonne’s sewer system, pumping an average of 8.3 million gallons of wastewater daily, had similar challenges, including outdated infrastructure…
… Only a few months after Sandy…a joint venture partnership for both water and wastewater operations with Kohlberg Kravis Roberts (KKR) funding 90% of the effort with United Water, a unit of French giant Suez Environnement S.A.
… In 2013, Moody’s Investor Service upgraded Bayonne’s bond rating from Baa1 with a negative outlook to Baa1 with a stable outlook, in particular citing the city’s recent progress in reducing its debt burden through the lease-sale of the MUA operations.
KKR and United Water further pledged to funnel another $157 million into the water systems over the 40-year length of the contract, with about $2.5 million a year earmarked for maintenance and upgrades. …
… “We receive $2.5 million per year, which is a nice chunk of money guaranteed. What the partnership does is remove the need for political will for the maintenance of the system. …
…@foodandwater…
…“Private Equity, Public Inequity,”…
…@NWFinancialGrp…
…the city could save almost $35 million over its 40-year contract, compared to operating the water utilities on its own. …
A Private Sector Lifeline for Rialto
… According to “Private Capital, Public Good,” a research paper from the Brookings Institution, Rialto’s “historically underfunded system also struggled to meet pension liabilities, which were starting to weigh on the utility’s ability to affordably raise capital in the tax-exempt market.” …
…state revolving loan funds and municipal bond financing often have not been sufficient to meet local needs. …
In 2013, Rialto entered into a 30-year, $300 million public-private partnership (P3) agreement with Veolia Environnement S.A.’s Veolia Water as the operator of the project. Ullico, a labor-owned insurance and investment company, was the lead finance partner, along with Table Rock Capital. …

The Path to Water Innovation (PDF; Oct 2014) | Newsha K. Ajami, Barton H. Thompson Jr., David G. Victor @hamiltonproj,@StanfordWoods
Abstract
… Today, it provides sufficient water to support over 315 million people, almost 55 million acres of irrigated farmland, and a $16 trillion economy. …
… Yet, in comparison to the electric power sector, investment in water innovation is extremely low. …
… Among the main management and policy barriers are (1) unrealistically low water pricing rates; (2) unnecessary regulatory restrictions; (3) the absence of regulatory incentives; (4) lack of access to capital and funding; (5) concerns about public health and possible risks associated with adopting new technologies with limited records; (6) the geographical and functional fragmentation of the industry; and (7) the long life expectancy, size, and complexity of most water systems. …
We focus on several recommendations: (1) pricing policies that would both better align with the full economic cost of supplying water and decouple revenues from the volume of water supplied; (2) regulatory frameworks to create an open and flexible governance environment that is innovation friendly and encourages valuable new technologies; and (3) financing and funding mechanisms, such as a public benefit charge on water, that can help raise sufficient funds to implement innovative solutions.

Chapter 1: Introduction
…almost 40 percent of the pipes used in the nation’s water distribution systems are forty years old or older, and some key infrastructure is a century old. On average, about 16 percent of the nation’s piped water is lost due to leaks and system inefficiencies, wasting about 7 billion gallons of clean and treated water every day…
… Research and development (R&D) is a public good that is likely to be suboptimal in scale without public financial support…
… First… Improper water pricing undercuts both the incentive for water-conserving technologies by water users and the financial stability needed to finance the adoption and implementation of new water technologies by the water suppliers. …
Second… …many current regulations frequently hinder the adoption of cost-effective technologies.
Third, we call for a public benefit charge on water to allow for more public funding for water innovation.

Chapter 2: Background
THE WATER SECTOR
FIGURE 1. Water Distribution and Use Cycle
…155,000 drinking-water systems and 15,000 wastewater systems exist…
… While private water suppliers still outnumber public suppliers in the United States, public suppliers today furnish water to about 80 percent of the nation’s domestic and commercial users and almost 20 percent of its industrial users. …
Public water entities are seldom subject to regulation by state public utility commissions. As a result, local political processes provide the principal oversight of public water suppliers. …
COMPARISONS TO THE ENERGY SECTOR
… First…
Second…
…the nature of ownership. …
…state-owned enterprises (SOEs)…
FIGURE 2. Comparison of U.S. Patents Filed under the Patent Cooperation Treaty for Clean Energy and Water Purification, 1999–2011

Chapter 3: State of Innovation in the Water Sector
…53 percent of the water sector’s capital spending goes to system expansion, followed by 37 percent for replacing existing infrastructure and 10 percent for compliance. …
INNOVATION FRONTIERS IN THE WATER SECTOR
FIGURE 3. Size of the Major International Water Markets, 2010
… First, water managers assumed that demand for fresh water would increase with population and that the only way to ensure a balance between supply and demand was to find new sources of supply. …
… Water managers, moreover, generally looked to large-scale, centralized infrastructure projects to increase supply, on the assumption that large-scale projects would generate significant economies of scale and provide greater operational flexibility…
… Finally…if they designed water systems to meet current hydrologic conditions, those systems would also meet future conditions. …
1. Supply enhancement. …technologies that promise more-drought-resistant water supplies, such as reclaimed water or desalination; or that can reduce energy use, such as recycling technologies that extract significant energy from wastewater… …technologies that allow more-localized resource enhancement strategies, such as rainwater and storm water capture, and small-scale water reclamation.
2. Demand management. …technologies that encourage or enable water-use efficiency…or water conservation… Examples range from water-efficient appliances to drip irrigation to smart irrigation controllers. …smart meters…
3. Governance improvement. … Smart metering and advanced data collection methodologies…
These three categories cover a wide variety of technological innovations including:
• Smart water.
• Efficiency and conservation.
• Purification.
• Alternative sources.
• Storage (surface and ground).
• Groundwater.
EVALUATING PATTERNS OF INNOVATION IN WATER AND CLEAN ENERGY
Innovation Indicators: Investment Trends
…clean energy and water…
… In the United States, investments are dominated by venture capital activity in both sectors, but especially in the water sector where venture capital and corporate ventures account for 53 and 24 percent, respectively, of total investment dollars (figure 4b). By comparison, investment banking is the largest global contributor to both clean energy and water, at 31 and 27 percent, respectively, of total investment dollars (figure 4a).
… The United States accounts for approximately 50 percent of global investment deals in both the clean energy and water sectors…
… There were 4,193 venture capital deals for clean energy, raising $20 billion at an average of $4.8 million per deal. By contrast, 372 deals raised $800 million in venture capital for the water sector, at an average of $2.2 million per deal…
FIGURE 4. Sources of Investment Dollars for Global and U.S. Innovation in the Clean Energy and Water Sectors, 2000–13
Venture Capital Investment
FIGURE 5. Number of Deals and Relative Contribution of Investment Types for Global and U.S. Innovation in the Clean Energy and Water Sectors, 2000–13
FIGURE 6. Global and U.S. Investments in Clean Energy and Water by Venture, Corporate and Corporate Venture, and Public Sources, 2000–13
Corporate Investment
… First, some corporations might be seeking to improve their own internal operations. … Second, corporations might be looking for new market opportunities. …
FIGURE 7. Number of Patents Relative to Market Size for Solar and Wind Power Industry, 2000–11
Public Investment
…in the United States the clean energy sector has benefited from about $8 billion in public investment over the past thirteen years, while only $28 million in public dollars has gone to the water sector over the same period. …
Innovation Indicators: Patents
FIGURE 8. Patent Filings with Patent Cooperation Treaty for Water Purification and Clean Energy by Country, 1999–2011
FIGURE 9. Number of U.S. Patents Filed in the Clean Energy and Water Subsectors, 1999–2012

Chapter 4: Explaining Patterns of Innovation
PRICING PRACTICES
FIGURE 10. Tariff Price and Domestic Use per Capita, 2012
The pricing of water in the United States affects innovation in several ways. First, it reduces the revenue available to water suppliers to invest in innovation. …
…about 16 percent of the treated water in the United States is lost to leaky pipes and system inefficiencies. This translates to 7 billion gallons of clean water per day that is produced without generating any revenue for the water service providers…
…about 30 percent of the water in the United States falls under the category of nonrevenue water, meaning water that has been extracted, treated, and distributed, but that has never generated any revenue because it has been lost to leaks, metering inaccuracies, or the like…
Second…the extraction of water from a river or stream can have significant environmental costs. Because prices do not reflect such costs, however, analyses to decide whether to extract additional water for a growing city or to invest instead in water recycling and reuse…
Third, the underpricing of water can undercut incentives that water users would otherwise have to invest in new technologies to reduce water use. …
FIGURE 11. Relative Capital Investment to Revenue Ratio for Several Utility Services
… States with the highest electricity costs—such as Hawaii and California—have seen the most active programs to advance wind, solar, and other forms of renewable electricity. …
REGULATIONS
…(1) ensuring a significant market for recycling technology, (2) encouraging the diffusion of such technology, (3) enabling the refinement and improvement of recycling technology through actual use, and (4) driving the development of less-expensive recycling technologies.
TABLE 1. Regulatory Drivers and Barriers to Adoption of Water-Recycling Innovations
FIGURE 12. Importance of Industry Issues, 2012
LACK OF ACCESS TO CAPITAL

Chapter 5: Infusing Innovation into the Water Sector
IMPROVE WATER PRICING POLICIES
FIGURE 13. Number of Clean Energy Patents and Price of Electricity, 2001–11
BOX 1. California’s Decoupling Experience
DEVELOP INNOVATION-FRIENDLY REGULATION
…each state conduct a systematic review of its regulatory practices relating to the water sector. …:
• State legislators and regulators should avoid geographically inconsistent regulations. …
• Legislators and regulators also should consider crosssector impacts when adopting new regulations. …
• State regulations should provide sufficient flexibility to avoid blocking the timely adoption of new and innovative technologies. …
• State legislators and regulators should consider the appropriateness of rules that encourage the adoption of new technologies. …
INSTITUTE A MECHANISM FOR RAISING PUBLIC FUNDS FOR INNOVATION
FIGURE 14. Governance Structure of Public Good Charge for Electricity in California

Chapter 6: Conclusion

Chapter 7: Questions and Concerns
How can states and local agencies be encouraged or incentivized to implement the proposed reforms?
Would states need to build additional capacity or provide additional funding for these reforms?
Should there be a mandate for these pricing reforms?
What will be the potential obstacles or resistance to these reforms?
• Salience.
• Financial Impacts.
• Complexity.


US Policy Changes Vol.49 (Foreign Policy Vol.8)

Here are articles on foreign policy. Excerpts are on our own.

“A Blueprint for Donald Trump to Fix Relations with Russia” – A policy memo to the president-elect. Priority: High (12/18/2016) | Graham Allison & Dimitri K. Simes @TheNatlInterest
… Russia today offers your administration not only a serious challenge but a significant opportunity.
First and foremost, Russia remains the only nation that can erase the United States from the map in thirty minutes. Second, Russia is key to preventing nuclear terrorism as well as proliferation of other weapons of mass destruction and missile-delivery systems. Third, Russia’s decisions on whether to share intelligence, or withhold it, significantly affect odds of preventing attacks by terrorists on U.S. citizens and assets across the world. Fourth, Russia is the largest country on Earth by land area, bordering China to the East, Poland in the West, and the United States across the Arctic. … Fifth, Russia’s Soviet-era scientific establishment and post-Soviet achievements make it a global leader in science and technology, particularly in high-tech military hardware. These talents allow it to mount formidable cyber capabilities, second only to the United States… Sixth, Russia is prepared to fight: it has demonstrated both the capability and the will to use military force to achieve its objectives… Seventh, Russia’s potential as a spoiler is difficult to exaggerate? from selling advanced systems like S-300 air defenses to Iran to aligning militarily with China.
…we suggest you remind everyone of the mantra under which both Democratic and Republican presidents fought the Cold War. It affirmed that Americans’ primary purpose in the world was to “preserve the United States as a free nation with our fundamental institutions and values intact.” To that end, they set about building a new world order aimed at advancing the cause of peace, prosperity and freedom for all: for Americans, their allies and other nations, in that order. While some now see that hierarchy as shortsightedly selfish or unworthy of a great power, the brute fact is that the survival and success of the United States is the essential prerequisite for American power to be applied to achieve any other objective in the world. …
… Each left office with the relationship in worse condition than when he arrived. President Obama began by announcing a “reset” in relations with Russia to secure Moscow’s cooperation on a number of priorities, including his vision of a world free of nuclear weapons. As his term ends, U.S. and Russian aircraft are operating in close proximity, attacking targets in Syria with minimum communication and no coordination. … For the first time since the 1980s, military planners on both sides have been reexamining options that include the actual use of nuclear weapons. …
… We share the president’s judgment that American national interests do not justify that level of expenditure of American blood and treasure. Rather, the point is that successful strategy requires aligning ends and means. …
…two narratives. On the one hand, it claims that Russia is a loser who “doesn’t matter anymore,”… On the other hand…in its final years, when facing intractable international problems, Obama’s instinct has been to “blame Russia first.” …
…what Obama’s “or” really means is that Putin’s Russia should repent, reverse course, and follow in the footsteps of Germany and Japan in accepting its place in a unipolar, American-led international order. … Russia is too big, too powerful and too committed to maintaining its sovereignty as a great power to become a supplicant in an American-dominated world order. …
Kissinger’s alternative…is to seek to integrate Russia into an international order that takes into account Moscow’s minimum essential interests. That would begin with recognition that Russia remains a great power with sovereign interests and from there explore “whether their concerns can be reconciled with our necessities.” Critically, this would mean treating Putin personally as the strong leader of a major power he clearly is…
THE OBJECTIVE of American policy… Rather, it is to advance vital U.S. national interests. As seen during Obama’s second term, when treated primarily as a “foe,” Russia can undermine important American objectives. If it can be persuaded to act more as a partner, within the framework of a sustainable, if difficult, working relationship, Moscow can help advance U.S. foreign-policy objectives in a number of ways.
First, productive relations between Russia and the United States are essential to avoiding war, including nuclear war. …
… Hard as it is to imagine from Washington, Russia’s national-security establishment has become seriously alarmed about what it sees as American developments and plans to undermine its nuclear deterrent. … President Putin…“I would like to emphasize that attempts to break strategic parity are extremely dangerous and can lead to a global catastrophe. …
Russian planners’ response to this fear has been to lower the threshold for their own use of nuclear weapons…in what they call hybrid warfare. …“escalatory deescalation”: if they were losing a conventional conflict in, for example, Ukraine or the Baltics, they would conduct a limited nuclear attack aimed at “deescalating” the war. …
Second, U.S.-Russia cooperation can advance both nations’ counterterrorism goals, including the wars against ISIS and Al Qaeda. …
Third, Russia is also uniquely suited to help prevent both terrorist organizations like ISIS and Al Qaeda and state actors from acquiring nuclear weapons. …
Fourth, U.S. strategic interests require preventing an alliance or even alignment between Moscow and Beijing. …
EVERYONE KNOWS that Russia is a dangerous, difficult, often disappointing state with which to try to do business. …
As the first step in crafting of such a policy, we recommend that your administration develop a clear hierarchy of American priorities. …
Second, in this spirit you should prepare carefully for an early one-on-one meeting with Vladimir Putin to change the dynamics in the relationship. …
Third, your meeting with Putin should be followed by revival of government-to-government dialogue with Russia, beginning with ways to prevent an accidental war between the United States and Russia, including nuclear war. …
Fourth, you should change the overall U.S. approach toward the Syrian conflict. …
Fifth, though you have previously expressed skepticism about greater U.S. involvement in resolution of the Ukraine conflict, we believe you should join the efforts of European powers to find a solution, if only because this conflict also risks military confrontation with Moscow. …
…Kissinger remained optimistic about “the possibility of some cooperation between the West and Russia in a militarily nonaligned Ukraine.” …
… To demonstrate its strength, America should use military deployments and private warnings (so as to avoid publicly cornering Putin) to communicate to Moscow that unilateral solutions will not work in either Syria or Ukraine. …
Sixth, you should strengthen U.S. military capabilities in ways that simultaneously dissuade Russia from aggression (both overt and covert) against NATO allies in Europe and respect Russia’s legitimate interest in ethnic Russians living in the former Soviet Union. …
… Combining investment in U.S. capabilities with calculated use of your reputation for unpredictability could be particularly useful, much as Nixon cultivated the image of a “madman” to enhance his leverage in Southeast Asia. …
Accordingly, the United States should reiterate its commitment to defend the Baltic states from naked aggression, in concert with other allies, but insist that the Baltic governments themselves attempt to normalize relations with Moscow…
Seventh… We suggest treating Russia the way the United States treats other undemocratic nations with whom it is friendly, such as Saudi Arabia.
Eighth…give greater consideration to Russia’s possible and likely responses in making policy decisions. …
Ninth, you should seek ways to expand the economic foundation of the bilateral relationship. …
Last but not least… for your sharp turn in policy to succeed, you will need to make your case directly to the American people—something you have done many times during the campaign. …

The Kindleberger Trap (1/9/2016) | @Joe_Nye @ProSyn
…“Thucydides Trap,”… …seems too weak rather than too strong.
Small countries have little incentive to pay for such global public goods. Because their small contributions make little difference to whether they benefit or not, it is rational for them to ride for free. …
…not to overthrow the liberal world order from which it benefits, but to increase its influence within it. …
…in 12 of 16 cases since 1500…
…Donald Kagan… Before the war broke out in 431 BC, the balance of power had begun to stabilize. Athenian policy mistakes made the Spartans think that war might be worth the risk. …

A Conservative’s Prescriptive Policy Checklist: U.S. Foreign Policies in the Next Four Years to Shape a New World Order (PDF; Jan 2017) | Amb. Robert D. Blackwill @BelferCenter
(cf. abstract | @BelferCenter)
Vital U.S. National Interests
U.S. Policy Prescriptions For The Period Ahead
General
U.S. Alliances/Partnerships
The Greater Middle East
Adversaries
Latin America and Sub-Saharan Africa
Nuclear Proliferation
U.S. Energy Exploitation and Climate
Cyber
International Organizations
…the next several years of U.S. foreign policy will be laden with crises. With America’s international position fundamentally weakened during the Obama presidency and given Trump’s unorthodox approach to the major external issues facing the United States, both U.S. allies and adversaries will test the new President’s strategic vision; the purpose, clarity and consistency of his policies; and the quality of his diplomacy. …


US Policy Changes Vol.48 (Healthcare Vol.4)

Here are articles on healthcare. Excerpts are on our own.

Repealing Federal Health Reform: Economic and Employment Consequences for States (1/5/2017) | Leighton Ku, Erika Steinmetz, Erin Brantley, Brian Bruen @commonwealthfnd
see Exhibit 1~5
Findings and Conclusions: Repeal results in a $140 billion loss in federal funding for health care in 2019, leading to the loss of 2.6 million jobs (mostly in the private sector) that year across all states. A third of lost jobs are in health care, with the majority in other industries. If replacement policies are not in place, there will be a cumulative $1.5 trillion loss in gross state products and a $2.6 trillion reduction in business output from 2019 to 2023. States and health care providers will be particularly hard hit by the funding cuts.

The problems with ‘repeal and delay’ (1/3/2017) | @joeantos @AEI
…plan to move quickly to repeal the Affordable Care Act (ACA) in the early weeks of 2017, with a delay in the date of when key aspects of the repeal would become effective until perhaps 2019 or 2020. …
…too much risk of unnecessary disruption to the existing insurance arrangements upon which many people are now relying to finance their health services, and…unlikely to produce a coherent reform…
Possible Legislative Scenario
… Congressional leaders have mentioned using H.R. 3762 from the just-completed Congress as the blueprint for what they plan to do in the new year. H.R. 3762 was passed early in 2016 (and then vetoed by President Obama) using the budget reconciliation procedure, which allowed it to be approved in the Senate with a simple majority vote. …
… Only provisions that directly change taxes or entitlement spending can be included in such bills, which means H.R. 3762 could not repeal large sections of the ACA that are more regulatory than budgetary in nature. A partial repeal bill passed using reconciliation could put an end date on funding for the premium credits and cost-sharing subsidies provided in the ACA, and reduce the federal government’s payments to states that have adopted the ACA’s Medicaid expansion. … The repeal bill will almost certainly eliminate the tax penalty associated with enforcement of the individual mandate but is likely to delay repealing the tax credits and Medicaid expansion until at least 2019.
… The law’s current requirements regarding essential health benefits, and the prohibition on the use of a person’s health status by insurers when setting premiums or benefit offerings, were not altered in H.R. 3762; they could not be altered in a reconciliation bill taken up in 2017, either. …
Congressional leaders have said that they would move forward after enactment of the partial repeal bill with a replacement effort that could involve a series of bills rather than one large reform plan. …
Greater Instability With ‘Repeal And Delay’
… Thirty-six percent of the national marketplace is being served by only one insurer in 2017.
… Even if the number of those dropping out in 2017 is small, it will be lead to further losses for insurers, and make it even more difficult for them to justify continued participation in 2018. There is a real danger that many parts of the country would be left with no insurance plans at all offering coverage on the ACA exchanges in 2018.
… The political firestorm that would ensue from several million people losing their insurance could be enough to force the GOP to reverse course and take steps to provide some kind of emergency insurance for this population, which could be even more costly than the ACA. …
Steps To Stabilize The Exchanges Difficult To Enact
… The Obama administration has paid exchange insurers to reduce the level of cost-sharing for exchange enrollees with incomes below 250 percent of the federal poverty line. …
… Reinsurance is funded by a tax on insurers, with $20 billion in the first two years going to fund the program and $5 billion to go toward deficit reduction. Faced with a shortfall in revenue collection, the Obama administration used all of the funds for reinsurance and none for deficit reduction. …
A third… …the Trump administration might broaden the criteria used to exempt individuals from the penalty…
– Full and clear funding of the cost-sharing subsidies. …
– Funding and Extension of Insurance Risk Mitigation Features of the ACA. …
– Maintain the individual mandate’s tax penalties until the replacement plan is fully operational. …
… Until a new insurance structure is put in place, Americans without access to employer coverage have no other choice but to get coverage from ACA-regulated plans. However, years of GOP rhetoric denouncing the individual mandate, the subsidies for insurance companies, and excessive spending of the ACA will make it difficult for Republicans to pass a bill that includes the kinds of provisions that are needed to stabilize the existing market, even temporarily. …
Passing ‘Replace’ Becomes Much Harder Politically After Repeal
…the reconciliation bill…would have lowered federal spending by $1.4 trillion over 10 years, and reduced taxes by $1.1 trillion over the same period. The net effect would have been to lower the deficit by $317 billion over a decade.
… A replacement bill that provided assistance to low-income households, through either Medicaid or a refundable tax credit, would necessarily increase spending relative to the post-repeal baseline. For many in the GOP, it could be very difficult to vote for a bill that would increase spending by a few hundred billion dollars relative to the post-repeal baseline, even if the overall cost would be less than the ACA.
…cuts in Medicare and Medicaid are controversial, even among Republicans. … It seems certain that whatever is done will leave a replacement plan with far less budgetary space to work with…
The Plan To Pass Replace In Steps Signals There Is No Plan
News stories suggest Congress is considering moving forward with a replacement plan in a series of smaller bills rather than one big bill. This is a signal that Republicans in Congress may not have a clear vision of what they want to do.
…it is necessary to put together a coherent series of policies across Medicaid, employer-sponsored insurance, and the non-group insurance market. …

Paying for an ACA replacement becomes near impossible if the law’s tax increases are repealed (12/19/2016) | Loren Adler and Paul Ginsburg @BrookingsEcon
…repealing the ACA before replacing it would cause significant disruption in the individual health insurance market and risk imploding the market altogether if no replacement emerges – all but ensuring that millions of Americans who purchase their own insurance (many of whom had insurance pre-ACA) will become uninsured. …
TAX CUTS WILL ACCELERATE THE EXHAUSTION OF MEDICARE’S TRUST FUND
Specifically, the reconciliation repeal bill from earlier this year eliminated $680 billion (over ten years) of taxes on high-income households and the health care industry (e.g., insurers, device manufactures, and drug companies). In addition to increasing deficits, by rescinding the 0.9% Hospital Insurance Trust Fund payroll tax on wages above $200,000, these tax cuts would also accelerate the exhaustion of Medicare’s Part A Trust Fund by four years, from 2028 to 2024.
NOT ENOUGH MONEY LEFT FOR REPLACEMENT AFTER REPEALING THE ACA’S TAXES
…it would net roughly $500 billion in deficit reduction over the ten-year budget window. Lawmakers would likely create an “ACA replacement fund” with the bill’s deficit reduction – a sort of piggybank that they could subsequently tap into to pay for a replacement plan. It’s unclear how well this approach adheres to Congressional rules, but it is similar to how the “Medicare Improvement Fund” or “SGR Transition Fund” banked savings from one bill to help pay for increased Medicare spending in the form of “doc fixes”…
… Consequently, only about 40 percent of the $1.24 trillion cost of the ACA’s coverage expansion from 2019-2026 would be available.
… First, given recent budget scoring changes, lawmakers will likely count the roughly $200 billion of additional dynamic savings that ACA repeal produces (that is, CBO estimates that ACA repeal would slightly increase economic growth, and in turn revenues). …
Altogether, then, this relatively aggressive course of action could generate roughly $850 billion to fund an ACA replacement plan, still only two-thirds as much funding for coverage expansion as under the ACA. …
RECONCILIATION REPEAL BILL ALREADY INCREASES LONG-TERM DEFICITS
While the reconciliation ACA repeal and delay bill reduces deficits by roughly $500 billion in the first decade, it would actually begin adding to deficits around 2035 and be scored by CBO as increasing debt over the long run. This result occurs because the revenue lost from the bill’s tax cuts grows significantly faster than the savings from eliminating the ACA’s coverage provisions, although this is primarily due to one provision, the Cadillac tax on high-cost employer-provided health insurance plans. …

How to create TrumpCare and make it great (12/6/2016) | Alice M. Rivlin @thehill @BrookingsEcon
… Fortunately, the basic structure of the existing law features consumer choice among competing private health plans, which many Republican plans also espouse. This should give the framework strong appeal to market-oriented Republicans — once it no longer has President Obama’s name on it. ObamaCare offers those who do not have affordable coverage from their employment or other sources a range of choices on electronic marketplaces and income-related subsidies through the tax system to help them pay for their chosen plan. …
… But these popular features of current law, plus rules against charging older people more than triple the rate for younger ones made the Obamacare marketplaces difficult to sustain without repairs. …
… Republicans also complained that the law required covering benefits that not everyone needed (single men don’t want maternity coverage), did not allow bare-bones protection only against medical catastrophes, and did not give states flexibility to use their Medicaid funds to fund innovative solutions to achieving broader insurance coverage. …
… The challenge for the new team will be to craft a deal that relaxes the age rules to make it more attractive for younger, healthier people to buy at least bare-bones insurance and gives them strong incentives to enroll without an actual mandate; allows insurance companies to make at least a modest profit by off-loading some of the costs of the very sick onto subsidized reinsurance or high risk pools; and gives people who live in sparsely populated rural areas more options at affordable cost. …
… Interstate compacts to broaden insurance pools across state lines might play a role in cracking the perennial problem of covering rural areas, and other Republican favorites, such as health savings accounts and medical malpractice reform, should also be part of the package. …
…namely capping the exclusion of employer-paid health insurance benefits from taxable income…

Keeping tabs on a potential ACA repeal: Three questions to watch (11/15/2016) | @mollyereynolds @BrookingsGov
Do Republicans lay the necessary groundwork for a quick move in January?
…whether congressional Republicans actually adopt it in either the lame duck or early January will be a key signal of how quickly they plan to move.
Do Republicans follow the template from the 2015–16 “test drive”?
… Among the constraints created by the Byrd Rule are requirements that provisions are not “merely incidental” to deficit reduction, with the definition of “merely incidental” adjudicated by the Senate Parliamentarian. …
A second useful marker of how assertive Republicans intend to be involves the Medicaid expansion. …
How long do Republicans give themselves to come up with a replacement?
… Of the process of developing the plan, one Republican congressman said, “if you live in the Republican conference… I don’t think Jesus could get everyone to agree on everything.” …

Solving surprise medical bills (w PDF; 10/13/2016) | Mark Hall, Paul Ginsburg, Steven M. Lieberman, Loren Adler, Caitlin Brandt, and Margaret Darling @BrookingsEcon & @SchaefferCenter


US Policy Changes Vol.47 (Miscellaneous Vol.5 – political dysfunction)

Here is an article on political dysfunction: TWENTIETH-CENTURY REMEDIES (PDF; 2014) | STEPHEN SKOWRONEK @Yale @BU_Law,@BULawReview. Excerpt is on our own.

American history shows us that when governmental processes appear to break down, old institutions can be redeployed to operate in new ways, and new institutions can be built around them to reorient the work of the whole.
In the early years of the twentieth century, reformers overcame widespread fears of governmental dysfunction by redeploying the presidency; their solutions to the newly emergent problems of governing under the Constitution worked around new conceptions of presidential leadership. …

INTRODUCTION
Political dysfunction is not a new concern. …
The progressives responded to the crisis of governability in their day by redeploying the institutions embedded in the constitutional framework, especially the presidency. …
In recent years, much has been made of the misalignment of institutional forms and reform aspirations that followed in the wake of the progressive turn. …
… The question is whether we should expect any remedy improvised pragmatically in midstream to suffice indefinitely. … One model cast the President as an agent of democratic transformation, a leader who could be counted upon periodically to break through the knot of interests protected by the Constitution, thereby opening the government to new possibilities and revitalizing the political system at large. The other model cast the President as a policy entrepreneur, a political facilitator who would bring together actors across dispersed and relatively independent institutions to orchestrate timely responses to national problems as they arose. …
…undertaken simultaneously, for example, during the New Deal and the Great Society. But facilitating policy is not the same thing as transforming the polity. …
… Obama came to the presidency steeped in the progressive tradition, and his rise to power joined together the progressives’ twin aspirations for political leadership. …

I. COMPETING ASPIRATIONS FOR A PROGRESSIVE PRESIDENCY
At the beginning of the twentieth century, the progressive historian Henry Jones Ford described presidential leadership as “the work of the people, breaking through the constitutional form.” Ford perceived a paradox in the Constitution’s framing. The Framers fashioned the presidency as a conservative counterweight to congressional impulsiveness but, by worrying so much about the power of Congress, they inadvertently constructed an institution able to deploy itself to achieve purposes far more unsettling than the congressional purposes the Framers initially feared. Ford extrapolated from the examples of Presidents Andrew Jackson and Abraham Lincoln, suggesting that the two apparent anomalies of presidential leadership in the nineteenth century were similar to one another, and that their similarities might serve as a model for democratic transformation in the twentieth century.
… During the New Deal Era, President Franklin D. Roosevelt exemplified Ford’s theory of presidential power, and the promise of presidentially led political breakthroughs imprinted itself indelibly on the American imagination. … Faith in the presidency’s regenerative capacity was revived at the end of the twentieth century in agitation on behalf of a Reagan “Revolution.” President Obama himself nodded to the Reagan Administration’s exemplification of reconstructive leadership. …
… Jackson’s destruction of the National Bank and Lincoln’s eradication of slavery eliminated the institutions that supported the old governing elite. Opening the government to previously excluded interests and concerns, and changing the trajectory of affairs, hinged on outright repudiation of a prior constitutional settlement. …
… President Roosevelt railed against intransigent justices and economic royalists in the old Jacksonian style, but beyond that, the parallels were already beginning to strain. Unlike Jackson or Lincoln, Roosevelt could not get rid of the institutions against which he arrayed himself. …and in his efforts to set the terms for their incorporation into his new order… he repeatedly went down to defeat. …
… Government is rearranged and reoriented by breaking up the infrastructure that supports the politics of the past. Renewal is achieved by cutting deeply enough through extant arrangements of government to reset the standards of legitimate national action. Dysfunction is resolved by restructuring the government’s basic mode of operations and installing within those operations a new common sense about the government’s purposes. …
… The Affordable Care Act of 201025 (ACA) is rightly considered a historic achievement, but threading the needle on healthcare reform has also become emblematic of the distinction I am drawing, the distinction between negotiating a policy fix for a pressing national problem and releasing the government from ingrained constraints. …

II. PRESIDENT OBAMA’S CHOICE
… But notwithstanding the alignment of so many of the trappings of a presidentially led political reconstruction, President Obama, even more than President Reagan, shied away from any attempt at ground clearing. …
… Obama perceived this new reality – the reality that, for all intents and purposes, the interdependence of interests has rendered the reconstructive option counterproductive, that the value of “ruthless pragmatism” has supplanted the value of resolute insurgency, that we were “all in this together.”
…twentieth-century government was built on the counsels of rationality and managerial responsibility, …respect for these siren songs preempts a fundamental redirection of affairs. …
With the insurgents’ rejection of collaboration and cooperation, the objectives of presidential leadership in the problem-solving mode have grown even murkier. President Obama, with his initiatives blocked on all fronts, has begun to match his opponents’ resistance by stiffening his own repudiative posture. His second term appears to be devoted to stigmatizing conservative intransigence as irrational and untenable, thereby abetting the insurgency’s implosion. In this, Obama has crystallized a new, curiously defensive form of progressivism. …

CONCLUSION
…the frustration of transformative ambitions appears to have deepened the cultural appeal of the reconstructive ideal, even as that appeal is being registered in increasingly wild and dangerous delusions. Barack Obama may be correct that, as a practical matter, threading the policy needle is the best a President today has to offer, but he stretches to convince us that a new, more vital regime can be created without action aimed directly at the institutional structure of interest representation. …
… What we face today is the exhaustion of an old remedy. … The question to be confronted today is whether the mechanisms upon which we have relied historically for negotiating transitions are still effective and whether they still portend a reasonable resolution of the challenges we face. …
If the goal is to renew American government once again, faith in the presidency appears unlikely to suffice. The reformers of the twentieth century should instruct us by example, not by prescription. The challenge is to do again what they did: to conjure some new mechanism for working through dysfunction and to reconfigure our institutions so as to bypass the limitations of the old.


UK Vol.65 (Post-EUref Vol.11 – including UK Prime Minister Theresa May’s Brexit speech)

Here are articles on Brexit including scholars’ analyses, UK Prime Minister’s speech, et al. Excerpts are on our own.

I was wrong on Brexit (12/12/2016) | Niall Ferguson @BostonGlobe
The three words you are least likely to hear from an academic are “I was wrong.” Well, I was wrong to argue against “Brexit,” as I admitted in public last week. …
…Europe became the world’s most dynamic civilization after around 1500 partly because of political fragmentation and competition between multiple independent states. …the rule of law ? and specifically the English common law ? was one of the “killer applications” of western civilization.
…the costs of Brexit would outweigh the benefits. …the doom-laden projections of a post-Brexit recession from the International Monetary Fund, the Treasury, and others. …
…Americans since the 1960s have wanted the Brits inside the EU to counterbalance the French…
… First, the warnings I and others gave about European monetary union back in the 1990s have been wholly vindicated.
Second, Europe’s supposedly common foreign policy has been a failure. …
Third, the EU institutions mishandled the financial crisis. …
Nor is that all. Last year EU leaders… Finally, they utterly misread the mounting public dissatisfaction ? not only in Britain ? with the consequences of unfettered free population movement.
… His mistake was to accept the risible terms that the European leaders offered him back in February on EU migrants’ eligibility for benefits, instead of marching out of the conference room and announcing that he would campaign for Brexit. My mistake was not to urge that.
… Many “Remainers” have dug in deeper and waste their time dreaming up ways of derailing Brexit. The Brexiteers meanwhile are dividing like 19th-century Protestant sectarians over how “hard” Brexit should be. …

Key points from May’s Brexit speech: what have we learned? (w Video; 1/17/2019) | @jonhenley @guardian
The single market
…her top two Brexit priorities are controlling EU immigration and withdrawing from the jurisdiction of the European court of justice.
… Single market membership, she said, would mean accepting the EU’s four freedoms – free movement of goods, services, capital and people – and “complying with the EU’s rules and regulations that regulate those freedoms”.
…Britain will seek “the greatest possible access to it through a new, comprehensive, bold and ambitious free trade agreement”.
The customs union
…goods from outside the area are charged a common external tariff to cross its border and enter it; goods already within it can circulate and cross borders freely.
…she did not want Britain to be bound by the common commercial policy and the common external tariff.
But she also said she wanted tariff-free trade with Europe and cross-border trade there to be “as frictionless as possible”…
… Car parts, for example, cross EU borders dozens of times before completion, and customs checks would be disastrous…
Parliamentary involvement and article 50 timing
… This deadline may be problematic if the supreme court rules, as expected, later this month that parliament must vote on the formal article 50 notification to the EU, and it could also be delayed by elections in Northern Ireland.
… “I can confirm today that the government will put the final deal that is agreed between the UK and the EU to a vote in both Houses of Parliament, before it comes into force.”
Controlling EU immigration
…while wanting to continue to attract “the brightest and best to study and work in Britain”…
… She has previously rejected the idea of a point-based regime, and ministers have hinted at the possibility of work visas, but no new system has yet been formally announced.
A transitional deal
…a “cliff-edge”: …with no future relationship defined.
…“implementation period”…
But she is opposed to the kind of interim arrangement favoured by some who want a lengthy…
Status of EU citizens in UK and UK citizens on continent
…“negotiating capital”. …the government wants to guarantee their rights – and those of British citizens on the continent – “as early as we can”. …
The EU budget
…“some specific European programmes… …it is reasonable that we should make an appropriate contribution.”
The EEA option
… “We do not seek to adopt a model already enjoyed by other countries.”
… Britain did not want “partial membership…or associate membership…
Ireland and the union
…maintaining the pre-EU common travel area between Britain and Ireland… …avoid a “hard border” between Northern Ireland and the Republic.
…describing the union between England, Scotland and Wales as precious. …
Tone
…“I want us to be … the best friend and neighbour to our European partners,”…
…“an act of calamitous self-harm for the countries of Europe. …
…“no deal for Britain is better than a bad deal for Britain”…
Conclusion

Theresa May’s Brexit speech in full: Prime Minister outlines her 12 objectives for negotiations: Britain is leaving the Single Market but will still cooperate in other areas (1/18/2017) | @independent

London Mayor Sadiq Khan in stinging attack on Theresa May’s Brexit plans, warning they could ‘rip Britain apart’ (w Videos; 1/18/2017) | @PippaCrerar @standardnews

How a British Court Ruling Could Delay Brexit Negotiations (w Podcast; 11/9/2016) | @whartonknows
… Olivier Chatain, professor of strategy and business policy at the HEC Paris business school, and a senior fellow at Wharton’s Mack Institute of Innovation Management, and Michelle Egan, a professor at American University’s School of International Service…
More Uncertainty
Economic Impact
Finding Common Ground
Brexit Referendum Will Stand
A Brexit Bill

Oxford academics warning of Brexit ‘disaster’ (1/11/2017) | @seanjcoughlan @bbc
A “hard Brexit” would be the “biggest disaster” to have hit the UK’s universities for many years, a university head told MPs.
‘Culturally allergic’
‘Manchester Utd problem’
Research funding
Unanswered questions

Can Brexit Be Achieved with Minimal Damage? (w Podcast; 10/7/2016) | @whartonknows
American University’s Michelle Egan…

How Brexit Could Boost the European Union (9/21/2016) | @whartonknows
Size Matters a lot
Then There Is Regulation
Talent Is Key
Real Investments
Yet More Uncertainty
Opportunities for the Rest of Europe
– Big is beautiful? promote it
– Boost the single market? but shift the focus to direct benefits for people
– Smart integration? do things that could not be done before
– Bring over banks, corporates and the ecosystem? make it appealing to move
– Leverage investment opportunities? follow the money
– Attract the leaders of tomorrow? EU-27 as the place to be
– Make it appealing for skilled workers to move back
– Finally, it is all about trust, stability and the reduction of uncertainty

Amid Brexit and Spotify threats, Stockholm adapts to remain globally competitive (9/20/2016) | Elizabeth Patterson and Marek Gootman @BrookingsInst

What Comes Next for Europe? (6/27/2016) | @DBachYSOM & ANDREW METRICK @AdvancedMgmt @YaleInsights
Andrew Metrick:… The bigger concerns are long run. … With the UK exiting, it’s the first time we’ve seen any significant pullback from this project, which had mixed success, but certainly kept alive its noble ideals. …
… Uncertainty discourages people from making long-term investments. …
David Bach:… Three million EU citizens live and work in the UK, and 1.5 million UK citizens live in Europe. …the European Union has to think, on the one hand, about how to manage this exit in a way that protects the interests of the stakeholders in the 27 continuing EU countries…
…at least three different groups within the “Leave” camp. You have conservative, neo-liberal types around Boris Johnson and others who feel that EU regulation was stifling business and want to control their own sovereignty. The second camp is around Nigel Farage and the UK Independence Party—the nativists who are anti-immigration. And then you have a third group, trade unionists who felt that Europe was too pro-business, and they want to go back to a model of greater protection. …
Metrick:… Northern Ireland is really tricky. It is the case that they’ve had no borders with the Republic of Ireland for a while, but I don’t know whether the religious issues that made this split in the first place are going to be any less potent.
Bach:… The presumption was that if we used Article 50, it was going to be some small Eastern European nation that couldn’t keep up with the regulations. …
Metrick: No one believes the optimal size of government is everybody under one government. There are always going to be certain things we want local control over. This is a battle we have a lot of experience with in the United States, and we fought a civil war over it. …

Ivan Rogers and the great British Brexit pantomime (1/4/2017) | @RGWhitman @ConversationUK @UKandEU

Scottish independence: Decapitate Britain, and we kill off the greatest political union ever (9/8/2014) | Boris Johnson @telegraph


US Policy Changes Vol.46 (Economy Vol.10 / Employment Vol.5 – incl trade, paid leave, minimum wage, income)

Here are articles on employment, trade, paid leave, minimum wage, income, et al. Excerpts are on our own.

How the ‘Losers’ in America’s Trade Policies Got Left Behind – The U.S. has not figured out how to help people whose jobs were outsourced overseas. Can the problem be solved? (10/19/2016) | @AlanaSemuels @TheAtlantic
… Though TAA is one of the government’s most robust retraining and support programs, it has not been very successful in helping those who lose jobs in manufacturing move on to equally lucrative careers. Though TAA has helped people receive training by providing them tuition, counseling, and information about educational opportunities, “those impacts had not yet translated into labor market gains during the four-year period following job loss,” a study by Social Policy Research Associations and Mathematica Policy Research for the Department of Labor found. …
… “It’s not just that TAA isn’t working. It’s that the entire portfolio of labor-market adjustment policies in the U.S. isn’t working,” Chad Bown, a senior fellow at the Peterson Institute for International Economics, told me. …
…Kermit Kaleba, the federal policy director of the National Skills Coalition… “Training doesn’t create jobs, training provides opportunities while there are jobs,” Kaleba told me. “If a factory closes down, that doesn’t mean there’s a set of corresponding work opportunities.”
…the low likelihood that workers will relocate. That fact that Americans don’t just pick up and move from economically depressed areas to booming ones—like they did during the Dust Bowl—has puzzled economists for decades. One study, from the American Economic Journal, has found that low-skilled Mexican-born immigrants move in response to labor demand, yet low-skilled American-born people do not. …
…areas losing lots of jobs see less demand for housing, and home values fall. Workers who may still be paying off mortgages suddenly find they are underwater, meaning they owe more on their homes than their homes are worth. …
… If trade creates winners and losers in our economy—and many people passively win by gaining access to cheaper products from overseas—isn’t there an obligation to compensate the losers in some way? Giving up on them because retraining hasn’t yet proven to be successful seems short-sighted…
… “In theory, the winners should repay the losers, but we don’t in our country,” Timothy Smeeding, a professor of public affairs at the University of Wisconsin-Madison…
…the writer Henry Olsen…
As my colleague Derek Thompson has written, Americans are moving less than they did in the past. This coincides with the rise of an American populace discontent with the opportunities that exist where they are. …

What could really help the working class? Paid leave. (12/13/2016) | Eleanor Krause and @isawhill @BrookingsEcon
… During his campaign, Trump proposed 6 weeks of paid leave for mothers. This is the first time a Republican presidential candidate has included paid leave in his policy platform. … But as usual, the policy design matters a lot.
ACCESS TO PAID LEAVE IS LOWEST FOR LOW-WAGE WORKERS
The federal Family and Medical Leave Act (FMLA) provides up to 12 weeks of unpaid leave for these purposes. But FMLA only covers large employers and their full-time employees – less than 60 percent of the labor force. …
TRUMP’S PROPOSAL IS A START, BUT COULD BE IMPROVED
Include fathers.
Offer more than 6 weeks.
Use the payroll tax system, not UI.
Build in job protection.
LET’S GET IT (MOSTLY) RIGHT THE FIRST TIME.

How Trump could unintentionally raise the minimum wage in your city (11/29/2016) | Harry J. Holzer @FortuneMagazine @BrookingsEcon
… But it is even less likely that Trump, who is so strongly committed to rolling back regulations of labor (and other) markets, would push for any such increases. …
… A 2014 report by the Congressional Budget Office (CBO) found that increases in the minimum wage of up to $10 an hour would generate only very modest employment losses for youth and unskilled adults.
…the Fight for $15 campaign has actually achieved its goal of a $15 minimum wage…in several states and large cities, including Seattle, San Francisco, Los Angeles, New York, and Washington DC. …
… There are simply too many unskilled workers in many localities who will not be formally hired at these wages, according to the 2014 CBO report, even if the wage increase is phased in slowly. …
The numbers of unskilled individuals hired informally and paid in cash in these localities will likely rise over time if minimum wage increases are implemented. …
… In DC, employers across the river in Arlington, Va. will still pay $7.25 when the wages in the capital rise to $15; the incentives for employers of many low-wage workers to migrate to northern Virginia will become very large…
… For instance, fast-food restaurants and coffee bars will likely use many more robots a decade from now than they would with lower minimum wages; and hotels are likely to more rapidly move to optional room cleaning overnight. …

Middle America’s malaise helped Trump to victory, but he has no cure (11/28/2016) | @RichardvReeves @BrookingsEcon
…the areas where people are turning to oxycodone are also the ones that turned to Trump. Trump out-performed Mitt Romney in counties with the highest levels of premature mortality, according to our own analysis. …
…people are “tired of having chief executives make 300 times what they do, while 52 percent of all new income goes to the top 1 percent.” …
… Scott Winship @FREOPP…concludes that “there is little empirical support for the idea that ‘it was the economy, stupid’.” … Many white men, especially those of modest education, feel as if they are being overtaken and left behind. “It’s relative status, stupid!”
…@KathyJCramer has been conducting a series of in-depth interviews with people in rural Wisconsin…
… “They say, it used to be the case that my dad could do this job and retire at a relatively decent age, and make a decent wage. We had a pretty good quality of life, the community was thriving. Now I’m doing what he did, but my life is really much more difficult.”
These men, and many women too, compare their lives to a world in which men like them—perhaps their own fathers—could get a decent-paying job, be considered the automatic “head of the household,” and always know, at some deep level, that they were superior to people with darker skin. … …the gender gap in median wages has narrowed.
And of course we’ve had a black President since 2008. As James Baldwin warned almost half a century ago, “the danger, in the minds of most white Americans, is the loss of their identity…The black man has functioned in the white man’s world as a fixed star…
… Even if he succeeds in reducing trade competition—which is fairly unlikely—any impact on the lives of mid-Western whites will be small, and slow in coming. Women are not returning to the kitchen, or standing by their man just because they have to. …
… In the long run, the only cure is for whites, and especially white men, to change their expectation that high status, along with a decent-paying job, will be delivered to them merely by virtue of their race and gender.
Loss of relative status is painful, no doubt. But it is the inescapable price of equality. … Trump is a temporary painkiller… ..J.D. Vance…

On the new Chetty-bomb that only half of Americans are better off than their parents (12/8/2016) | Dimitrios Halikias and @RichardvReeves @BrookingsEcon
… riting with David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, and Jimmy Narang, Professor Raj Chetty has just produced a stunning research finding…
THE RUSTBELT RUSTS UP
…the analysis paper does chime with another important paper released this week by the equally impressive team of Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, showing that market incomes for the bottom fifty percent of earners have remained completely flat over the last half century.
INCOME INEQUALITY IS DRIVING DOWN ABSOLUTE MOBILITY MORE THAN SLOW GROWTH
… In the “high-growth” counterfactual, absolute mobility rates would be 62 percent, 12 percentage points higher than they are today. In the “more equal” counterfactual, absolute mobility rates would be 80 percent, 30 percentage points higher than they are today. …

America’s male employment crisis is both urban and rural (12/5/2016) | @berubea1 @BrookingsMetro
… Economists such as David Autor have chronicled how increasing Chinese imports over the past two decades produced long-term economic dislocation in many of these communities. Anne Case and Angus Deaton uncovered alarming evidence that mortality rates have risen among white Americans with lower levels of education, paralleling a rapid increase in drug overdoses largely concentrated in non-urban areas.
139 primary cities anchor the nation’s 100 largest metropolitan areas…
81 high-density suburban counties surround or abut many of these cities…
157 mature suburban counties represent the next era of metropolitan development…
344 emerging suburban and exurban counties lie at the fringe of major metro areas…
567 small metropolitan counties comprise metropolitan areas outside the 100 largest…
658 micropolitan counties are part of census-defined micropolitan areas centered on smaller cities and towns with populations between 10,000 and 50,000 people…
1,318 rural counties form the rest of the U.S. map…
Rates of work among prime-aged men are below average in both cities and smaller, less urbanized communities.
Employment rates among men fell dramatically in smaller communities, but rose in cities.
Big cities remain home to more out-of-work prime-aged men than other types of communities.
First…these places share an important interest in improving the availability and quality of jobs. …
Second, while jobs are certainly a shared priority for cities and rural areas, their divergent trend lines in employment opportunity merit reflection. …
…“agglomeration” is increasingly the route to employment opportunity… …strengthening connections between larger and smaller places through infrastructure investment and shared economic development strategies. Such efforts could unite economic leaders in cities and their surrounding rural areas in older industrial states, if state lawmakers choose not to pit those interests against one another. …


US Policy Changes Vol.45 (Foreign Policy Vol.7 – globalization)

Here is an article on globalization: WHAT IS GLOBALIZATION?: Four Possible Answers (PDF; Dec 1998) | Simon Reich @KelloggInst @NotreDame. Excerpts are on our own.

Introduction
… Structuralism, with its rationalist underpinnings, came under attack in political science from constructivists, and within a short period no professional conference or symposium was complete without a genuflection towards the attributes of ‘globalization. …
…finance, technology transfer, transnationalism, multilateralism, and regionalism…
…globalization signaled the reduced importance of (at least traditional forms of) security studies in international relations and a corresponding elevation of international political economy questions—as well as suggesting new linkages between OECD and non-OECD states, the private and public sectors, capital and labor, work and leisure, state and society. …globalization explains the Clinton Administration’s preference for focusing on economic issues in foreign affairs, the causal linkage between this apparently global phenomenon and current policy remains elusive. …

Definition
James Rosenau… Globalization is not the same as globalism, which points to aspirations for an end state of affairs wherein values are shared by or pertinent to all the world’s five billion people, their environment, their roles as citizens, consumers or producers with an interest in collective action designed to solve common problems. Nor is it universalism—values which embrace all humanity, hypothetically or actually.
Anthony McGrew… …multiplicity of linkages and interconnections that transcend the nation states (and by implication the societies) which make up the modern world system. It defines a process through which events, decisions and activities in one part of the world can come to have a significant consequence for individuals and communities in quite distant parts of the globe.
Philip Cerny… Globalization is defined here as a set of economic and political structures and processes deriving from the changing character of the goods and assets that comprise the base of the international political economy—in particular, the increasing structural differentiation of those goods and assets.

1. Globalization as a Historical Epoch
… The demise of the Cold War coincided with the onset of globalization, raising the question of whether there is a causal relationship between the two. Certainly, the comments of scholars like Immanuel Wallerstein (echoing Trotsky), who registered concern that Communist states could not sustain themselves in the context of a capitalist system, may be interpreted to imply as such. Whether causally related or not, globalization as a period might be said to ‘succeed’ the Cold War historically. …
… The first was the introduction of détente between the United States and Soviet Union. The second was the breakdown of the ‘Social Contract,’ initially in Britain but eventually throughout the advanced industrial countries. …

2. Globalization as Confluence of Economic Phenomena
… Linking globalization to processes of economic integration, Robert Z. Lawrence, for example, makes the broad statement that “economic integration generally leads to convergence, with poorer economies growing more rapidly than richer economies.” Jeffrey G. Williamson, noted Harvard economist and then President of the of the Economic History Association, also argued in his presidential address that globalization leads to convergence—and has done in prior historical periods. …
… R.J. Barry Jones who suggests that globalization may simply be an intensification of the process
of international interdependence…
… Wilfried Ruigrok and Rob van Tulder are specific in their characterization of globalization, associating it with increased international capital mobility and a growing incidence of mergers and acquisitions and of strategic alliances. …

3. Globalization as the hegemony of American values
… Edward Banfield’s The Moral Basis of A Backward Society or David Apter’s comment, in describing the theme of the Politics of Modernization, that “Despite an emphasis on methods of comparing governments and studying
their political growth and adaptation, analysis begins with moral content. …
Francis Fukuyama suggests that convergence is inevitable:… All countries undergoing economic modernization must increasing resemble one another: they must unify nationally on the basis of a centralized state, urbanize, replace traditional forms of social organization like tribe, sect, and family with economically rational ones based on function and efficiency, and provide for the universal education of their citizens… Moreover, the logic of modern natural science would seem to dictate a universal evolution in the direction of capitalism…
… Protestant values that purportedly epitomize the Enlightenment. Even Samuel Huntington, noted critic of the initial formulations of modernization theory (and explicit opponent of the concept of convergence), appears to have accepted a central proposition of modernization; the stimulant of economic growth on the propensity towards democratization. …
… But it is a specific form of liberal democracy—it is John Locke’s and not Jean-Jacques Rousseau’s variant. And it is, comparably, a particular form of economic development—it is the Anglo-Saxon classicism of Adam Smith rather than the ‘Continentalism’ of Friedrich List. …
… The effort to co-op elites, at least initially from across the Triad of Japan, North America, and Europe, has effectively defended the stability of a liberal international order and warded off any movement towards mercantilism, averting an imperialist crisis of capitalism anticipated by a Leninist approach. Here, Gramsci’s stress on hegemony’s reliance on consensuality rather than domination is critical in explaining the emergence of a transnational class structure which is buttressed by a substructure predicated on the free movement of capital. While American power in a realist sense may have therefore declined, the capacity of organic intellectuals like those found in organizations such as the Trilateral Commission has proven indispensable in exporting a universalist ideology (of neoliberalism), thus constructing a historic bloc and thereby sustaining America hegemony.
… For liberals it often disintegrates as part of this change in ‘zeitgeist.’ …
… Ann Marie Slaughter concurs: A new world order is emerging, with less fanfare but more substance than either the liberal internationalist or new medievalist visions. The state is not disappearing, it is disaggregating into its separate, functionally distinct parts. These parts—courts, regulatory agencies, executives, and even legislatures—are networking with their counterparts abroad, creating a dense web of relations that constitutes a new, transgovernmental order… Transgovernmentalism offers its own world order ideal, less dramatic but more compelling than either liberal internationalism or the new medievalism. It harnesses the state’s power to find and implement solutions to global problems.

4. Globalization as Technological and Social Revolution
…of globally integrated production; of specialized but interdependent labor markets; of the rapid privatization of state assets; and of the inextricable linkage of technology across conventional national borders. …
The notion that glocalization is the localization of economic and political relations, shifting authority from the national level downward in a manner that enhances responses to globalization, conflicts with alternatives views that suggests the two are dialectically opposed. …
… Winfried Ruigrok and Rob van Tulder … globalizing firms pursue a strategy that strives for a worldwide intrafirm division of labor while glocalizing firms pursue an alternative strategy in which they seek to replicate production within a number of regions, thereby avoiding the risk associated with the formation of trade blocs. Glocalizing firms therefore seek to generate a geographically concentrated interfirm division of labor.
… Consistent with this distinction, the two behave in very different ways. Multinational firms may decentralize production and sales but their decision-making remains firmly centralized in a hierarchical structure. This, in behavioral terms, is reflected in their propensity to retain the overwhelming majority of R&D facilities at home, with very few exceptions.
…Ohmae… As private sector managers and government policymakers are discovering, it makes no sense in so borderless a world to think, say, of countries like ‘Italy’ or ‘China’ as discrete economic entities. …
…that of a paradigmatic shift in the sociological relations that are the foundation for relations among state, economy, and civil society. …
… Peter Schwartz and Peter Leyden who offer the prospect of four decades of sustained growth and ‘remarkable transformation,’ stimulated by the ‘big bang’ of technological development (computers, telecom, biotech, nanotech, and alternative energy) and deregulation. … An unprecedented alignment of an ascendant Asia, a revitalized America, and a reintegrated greater Europe—including a recovered Russia—together will create an economic juggernaut that pulls along most other regions of the planet. These two metatrends—fundamental technological change and a new ethos of openness—will transform our world into the beginnings of a global civilization. …

Conclusion
…four distinct approaches; the first being historical, the second economic, the third sociological, and the fourth technological. …

cf. Review “Good-Bye Hegemony! Power and Influence in the Global System (2014) by Simon Reich and Richard Ned Lebow” | G. John Ikenberry
Reich and Lebow have joined a long list of writers who have announced the end of U.S. hegemony and the coming of the next world order. In fact, they argue that hegemony has been dead for many decades. “Hegemony is a fiction propagated to support a large defense establishment, justify American claims to world leadership, and buttress the self-esteem of voters,” they proclaim. But they have an odd notion of what constitutes hegemony, which they equate with “the blunt exercise of force.” Reich and Lebow note that influence is far more important than raw power and identify three functions that leading states must perform to sustain order in today’s allegedly post-hegemonic international system: agenda setting (advocating policies and principles of order), custodianship (stabilizing the world economy), and sponsorship (initiating rules and institutions). These are perfectly good points, but the main critique relies on a straw man: political scientists and policymakers are well aware of the distinction between raw power and influence. Indeed, the field of international relations even has a term for the strategy of influence that Reich and Lebow advocate. That term is “hegemony.”


UK Vol.64 (Post-EUref Vol.10 – BREXIT AND BEYOND Vol.5)

Here are excerpts from BREXIT AND BEYOND – HOW THE UNITED KINGDOM MIGHT LEAVE THE EUROPEAN UNION (PDF; Nov 2016) | @UKandEU @PolStudiesAssoc.

CHAPTER FIVE: HOW MIGHT BREXIT AFFECT THE FUTURE SHAPE OF THE UK?
5.1 Brexit and the devolved nations
… The least constitutionally disruptive means by which the divergent policy interests of the devolved nations could be accommodated within the current state structure would be for Scotland, Northern Ireland and Wales to take advantage of the repatriation of competences, along with existing powers, and to shadow EU, rather than UK policies in some fields. …
… All sides are agreed that closing the Irish border would be a serious mistake and that some accommodation will have to be made. … It is difficult, however, to envisage Northern Ireland being within the Single Market and the rest of the UK being outside it without controls on trade in goods and services between Northern Ireland and Great Britain. In Scotland, there has been talk of a ‘reverse Greenland’ under which EU law would not apply in England and Wales (as it does not in Greenland) but would apply in Scotland and Northern Ireland. However, the Greenland analogy is hard to make…
The most radical option… Scotland would become independent, and perhaps either continue as a successor state to the UK, or more likely join as a new member. Northern Ireland could retain membership through unification with the Republic. …
… Polls do not suggest that Scottish voters would be ready to abandon the UK market in order to remain within the European one. If the UK were to negotiate access to the Single Market, however, that would make Scottish independence more viable. Irish unification would keep open the border between the two parts of Ireland, but leave a hard border with the UK, which would not be acceptable to unionist opinion. …

CHAPTER SIX: CONCLUSION
… The implications, as we have illustrated, range from the obvious reshaping of relations between the UK and the EU, to changes in the structure of the British state, to potentially profound alterations in the relations between the nations that make it up. …
…the rise of UKIP, divisions within the Labour and Conservative Parties, and the popularity of the SNP north of the border are all related in some way to the politics of British EU membership. …
Ultimately, Brexit will be driven by politics and the preferences of powerful political actors in both the UK and the remaining EU Member States. …


US Policy Changes Vol.44 (National Security Vol.3 – terrorism, budget, nukes, IS)

Here are articles on terrorism, budget, nukes, IS, et al. Excerpts are on our own.

How to fight terrorism in the Donald Trump era (12/30/2016) | @dbyman @TheNatlInterest @BrookingsInst
… First, job loss in manufacturing derives primarily from technological change, not from trade. Manufacturing’s share of U.S. production is quite stable, but its share of employment has declined at a steady rate because productivity growth in manufacturing is higher than in services. …
Hence, there would be a one-time shift of capital and labor from services to manufacturing. Then, the trend decline of manufacturing employment would continue as long as productivity growth in manufactures is faster than that in services. …
Second, the broadest measure of the trade balance, the current account, is equal to savings minus investment. Countries with a trade deficit, like the U.S., are borrowing from the rest of the world to support investment. …
… The 1970s and 1980s saw far more attacks than there were in the post-9/11 era. Recent years have seen horrendous attacks, like the 2015 shootings and bombings in Paris that killed 130 people—but 1988 saw 440 people die, most of whom perished when Libyan agents bombed Pan Am 103.
… Lebanon suffered a calamitous war in the 1970s and 1980s where Palestinian terrorists and Hezbollah were important players. Jihadists in Algeria fought a vicious civil war against the regime in the 1990s, where over one hundred thousand people died. Afghanistan, Nigeria, Sudan, and other countries in the region have long endured civil wars. … Terrorists have contributed to and exploited civil wars that have killed more than one hundred thousand in Afghanistan, tens of thousands in Pakistan, tens of thousands in Nigeria, thousands in Yemen, thousands in Libya, and hundreds of thousands in Syria.
… The first, of course, is the real risk to American lives and those of U.S. allies. In absolute terms, these are small in the United States and only slightly larger in Europe. The average American is more likely to be shot by an armed toddler than killed by a terrorist.
The next danger is political. … it also means defending American values, including being a home to peaceful people of all religions, and welcoming refugees. In Europe, the politics are even nastier as xenophobic movements gain notable strength. …
The biggest danger, however, is to U.S. interests in Muslim parts of Asia, Africa, and the Middle East. Stability and governance have collapsed in many countries and are under threat in others. In addition to the human cost, this threatens the stability of U.S. partners…with countries like Saudi Arabia intervening in Yemen and otherwise ratcheting up regional tension in competition with Iran. The danger also allows U.S. allies like Egypt to resist the pressure to democratize…
… In the 1960s and 1970s, the United States faced an array of national-liberation and left-wing movements… In the 1980s, Hezbollah killed hundreds of Americans, but focused its violence on American troops and diplomats overseas—not civilians at home. … Iran recognized that if it crossed too many lines it might lead to a devastating U.S. reaction. …
… European governments did not make direct concessions to left-wing groups, but pro-union policies and political parties that favored social freedoms that impressionable youth embraced often took the wind out of the radical Left’s sails. Spain granted considerable autonomy to the Basque region, and the British government showered development spending on Northern Ireland while drafting a political deal that ensured Catholic rights. In the Middle East, however, the radical constituencies do not want political reform and are likely to exploit any relaxation of police states to expand their operations.
… Jabhat Fatah al-Sham (al-Qaida’s Syrian and most important affiliate, formerly known as Jabhat al-Nusra), recently announced it was severing ties with al-Qaida and would not attack the United States in the hopes of working more closely with, and eventually uniting, other Syrian opposition groups.
…al-Qaida and the Islamic State have local allies—what the Islamic State would call “provinces”—throughout the Muslim world. … Al-Qaida’s Yemen affiliate, for example, almost succeeded in downing a U.S. passenger plane in 2009, while the Islamic State’s province in the Sinai downed a Russian plane in 2015, killing 224 people.
…Hezbollah even operates a television station. … Such technology has also enabled the Islamic State to aggressively employ so-called “lone wolves”—individuals not directly under its command, but inspired by its message—to strike at the United States and Europe.
… Hamas controls Gaza, Hezbollah has de facto sovereignty over much of Lebanon, al-Qaida affiliates like al-Shabaab in Somalia rule over parts of their country and, of course, the Islamic State at its peak in 2014 ruled lands roughly the size of Great Britain. …
… Americans are in no mood to accept that small attacks are difficult to prevent, that diplomats should be stationed in dangerous areas, and that low levels of terrorism at home are a sign of success, not failure.
…part of the reason that al-Qaida and now the Islamic State turn to lone wolves is because it has proven difficult to use more organized terrorists to strike the United States.
… Although the United States can and should push technology companies to hinder egregious terrorist recruitment and operations, protecting the right of free speech and the proliferation of communications technologies remains a boon for groups that cannot be avoided. …
… America needs more competent good guys—or at least less-bad guys—to support in the Middle East and other danger zones. …
… Ending civil wars must feature centrally in future counterterrorism policy.
… When the Islamic State took Mosul in June 2014, some thirty thousand well-armed Iraqi forces fled the city in the face of one thousand Islamic State fighters… The Islamic State’s expansion occurred, in part, because Iraqi military forces were primarily Shiite and had little interest in defending local Sunnis… In Sunni areas such as Mosul, residents often regarded the army as a puppet of Iran. The Iraqi officers did not command the respect of their troops and lacked professionalism. …
… Some might be better left to allies: France, for example, could continue to take the lead in parts of North and West Africa. …
The first is institutionalization. …
… One branch of government, perhaps the most important in the long term, has been AWOL under both Democratic and Republican leadership: the U.S. Congress. …
…even small attacks like the Boston Marathon bombings paralyzed a major city.
Finally… In contrast to Europe, the American Muslim community is far better integrated and regularly cooperates with law enforcement.
… Ideally, the new president should press state and local officials to work with Muslim communities, not just to stop radicalism in their ranks but to protect them from right-wing extremists. …
… In spite of failures, inefficiencies and hard lessons, it has accomplished its primary objective for the last fifteen years: averting another 9/11. …

Right-sizing the Trump defense buildup (12/28/2016) | @MichaelEOHanlon @USAToday @BrookingsFP
… Yet in framing defense choices, it is important to understand our starting point. The U.S. armed forces are not a disgrace, and their readiness is not in shambles. With the annual federal deficit already on track to top $1 trillion again next decade, even without counting any Trumpian plans for big defense buildups, infrastructure initiatives, or tax cuts, we need a measured defense buildup, not a massive one. Unit by unit, today’s armed forces are strong; the main problem is that they are just somewhat too few in number. …
Consider a few basic facts:…
… For example, instead of adding 70,000 soldiers to the active-duty Army, Trump could add 20,000 to 30,000. That would be enough to shore up new deployments that NATO is beginning in the Baltic states, among other needs. It would restore the Army to its size from the late Bill Clinton/early George W. Bush years. Rather than grow the Navy to 350 ships, Trump could aim for a fleet in the low 300s—10 percent larger than it was several years ago, and still enough to sustain a 2-to-1 advantage over China in fleet tonnage (as well as a big advantage in most types of technology). …

The Donald and nukes, again (12/22/2016) | @steven_pifer @BrookingsInst
U.S. STRATEGIC FORCES
… According to the latest data exchange mandated by the 2010 New Strategic Arms Reduction Treaty (New START), as of September 1 the United States had 1,367 deployed strategic nuclear warheads on 681 deployed submarine-launched ballistic missiles, intercontinental ballistic missiles, and heavy bombers. The vast bulk of these are warheads on ballistic missiles, which can be launched in a matter of minutes. The warheads have yields ranging from 100 to 455 kilotons (the bomb that devastated Hiroshima had a yield of just 14 kilotons).
In addition, the U.S. military has several thousand other nuclear warheads, making up a total stockpile of about 4,500. And that does not count another 2,000 to 2,500 weapons that have been retired and are in the dismantlement queue. …
THE RISK OF EXPANSION
… As of February 2018, the United States and Russia will each be limited by New START to no more than 1,550 deployed strategic warheads on no more than 700 deployed strategic missiles and bombers. Current Pentagon plans call for U.S. strategic forces at precisely those levels.
Expanding U.S. nuclear capabilities thus could mean busting out of New START. …
A SMARTER APPROACH
…to maintain New START and seek to do a deal on further nuclear arms cuts with Mr. Putin. …

The limits of air strikes when fighting the Islamic State (12/6/2016) | @dbyman @lawfareblog @BrookingsFP
… After years of surviving largely underground, in 2014 it took over vast swaths of Iraq and Syria, and it has established so-called “provinces” in Afghanistan, Egypt, Libya, and other countries.
… A poll taken in August showed that only 42 percent of Americans favored deploying a significant number of ground troops to Syria to fight the Islamic State, though a slight majority is comfortable with limited numbers of special operations forces.
… Yet air power, if not used carefully, runs all the risks of a one-night stand: it can create false expectations, drag America into unwanted relationships with flawed partners, and winds up meaning little in the long-term.
… Perhaps most important, adaptation in response to air strikes renders terrorists less effective. A tip sheet found among jihadists in Mali advised militants they could avoid drones by maintaining “complete silence of all wireless contacts,” “[avoiding] gathering in open areas,”… The indirect effects also matter. Islamic State leader Abu Bakr al-Baghdadi has been laying low since U.S. military operations began, diminishing his charismatic presence from Islamic State propaganda and, presumably, disheartening his beleaguered troops. Abu Mohammad al-Adnani, the spokesman who headed the group’s external operations, was also charismatic…
Air power is particularly valuable when it can be yoked with local allied fighters on the ground. In Afghanistan after 9/11, the rag-tag Northern Alliance quickly turned the tables on the Taliban after the U.S. Air Force entered the fray. NATO airpower stopped Gadhafi’s forces at the gates of Benghazi and then helped the Libyan opposition…
Yet air power has real limits.
… Bombers need bases near the conflict zone and access to the battlefield. … But to maintain a sustained battlefield presence, aircraft must be able to get to and from the conflict zone quickly and easily. Allies, of course, don’t provide access to their bases for free: they expect favors in return. …
Nor does air power address the biggest long-term challenges in fighting the Islamic State: governance. …
The trouble is that local allies are often themselves flawed instruments…

Saudi Arabia and terrorism today (9/29/2016) | @dbyman @BrookingsFP

What’s beyond the defeat of ISIS? (9/27/2016) | @dbyman @lawfareblog @BrookingsFP


US Policy Changes Vol.43 (Hospitality Vol.2 – tourism, gig economy, merger)

Here are articles on tourism in Cuba, gig economy in the rides and rooms industries, AT&T-Time Warner merger, and FCC’s spectrum auction. Excerpts are on our own.

Tourism in Cuba: Riding the wave toward sustainable prosperity (12/2/2016) | @rfeinberg2012 and Richard S. Newfarmer @BrookingsEcon
… One shock was negative: Cuba’s main international commercial partners—Venezuela, Brazil, China—have lost their appetites for subsidizing the anemic Cuban economy…
The second shock was positive:…tourist arrivals jumped by over 16 percent in 2015 to 3.5 million. U.S. travelers, including those from the Cuban diaspora, now amount to roughly 14 percent of new arrivals, and are expected to nearly double in 2016.
With lovely beaches, several U.N. historic sites, and a vibrant culture, the industry has enormous potential. Moreover, Cuba still has a relatively low volume of tourists, and if properly managed could readily accommodate planned expansion and become a driver of rising incomes for the whole nation. … Because of government-imposed restrictions on foreign trade, labor markets, and local purchases of inputs, Cuban earnings from the industry as a share of GDP are roughly half that of its Caribbean Basin neighbors, the Dominican Republic and Costa Rica.
…Cuba would have to invest roughly $33 billion over 15 years to 2030 to achieve these targets—a massive sum in comparison to the overall size of the Cuban economy ($87 billion according to official sources). …
Three state-owned enterprises dominate the sector. The largest conglomerate, Gaviota, reports to the Ministry of Defense (MINFAR), and is responsible for about 25 percent of total rooms available to international tourists. While fully two-thirds of hotel rooms operate with foreign collaboration, most take the form of management contracts. Joint ventures with foreign equity are the exception rather than the rule.
At the same time, private bed and breakfasts are rapidly growing, and now offer nearly one-quarter of available rooms. B&Bs have attracted sizeable foreign savings—by all accounts, mainly through remittances from relatives and friends—all the while maintaining legal ownership by domestic Cubans. …we estimate now amounts to about 30 percent of the tourism industry.
POLICY RECOMMENDATIONS
CUBAN POLICIES TO PROMOTE SUSTAINABLE GROWTH
-…establishing clearer rules to attract foreign investment and streamlining the overly discretionary approval processes…
-… Simplifying the tax structure facing private firms and property owners…
-… New taxes could include a value-added tax (VAT) on hotels and tourist services, a property tax on assets, and corporate income taxes.
-… Gradually phasing in market prices in food production, while retaining state stores to serve subsidized low-income groups, would provide incentives for farmers to expand supply…
-…Cuba might do better to also dot the island with smaller, more customized facilities, offering an eco-friendly and authentic experience.
-…new air links…internet connectivity…financial transactions…
U.S. POLICIES TO PROMOTE THE INDUSTRY
-…continue its willingness to support economic reform in Cuba…
-…provide a general license for U.S. firms to engage in the tourism sector…
-…encourage Cuba to engage with the international financial institutions…
-…encourage U.S. hotel chains and investors to follow high-quality corporate social responsibility practices. …
WHAT NEXT?
First…accelerating the development of individual and family entrepreneurs that comprise the vibrant private tourism cluster—whose expansion is clearly in the U.S. national interest—…
Second…while the MINFAR-owned Gaviota tourism firm holds significant market share, the majority of hotel rooms are owned either by non-MINFAR state-owned enterprises or private B&Bs; and even in the case of Gaviota hotels, most of the revenues are paid out in salaries to ordinary Cubans, private or cooperative suppliers, or to other state firms that also employ common citizens. …
Third…

Tracking the gig economy: New numbers (w Appendix; 10/13/2016) | Ian Hathaway & @markmuro1 @BrookingsMetro
SUMMARY
The gig economy, as reflected by nonemployer firms, is significant and growing fast. Overall, there has been a clear surge in nonemployer firms’ — a measure of contractor and freelance individuals — business activity in the last decade, which almost certainly reflects, at least in part, the rise of online platforms.
Platform-based freelancing is not yet substantially displacing payroll employment—but that could change. Despite the uptick in nonemployer contractors, payroll employment in “rides and rooms” industries has not declined during the last five years. Instead, payroll employment has increased in these industries, particularly in the passenger ground transit sectors.
Online gigging in the rides and rooms industries is so far concentrated in large metropolitan areas. Gig economy activity is unevenly distributed in the rides and rooms industries. The spread of nonemployer firms between 2010 and 2014 occurred mostly in the largest metro areas. No less than 81 percent of the four-year net growth in nonemployer firms in the rides sector took place in the 25 largest metros, while 92 percent occurred in the largest 50 metros.

Under Trump, AT&T-Time Warner Merger Hangs in the Balance (1/11/2016) | Alex Walsh @RegBlog
… Now, however, Trump has reportedly reaffirmed his opposition to the deal…
… First… Jamison—an economics professor at the University of Florida—has suggested that merging AT&T and Time Warner is unlikely to pose a problem because combining their different industries seldom results in a monopoly. … Eisenach…is a staunch critic of policies pursued by the FCC under the Obama Administration.
Joshua Wright…recently wrote an editorial for The New York Times discussing whether skepticism about the AT&T merger was economically sound or just represented the belief that mega-mergers “are never…
Finally… Although the Department of Treasury is not responsible for regulatory merger review, it did effectively derail an unpopular merger under the Obama Administration by proposing and instituting new tax rules after the merger was announced.
… Senator Richard Blumenthal (D-Conn.) sharply criticized Trump’s campaign rhetoric. “For a public official to use the blunt heavy instrument of law enforcement to try to silence or change coverage by a news department of any company is for me absolutely abhorrent,” Senator Blumenthal stated. Despite this criticism…

The FCC’s Spectrum Auction: Can the System Be Gamed? (w Podcast; 5/21/2016) | @whartonknows
… Specifically, the FCC wants to reclaim so-called low band spectrum in the 600 MHz range — this is valuable spectrum that can travel over long distances and penetrate buildings better.
On March 29, the FCC will start…
There are about 8,500 operating TV stations that own spectrum licenses, and there are 2,166 broadcast licenses eligible for the auction. Each license is for a 6 MHz block of spectrum covering a particular geographic area for over-the-air TV signals. TV stations that choose to sell their licenses can do three things: go off the air, relocate or share spectrum with another station.
… While the FCC rolled out a very well-designed auction, there is a feature that could substantially benefit owners of multiple TV stations, such as private equity firms, according to the research paper, “Ownership Concentration and Strategic Supply Reduction.”
…Wharton professors Ulrich Doraszelski and Michael Sinkinson…
Michael Sinkinson:… Expectations are very high, in terms of the proceeds that can be generated. They think that there could be upwards of $45 billion paid in by the wireless carriers for this newly freed-up spectrum. …
The auction is very cleverly designed. …
… “Actually, I’m going to pull one of my licenses out of the auction, because that might raise the closing price and increase my total proceeds from this whole process.” …
Ulrich Doraszelski:… these higher prices are going to be paid for by wireless carriers.
Sinkinson:… They have about 43 broadcast licenses at this point. They spent hundreds of millions of dollars acquiring them. …
Sinkinson: …we’re assuming demand is inelastic. But at the same time, right now projections are that the forward auction to the wireless carriers will raise, say, about $45 billion. And the reverse auction, the payoff to the TV holders, is … around a third of that.
…licenses that are being acquired by these private equity firms were often affiliates of, say, MeTV, or MyNetworkTV… There was regulation to prevent you from accumulating market power in the business of broadcasting, but not in just pure spectrum holdings.
Sinkinson: …all of these TV license-holders know their true value, and the auctioneer does not. …
…your personal value of your own TV license should be correlated with things like how many people you can reach with your broadcast TV license. …
Sinkinson: …FCC is going to be paying zero for spectrum in large swaths of the country. At the same time, it will be reselling that spectrum for huge amounts of money to the wireless carriers. …


US Policy Changes Vol.42 (Economy Vol.8 / Employment Vol.4 – incl income, GDP growth, well-being, congressional districts)

Here are articles on GDP growth, well-being, congressional districts, et al. Excerpts are on our own.

GDP growth — is it “good enough” or does it distort policymaking? Income plus well-being: New measures of human progress (10/5/2016) | @cgbrookings @BrookingsInst
1.1 WHAT’S THE ISSUE?
…when GDP counts pollutant-generating economic activity on the positive side of the balance sheet, or when it fails to measure unpaid labor activity, it falls short. …
…David Rothkopf…Simon Kuznets…
1.2 WHAT’S THE DEBATE?
… With rapid technological change, key variables in GDP like cars and factories are over-weighted, while cell phones and green technologies are under-weighted. Subjective well-being metrics assess how people experience their daily lives on the one hand, and how they evaluate their lives as a whole on the other. …
… Yet country averages tell us much less than individual level data, and the scores also change much less than trends across cohorts within countries. Country averages also pick up country specific traits–such as cultural differences in the way that people answer survey questions and/or innate cheerfulness or pessimism.
Still, more broadly, factors such as average levels of GDP per capita, freedom to make choices in life, health status, social capital, and the absence of corruption vary across countries; those that score better, on average, also score higher on average levels of life satisfaction. …
1.3 WHAT TO WATCH OUT FOR?
… Women are typically happier than men, except in places where gender rights are severely compromised. There is also a remarkably consistent U-shaped relationship between age and life satisfaction, with the least happy years coinciding with the middle-aged years in most countries around the world. The turn upward occurs earlier in places with higher average levels of well-being, with the average being 48 years in the happier countries and 62 years in the least happy countries. …
… Having autonomy at work does not have an attached income value, but the assessed value in terms of well-being is very high relative to that of higher marginal incomes. …
Subjective well-being metrics can also attach value…to the effects of differential environmental conditions, ranging from airplane noise to air pollution. …commuting time, diversity in cities, local and national level inequality…
1.4 WHAT’S NEXT?

How Could President Trump Affect the Global Economy? (11/23/2016) | @YaleInsights
Alex Capri, Visiting Senior Fellow, Department of Decision Sciences, NUS Business School
Alexandra Strommer Godoi, Economics Professor, FGV Escola de Administração de Empresas de São Paulo
Kobby Mensah, Lecturer, University of Ghana Business School
Gayle Allard, Professor, IE Business School

Are Americans better off than they were a decade or two ago? (10/19/2016) | @BenBernanke & Peter Olson @BrookingsEcon
… Among the more significant problems with the Census’s measure are that: 1) it excludes taxes, transfers, and non-monetary compensation like employer-provided health insurance; and 2) it is based on surveys rather than more-complete tax and administrative data…
Cross-country welfare comparisons
The Jones-Klenow method…
…focus on three: leisure time, life expectancy, and economic inequality. …
Table 1
Improvements in economic well-being over time
Table 2
Figure 1
Conclusions

It’s Time for a Reset (12/5/2016) | @LHSummers @TurningPointUK @nytimes @BelferCenter
… A trade deal between the European Union and hardly threatening Canada was almost scuppered by a recalcitrant Belgian province concerned about the effects of globalization on local workers. …
… For all the problems and challenges, the past 70 years have been a period of unprecedented progress in increasing human emancipation, prosperity, life expectancy and in reducing violence. …
We need to redirect the global economic dialogue to the promotion of “responsible nationalism” rather than on international integration for its own sake. A classic example of a misguided initiative is the effort to promote a bilateral investment treaty between the United States and China. …
When the Allied nations met in 1944 at Bretton Woods to negotiate the rules and procedures of a new international monetary system, the economist John Maynard Keynes recognized that a global economy will have a systematic bias toward contraction if countries that have borrowed heavily are forced to cut back spending while no pressure is applied to countries that are running large surpluses. …
Given figures on the hundreds of billions of dollars lost annually because of tax sheltering, the gains from a global effort to prevent capital income from escaping taxation are at least comparable to those from highly controversial trade agreements. And such measures would make possible more support for the middle class. …

Poverty crosses party lines (w Data; 11/3/2016) | @ekneebone @BrookingsInst
BrookingsInst PovertyCrossesPartyline 2016-10-21
… Although the poverty rate is higher in districts represented by Democrats, most poor people in the United States live in a community represented by a Republican. …
Between 2000 and 2010-14, the poor population grew faster in red districts than blue. …
Almost every congressional district saw its poor population grow in the 2000s, owing largely to growing suburban poverty. …
Table 1. Congressional Districts with the Fastest Growth in Poor Population, 2000 to 2010-14
Between 2000 and 2010-14, the poverty rate increased in 96 percent of Republican districts and 86 percent of Democratic districts. …
Table 2. Congressional Districts with the Largest Poverty Rate Increases, 2000 to 2010-14
All but two congressional districts are home to at least one area of high poverty. …
Conclusion

White neighborhoods get modestly more diverse, new census data show (12/13/2016) | William H. Frey @BrookingsMetro
“Less white” white neighborhoods
… The modestly less-white character of neighborhoods where whites reside is not unique to just a few individual metropolitan areas. It is occurring, to some extent, in all 100 large metropolitan areas, and is especially noticeable in the 51 major metropolitan areas with populations exceeding one million (see Table 1). …
Black and Hispanic neighborhood segregation
… There continues to be wide variation in segregation among the nation’s 51 major metropolitan areas (see Table 2). …

An agenda for reducing poverty and improving opportunity (w PDF; 10/7/2016) | Edward Rodrigue & @isawhill @BrookingsEcon


US Policy Changes Vol.41 (Deregulation/Reform Vol.6 – finance, Federal Reserve)

Here are articles on financial deregulation, and reforms of the Federal Reserve System and the International Monetary System. Excerpts are on our own.

Adapting regulation for the FinTech world (12/4/2016) | @Aarondklein @RegBlog @BrookingsEcon
With the stroke of a pen, the Consumer Financial Protection Bureau (CFPB) quietly modernized regulations associated with a 38-year-old law to bring consumer safeguards to today’s mobile world.
…wide-ranging protections to pre-paid cardholders. …protections to cover electronic person-to-person payments, like those made via PayPal.
Congress solved this problem by enacting the Electronic Funds Transfer Act of 1978 (EFTA). The Act offered a straightforward solution: clear guidelines assigned liabilities to the parties regarding their rights and responsibilities concerning this new piece of property, the debit card. EFTA, and its associated regulations, assigned limited liability to consumers of between $50 and $500, assuming that the consumers reported their loss in a responsible and timely manner. Banks assumed substantial liability, which subsequently motivated them to create secure networks with robust fraud detection.
… In the Coasean world, the proper role of government is to assign property rights clearly, allow them to be traded, and then get out of the way. Relying upon several key assumptions of perfect information and no transaction costs, Coase theorized that the market would efficiently sort out the rest. While the real world often violates these assumptions, the Coase Theorem is practical enough to rank among the most cited economic theories. In the case of assigning liability and property rights for financial transactions, Coase’s ideas have worked remarkably well.
…the Dodd-Frank Wall Street Reform and Consumer Protection Act. First, the legislation explicitly brings remittances into the EFTA framework. I worked on this section of Dodd-Frank both prior to and during its enactment. By including remittances, EFTA expanded to cover transactions that occur outside of the banking system and traditional consumer accounts. Dodd-Frank also moved responsibility for EFTA from The Federal Reserve to the CFPB. …
… Use of these cards reportedly has grown from $1 billion in 2003, to $40 billion in 2010, and researchers expect pre-paid cards will generate $100 billion this year. …
Moving money is all about trust. Markets work more efficiently when consumers, businesses, payment processors, and financial institutions all trust each other. The CFPB’s actions in modernizing EFTA regulations marks an important step forward in creating a regulatory regime that enhances trust, provides the legal and regulatory framework to assign rights and responsibilities, and allows the market to work and innovate. …

Message to the candidates: Hands off the Federal Reserve (10/25/2016) | Alan Blinder @BrookingsEcon

The international monetary system: Is it fit for purpose? – To fix the international monetary system, first get domestic policies right (w PDF; 10/5/2016) | @EswarSPrasad @BrookingsEcon
1.1 WHAT’S THE ISSUE?
1.2 WHAT’S THE DEBATE?
1.3 WHAT TO WATCH OUT FOR?

The Challenge of Central Banking in a Democratic Society (12/5/1996) | Alan Greenspan – 1996 Francis Boyer Lecture @AEI Annual Dinner
… William Jennings Bryan… “…you shall not crucify mankind upon a cross of gold.” …
… The experiences with paper money during the Revolutionary War were decidedly inauspicious. “Not worth a Continental” was scarcely the epithet one would wish on a medium of exchange. This moved Alexander Hamilton, with some controversy, to press for legislation that established the soundness of the credit of the United States by assuming, and ultimately repaying, the war debts not only of the fledgling federal government, but of the states as well. Equally controversial was the chartering of the First Bank of the United States…
…endeavored to restrict state bank credit expansion when it appeared inordinate, by gathering bank notes and tendering them for specie. This reduced the reserve base and the ability of the fledgling American banking system to expand credit. The issue of states’ rights and concern about the power of the central government reflected the free wheeling individualism of that time. The Second Bank was a major issue of the election of 1832. …
After the Civil War, redemption of the paper greenbacks issued during the war brought an era of a gold-standard induced deflation…
…the rural-based pressures for a more elastic currency did not diminish and ultimately were reflected, in part, in the creation of the Federal Reserve.
Nonetheless, many of the proponents of banking reform in the 1890s, and in the aftermath of the Panic of 1907, were suspicious of creating a central bank. In very large measure, those concerns underlay the various threads of reform that were joined together in the design and creation of the Federal Reserve System in 1913. …
The world changed markedly with the advent of the Great Depression of the 1930s, and the evisceration of the gold standard. …
… The 1970s saw inflation and unemployment simultaneously at relatively elevated levels for some time. The notion that this could occur was nowhere to be found in the conventional wisdom…
… Monetarism, and new insights into the effects of anticipatory expectations on economic activity and price setting, competed strongly against the traditional Keynesianism. …
… That inflation could reduce employment was a highly controversial subject in the mid-1970s when introduced into communique language drafts. … Today in similar communiques such language is accepted boiler plate and rarely the focus of discussion. …
… It is generally recognized and appreciated that if the Federal Reserve’s monetary policy decisions were subject to Congressional or Presidential override, short-term political forces would soon dominate. …
Because monetary policy works with a lag, we need to be forward looking, taking actions to forestall imbalances that may not be visible for many months. …
Augmenting concerns about the Federal Reserve is the perception that we are a secretive organization, operating behind closed doors, not always in the interests of the nation as a whole. This is regrettable, and we continuously strive to alter this misperception.
… We have recently commenced to announce all policy actions immediately, federal funds rate changes as well as discount rate changes, and have expanded the minutes of the Federal Open Market Committee.
… Inflation concerns were not a dominant factor in economic forecasting in the 1950s and early 1960s, for example. Since the late 1970s, however, such concerns have become an important element in policy-making. …
…during the decades of the 1970s and 1980s, trends in money supply, first M1, then M2, were useful guides. …
Unfortunately, money supply trends veered off path several years ago as a useful summary of the overall economy. …
… As we seek price stability and maximum sustainable growth, the changing economic structures constantly present more analytic challenges.
…we will remain as the guardian of the purchasing power of the dollar. But one factor that will continue to complicate that task is the increasing difficulty of pinning down the notion of what constitutes a stable general price level.
… We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability. … But we should not underestimate or become complacent about the complexity of the interactions of asset markets and the economy. Thus, evaluating shifts in balance sheets generally, and in asset prices particularly, must be an integral part of the development of monetary policy.
The rapidly changing technologies of recent years… …where specific priced services have become effectively and competitively provided by private sector suppliers, the Federal Reserve needs to reassess whether the extent of our participation in those services fulfills a reasonable public purpose. …
Finally, the substantial changes under way in bank risk management are pressing us to continuously alter our modes of supervision and regulation to keep them as effective and efficient as possible.
… Recent mini-crises have identified the rapidly mushrooming payments system as the most vulnerable area of potential danger. …we have endeavored in recent years, as the demands on our system have escalated (we clear $1-1/2 trillion a day on Fedwire), to build in significant safety redundancies. …
A democratic society requires a stable and effectively functioning economy. …


US Policy Changes Vol.40 (Foreign Policy Vol.6 – Israel-Palestine, Iran)

Here are articles on Israel-Palestine, Saudi Arabia, and Iran. Excerpts are on our own.

Dump UNRWA, vote on 2008 peace agreement? (1/2/2017) | @mrubin1971 @TheNatlInterest @AEI
…declaring Israel’s settlement policies to be the chief impediment to Arab-Israel peace. “The two-state solution is the only way to achieve a just and lasting peace between Israelis and Palestinians,”…
…for example, the negotiated agreements rejected by the Palestinian leadership and Palestinian President Mahmoud Abbas’ refusal to negotiate during Israeli Prime Minister Benjamin Netanyahu’s previous settlement freeze.
…erased much off the progress made since the 1993 Oslo Accords.
He might, however, have unintentionally opened a new door to opportunity. …not by repeating past diplomatic mistakes but rather by setting them aside.
The first Intifada—Palestinian uprising against Israeli rule—occurred between 1987 and 1993. It was a largely grassroots movement. The Palestine Liberation Organization was in exile in Tunisia and had become increasingly irrelevant to events in the Gaza Strip and West Bank. …
It is time to reverse that gamble on dictatorship over democracy. Abbas, now in the 12th year of his four year presidential term, violated the basis of the Oslo Accords repeatedly by bypassing bilateral negotiations to seek unilateral redress at the United Nations. …
… If a Trump administration puts a Palestinian state to a vote, it would empower the Palestinians to achieve their dreams without being held hostage to their corrupt leadership or pressures from an Arab rejectionist block of a newly-empowered Islamic Republic of Iran.
… Today, its annual budget is $1.4 billion. If the Trump administration pushed for UNRWA’s dissolution more than six decades after its mandate was supposed to expire and channeled the US contribution instead to host the referendum among those currently living in the West Bank and Gaza Strip, Palestine could be independent in a year. …
… Palestinians have historically received more assistance per capita than any other people and, even in Gaza, they have a higher standard of living than many Turks, Brazilians, fellow Arabs, and Africans.
Money dumped on the West Bank and Gaza could be better spent on Yemenis, Syrians, Rohingya Muslims, Turkey’s Kurds, displaced Ukrainians, or others. … So if the Palestinians vote no, it is time to declare the Oslo era—and the Palestinian Authority upon which it was built—over, give Israel an open hand to secure its borders as it sees fit, and write the Palestinians off until they reconsider.

Is a peace deal possible if Israelis and Palestinians simply don’t trust each other? (1/3/2017) | @braunold & @SarahEYerkes @BrookingsFP
MIND THE GAP
… Throughout the Obama administration, the U.S. Agency for International Development (USAID) provided $10 million a year in funding reconciliation programs between Arabs and Jews, Israelis and Palestinians. …
BALL IN TRUMP’S COURT
– Senior level advisors, including the new advisor for International Negotiations Jason Greenblatt, meeting with not just the parties, but civil society groups privately as well publically;
– Inclusion of the USAID people-to-people reconciliation grant program into the federal budget; and
– Leveraging U.S. dollars off those of the rest of the international community in the creation of an International Fund for Israeli-Palestinian Peace, which currently enjoys bipartisan support, that can provide the necessary bandwidth and budget for a systemic approach to the trust deficit.

Obama’s record on Israeli-Palestinian peace: The president’s disquieting silence (10/6/2016) | @elgindy_ @ForeignAffairs @BrookingsFP

What JASTA will mean for U.S.-Saudi relations (10/3/2016) | Bruce Riedel @BrookingsFP

What Jeff Sessions as attorney general will mean for the Iran Deal (12/16/2016) | @aaron_m_arnold @BulletinAtomic
While the attorney general does not have any big role to play directly in terms of the Iran deal,… …the Justice Department’s actions can carry a ripple effect.
…the attorney general decides if and when the department should undertake investigations or prosecutions related to currently existing Iran sanctions?regarding things such as Iran’s conventional missiles, its sponsoring of terrorism, its possible human rights violations…
…enforcement of the laws relating generally to export controls and sanctions regarding Iran could have an impact on the deal…
…should increase pressure on Iran’s ballistic missile program with sanctions and aggressively confront any violations of the deal…
… To be fair, however, he has remained somewhat quiet about the deal…
…the International Emergency Economic Powers Act (IEEPA)…
… Between the year 2000 and July of 2016, the Justice Department pursued approximately 293 IEEPA criminal violations. …
…during the nuclear negotiations with Iran, and in the months thereafter, the Obama administration took a decidedly cautious approach to seeking criminal charges against Iranian procurement agents and sanctions violators. …
…US enforcement agencies were hesitant to seek extradition requests or conduct lure operations…
… Sessions’ approach will depend on his relationship with the White House. …
…the 981(k) statute, named after the corresponding section of the USA Patriot Act. Under this rule, the attorney general can seize assets that are not technically held in US bank accounts. …
… Because these methods depend on leveraging the role of the US financial system in international banking, overuse can potentially damage business relationships and the international standing for US banks…
…any member of the agreement can bring a dispute to the Joint Commission, which then has 15 days to resolve the dispute. If not resolved by that time, the matter is referred to the Ministers of Foreign Affairs and then the UN Security Council for a vote on continuing sanctions. …
… If the United States does not first use the dispute resolution mechanism, Tehran may view Washington as acting in bad faith.
… Tougher penalties for IEEPA violations, for example, could send a strong signal to Iran, China, and North Korea. …

The 2016 Iranian Parliamentary Elections and the Future of Domestic Politics under the JCPOA (w PDF; Dec 2016) | Payam Mohseni @BelferCenter
p8 Figure 1 Classification of Iranian Political Factions
p12 Figure 2 The Alliance of the Theocrats: Ahmadinejad, 2005?2013
p15 Figure 3 The Alliance of the Right: June 2013?February 2016
p17 Figure 4 Power Triangle of the Rouhani Coalition: June 2013?February 2016
p19 Figure 5 Tension of Right Alliance vs. Republican Alliance, 2016 Parliamentary Elections
p21 Figure 6 Republican Alliance vs. Theocratic Alliance: 2016 Iranian Parliamentary Lists
p26 Table 1 National Factional Seat Shares (%) by Election Rounds in the 10th Iranian Parliament
p27 Figure 7 Total Factional Seat Shares (%)
p29 Figure 8 Round Two Factional Seat Shares (%)
p34 Figure 9 Participation Rate
p34 Figure 10 Voting Population
p35 Figure 11 Qualified Candidates
p37 Figure 12 Incumbency Rate for the Iranian Parliament
p41 Table 2 Iranian Provinces by Voter Turnout (%)
p42 Table 3 Top Provinces by the Three Main Faction
p43 Table 4 Iranian Provinces by Factional Seat Share (%)
p44 Table 5 Top 10 Largest Cities by Factional Seat Share (%)
p46 Figure 13 Total Top-10 Cities by Factional Seat Share (%)
p47 Figure 14 Total Top-10 Cities by Factional Seat Share (%) – Excluding City of Tehran
p51-52 Conclusion: The Future of Iranian Politics under the JCPOA
… With theocratic forces split over the key foreign policy issue defining Iran’s relations with the international community, Rouhani was able to barely edge to victory in the first round of elections, trumping five other rivals.
… The next presidential elections, in 2017, will therefore reflect the ability of Rouhani to preserve and manage the power triangle between the republicans and the modern theocrats to hold on to the government and Majles. … If the U.S. unilaterally undertakes antagonistic actions against Iran, the entire political platform of Rouhani’s coalition will collapse and a reconfiguration aimed at reintegrating the theocratic left will likely emerge.
… At a minimum, together with the unrealized economic benefits expected to follow the JCPOA, the theocrats will gain a stronger bargaining position with Rouhani. However, it could also be an electoral strategy to highlight economic inequality under Rouhani with an eye to the 2017 presidential elections. Either way, the re-election of a weak Rouhani or a theocratic victory is a win-win scenario for the Supreme Leader. …


US Policy Changes Vol.39 (Miscellaneous Vol.4 – Sandy)

Here is a report: “THE IMPACT OF SUPERSTORM SANDY ON NEW JERSEY TOWNS AND HOUSEHOLDS” (PDF; October 2013) | Stephanie Hoopes Halpin (cf Rutgers-Newark Report: Superstorm Sandy Recovery Short $28.3 Billion; Pain Spread Across NJ).

EXECUTIVE SUMMARY
… the total cost of damages exceeds $37 billion ($7.8 billion for residents, $3.56 billion for businesses and $2.2 billion for municipalities plus $23.5 billion for hazard mitigation). Insurance has paid $6.5 billion, public assistance has provided $1.3 billion, and relief agencies have raised $146 million. In addition, the Small Business Administration provided $816 million in disaster loans. The remaining unmet need in New Jersey is $28.4 billion.

INSTRUCTION
… This report also provides the means to compare the impact across New Jersey’s 21 counties and 553 municipalities that lost power or reported damage (of 565 New Jersey towns). …
How did communities fare in recovering from Sandy?
Figure 1.
How did ALICE households fare?
What Qualifies for FEMA Assistance?

I. COMMUNITY HARDSHIP RESULTING FROM SUPERSTORM SANDY
Figures 2.~9.

II. HOUSEHOLD HARDSHIP RESULTING FROM SUPERSTORM SANDY
Figures 10.~14.

III. ALICE HARDSHIP AND RECOVERY
Figures 15.~19.

IV. MUNICIPAL RESPONSE
Figures 20.~27.

V. HOW WELL DID RESOURCES MEET NEEDS?
Figures 28.~37.

VI. CONCLUSION – PREPARATION FOR THE NEXT DISASTER
Figures 38.

~p66


US Policy Changes Vol.38 (Infrastructure Vol.4 – public investment, sustainability, megachanges, cities)

Here are @BrookingsInst’s articles on infrastructure, public investment, sustainability, megachanges and cities. Excerpts are on our own.

The Hutchins Center Explains: Public investment (1/3/2017) | Anna Malinovskaya and @davidmwessel @BrookingsInst
WHAT IS INVESTMENT? HOW IS IT DIFFERENT FROM OTHER TYPES OF GOVERNMENT SPENDING?
Public spending can be divided into consumption and investment. Consumption spending goes for goods and services that produce benefits today, such as health care for the elderly or mowing the lawn on the Washington Mall. Investment is spending that will provide benefits in the future, such as scientific research or building a new highway or better educating children. …
…traditionally defined: local, state and federal government spending on physical infrastructure and research and development. Broader definitions of public investment include education, health care and other benefits for children that pay off in the future. …
WHERE DOES THE GOVERNMENT SPEND PUBLIC INVESTMENT DOLLARS?
WHAT ARE THE TRENDS IN INVESTMENT AT ALL LEVELS OF GOVERNMENT?
In 2015, spending on structures, equipment, software and research and development at all levels of government was equivalent to about 3% of GDP. Net government investment — that is, government spending on infrastructure minus the deterioration of old infrastructure – was a small fraction of that: close to 0.5% of GDP…
…recent public discussion of government investment focuses on the non-defense activities that have a clearer link to private-sector productivity growth, profits and wages. Net…trending down…
…done at the state and local level, some financed by federal grants and some by local borrowing or taxes. …
WHY HAS INFRASTRUCTURE SPENDING BEEN DECLINING?
… One possible explanation may be the lingering effects of the Great Recession; for example, a slow recovery in property tax receipts that many local governments rely on to finance infrastructure projects. Another possible explanation may be that the Great Recession made many state and local governments postpone capital projects due to worries about the debt…
… The Congressional Budget Office (CBO) estimates that by 2023, federal non-defense investment (including grants to state and local governments) will be less than two thirds of its average share of GDP from 1962 to 2012. These projections, however, are based on the assumption that discretionary spending caps…
HOW DOES PUBLIC INFRASTRUCTURE SPENDING VARY ACROSS THE STATES?
State and local capital spending – on buying, building and renovating buildings as well as buying land, equipment and structures – declined in most states between 2000 and 2014…
WHAT’S THE CASE FOR SPENDING MORE ON INFRASTRUCTURE?
HOW DOES THE FEDERAL GOVERNMENT PAY FOR INFRASTRUCTURE?
Federal spending. … In 2015, federal capital grants accounted for about 22% of state and local gross investment. … The Highway Trust Fund, for instance, is largely funded from the 18.4-cent-a-gallon federal tax on gasoline…
Public-Private Partnerships. … For example, a private company might borrow money to build a road, and then collect tolls to pay off the bonds. …
Tax subsidies for state and local borrowing. …issuing municipal bonds – obligations that entitle owners to interest plus repayment of principal at a specified date… …this federal subsidy allows states and localities to borrow more cheaply than corporations. …Build America Bonds program…
WHAT OTHER IDEAS FOR FINANCING INFRASTRUCTURE ARE BEING DISCUSSED?
Infrastructure bank. …direct loans, loan guarantees and lines of credit…
Tax credits for private investors. …Peter Navarro…Wilbur Ross…giving private contractors tax breaks for investing in infrastructure… …private contractors will concentrate their investments on the most profitable projects and shun projects that are needed but can’t produce a commercial return, such as repairs in public schools.

5G technologies will power a greener future for cities (11/30/2016) | @jtkarsten @BrookingsGov
… In a new paper, Darrell West outlines the ways in which cities can apply these technologies to use scarce natural resources more efficiently. …
… Poor water and air quality pose an immediate threat to public health in some cities, while a continued reliance on fossil fuel energy contributes to rising temperatures worldwide. For water, wirelessly connected sensors can detect contamination and identify ways to reduce waste. …water leaks in U.S. households waste 1 trillion gallons of water every year, enough to fill 1.5 million Olympic-sized swimming pools. … Agriculture alone accounts for 80 percent of water demand in the U.S…
5G technologies…smarter transportation management systems. … Drivers in Washington D.C. averaged 82 hours spent stuck in traffic each year, while drivers in China and India face even greater amounts of time burning fuel but going nowhere. …
…buildings also use large quantities of energy for lighting, heating, cooling, and other operations, accounting for as much as 42 percent of global energy consumption. … Meters installed in the Empire State Building measure energy use for each of 100 tenants, and slashed energy costs by 38 percent, saving $4.4 million each year.
…governments must allocate enough wireless spectrum to satisfy the demand of new technologies, and develop international standards for which frequencies will carry 5G signals. …
see
Achieving sustainability in a 5G world (w PDF; 11/30/2016) | @DarrWest @BrookingsGov

Five megachanges that could transform the world (10/5/2016) | @DarrWest @BrookingsGov
ROBOTS TAKE THE JOBS
LIFE IS ABUNDANT AROUND THE UNIVERSE
RISING SEAS FLOOD THE COASTS
EUROPE TURNS RIGHT AND UNDERMINES DEMOCRACY
IRAN GETS A NUCLEAR BOMB
THE IMPORTANCE OF IMPROVING GOVERNANCE

A driverless future for our cities (9/26/2016) | @bruce_katz @BrookingsMetro


US Policy Changes Vol.37 (Trade Vol.5 – metro areas, currency exchanges, globalization)

Here are @BrookingsInst’s articles on trade, metro areas, currency and globalization. Excerpts are on our own.

Americans most affected by trade voted for Trump (12/14/2016) | @joeparilla and @MarkMuro1 @BrookingsMetro
… Economic theory acknowledges that global trade offers benefits that should be celebrated and exacts costs that cannot be ignored. As the Council on Foreign Relation’s Edward Alden details in a new book, this reality led to the creation of the U.S. Department of Labor’s Trade Adjustment Assistance (TAA) in 1962. …
brookingsinst-tradedisplacement
The program’s Consolidated Petitions Database, which has been geocoded and provided online by Public Citizen, offers an estimate of the number of workers at trade-affected companies, including both layoffs and employment reductions through attrition. …
… Since 1994, the top 10 metro areas in terms of total TAA-certified workers include the largest metros in the country — New York, Los Angeles, Chicago, Dallas, Philadelphia, and Boston. Also in the top 10 are export-intensive midsized metros like Detroit, Charlotte, and Portland. El Paso — on the U.S.–Mexico border — rounds out the top 10. Small metro areas—those with populations between 50,000 and 500,000—house 21 percent of TAA-certified workers while micropolitan areas (those with populations under 50,000 residents with a core city of at least 10,000) and rural areas account for a combined 29 percent of TAA-certified workers.
… the most intense effect of trade displacement is in smaller communities in the Midwest and South… …the Carolinas, Tennessee, Pennsylvania, and parts of Ohio and Michigan that depend on manufacturing industries that are subject to global competition and technological automation (Map 1). …
Yet business as usual will not suffice. The TAA program, as it is currently deployed, has not been particularly effective in helping displaced workers. Its scale is insufficient relative to the scale of displacement. Indeed, MIT’s David Autor and colleagues find that most displaced workers rely on Social Security and disability benefits rather than the retraining resources provided by TAA. …

Rise in dollar shows short-term support of Trump’s pro-business platform (12/7/2016) | Barry P. Bosworth @thehill @BrookingsEcon
… However, it is also important to view these changes from a longer-term perspective where the value of the dollar has been steadily appreciating for the past five years – 30 percent since early 2011. During that period the United States has been a lone bright spot in the global economy.
With unemployment below the historic norm, record levels of corporate profits, and the Federal Reserve now poised to raise interest rates, financial capital is being redirected to dollar-denominated assets. It is the judgment of global investors that the United States has completed its long recovery from the financial crisis and is on the verge of a return to normality. …
… On the other hand, for those who are employed in export-based jobs, the high cost of American-made goods will tend to drive down exports and increase the pressures to produce abroad.
Second, for comparisons with trade, it is important to focus on real, or inflation-adjusted, values since, for many countries, the change in the nominal exchange rate is simply an offset to relatively high rates of domestic inflation. …
… Most recent studies of U.S. trade suggest a lag response stretching over 2-3 years.
Those studies also typically conclude that a 10 percent appreciation of the dollar would lead to a long-run increase in the U.S. trade deficit by about 1 percent of GDP. Thus, we should anticipate that a continued strong dollar should exert a drag on the U.S. economy as a widening of the trade deficit from the current 3 percent of GDP to about 4 percent in the next 1-2 years.
… At present, the strong dollar reflects investors’ relative optimism about their prospective returns on dollar-denominated assets, and not a precursor of a deteriorating trade performance. …

Donald Trump and the future of globalization (11/18/2016) | @BrinaSeidel and @laurencechandy @BrookingsInst
Figure 1: Globalization trends, 1870-2015
Figure 2: Global shares of trade, capital markets, and migration
We may see countries retaliate against U.S. protectionist policies. … The threat has already been made explicit by the state-sponsored Chinese tabloid, Global Times, which proposed that China respond to aggressive trade policies by cancelling contracts with U.S. suppliers…and by…Nicolas Sarkozy who has suggested that the Europe Union impose a tax on U.S. products and limit the participation of foreign companies in EU public contracts if Trump withdraws from the Paris climate accord.
… In the past week, politicians from Italy, Hungary, Greece, and elsewhere have invoked Trump’s victory as justification for policies that reverse the pattern of globalization.
Alternatively, countries may repudiate global norms and institutions that underpin the globalized economy, if they feel that the U.S. is no longer committed to upholding the liberal economic order. …

Is globalization’s second wave about to break? (w PDF; 10/4/2016) | @BrinaSeidel and @laurencechandy @BrookingsInst
… Globalization’s first wave, which lasted from 1870 to 1914, is viewed today as the embodiment of the liberal open economic paradigm. … For instance, around half of all British savings were channeled abroad over this period, while half of Argentina’s entire capital stock was foreign owned by 1914. …
… The passage of the Smoot-Hawley Tariff act in the U.S. against the backdrop of the Great Depression set off a retaliatory backlash among the world’s major economies that crippled global trade. …
The essence of globalization is the movement of goods, money, and people across international borders. …Figure 1
We find that, while the process of economic integration has slowed, there is only limited evidence so far of an absolute decline. In addition, today’s level of integration matches or exceeds the heights of globalization’s first wave. This could equally imply that globalization has reached unsustainable levels or that no such levels exist.
… First, one of our three series (goods) is a measure of flows, whereas the other two (money and people) are measures of stocks. … Second, our series for goods and money are expressed in terms that differ from contemporary measures cited in economic reports and the media. …
GOODS
… At the end of the first wave of globalization in 1913, merchandise exports peaked at 7.9 percent of global GDP. That peak was surpassed as early as 1970, when tariff reductions under the General Agreement on Tariffs and Trade were still at an early stage, the standardization of shipping containers was being established, and the rise of export manufactures from the developing world had yet to occur. Goods exports have since been propelled to far greater heights, reaching 19.7 percent of global income in 2008.
That share stood at 15.1 percent in 2015, having declined continuously for the previous four years. …
The recent slump in trade growth… Both cyclical and structural factors are at work. The latter include the exhaustion of gains from both the incorporation of previously-closed economies into global markets and the fragmentation of value chains across borders—commonly referred to as the second unbundling. …
… While trade in services is considerably smaller than trade in goods, its value as a share of global GDP has doubled in the past 30 years and has proved more resilient during the recent trade slowdown… Figure 2
…the trend towards creeping protectionism using non-tariff barriers. … This risk is real, but for now remains speculative. …
MONEY
… Contemporary annual estimates from 1990 onward are built at the country level from independent estimates of external debt, foreign direct investment (FDI), and portfolio equity stocks. …
Four caveats are immediately worth noting. …
During the first wave of globalization, the developing world’s foreign capital stock peaked at 32.4 percent of GDP in 1914. … Despite falling precipitously during the Great Recession…30.1 percent, is at its highest level in a century. …
FDI’s rise is a defining component of globalization’s second wave and is synonymous with the growing role of international finance beyond traditional areas such as railways and extractive industries into new sectors including commerce and industry.
…the foreign-held portfolio stock as a share of low-income country GDP remains negligible at only 0.4 percent in 2014. …
…debt relief, and the nurturing of domestic debt markets through the issuance of debt denominated in domestic currency and the encouragement of purchases by local financial institutions. …
Concerns about the de-globalization of foreign capital since the Great Recession have centered on a different phenomenon: the reduction in inter-bank lending. …
Figure 3
MIGRATION
… Flows—as opposed to stocks—of long-distance migration along certain routes are well documented from ports and customs statistics. Other routes, especially those overland, are not formally recorded. Accounts of short-distance migration are missing altogether for most of the world. …
… Our benchmark for age at migration is the median age at entry of migrants to the U.S. each year, drawn from official U.S. records. Our benchmark for migrant’s life expectancy is U.S. life expectancy for the respective age, gender, and year of U.S. migrants, obtained again from U.S. records, and discounted by the ratio of U.S. life expectancy at birth to global life expectancy at birth. …
… At the end of globalization’s first wave in 2015, the global migrant stock is estimated to have peaked at 2.5 percent of the global population, although it stayed close to this level into the 1930s before beginning its descent. The share began to climb again in the 1970s and surpassed its previous peak for the first time in 1988. It rose further in the 2000s and today stands at 3.3 percent. …
The U.S. migrant stock hovered at close to 14 percent of its population throughout globalization’s first wave before falling precipitously. That share has rebounded since 1970 and in 2015 stands a fraction short of its historical high at 13 percent. …
Figure 4
…both the absolute number and global share of migration flows has remained relatively stable in the past two decades. …a lower age of migration, longer life expectancy for migrants, and/or lower return rates. …
CONCLUSION
Table 1: Benchmarking globalization across two waves
… The past two decades have been described as an era of hyper-globalization during which both the level and rate of global integration was judged as having intensified. Based on our analysis, it is reasonable to conclude that this period is over. … Our speculative assessment is that the coming years will be characterized either by stabilization in the level of globalization, or further growth in the degree of integration but at a more modest pace than in the past.

The case for the Trans-Pacific Partnership (10/4/2016) | @solis_msolis @BrookingsFP


US Policy Changes Vol.36 (Foreign Policy Vol.5 – Israel-Palestine, Russia, Iran, Syria)

Here are @BrookingsInst’s articles on foreign policy (Israel-Palestine, Russia, Iran and Syria). Excerpts are on our own.

President Trump’s options for Israeli-Palestinian dealmaking (12/1/2016) | @Martin_Indyk @BrookingsFP (Big Ideas For America)
…three possible approaches to negotiations—a provocative, high-risk “top-down” approach that would focus on the contested status of Jerusalem; a more measured “bottom-up” approach that would work with regional players to change the situation on the ground; and a summit-driven “outside-in” approach that would establish internationally supported terms of reference for negotiating a two-state solution. …
INTRODUCTION
…but he would be the first real estate developer to try to reach for the “brass ring,” and his experience with making land deals as well as his unconventional, disruptive approach to diplomacy might just generate new possibilities when all other efforts have failed. However, President Trump would be taking on the task at a uniquely difficult moment when neither side trusts in the peaceful intentions of the other or believes in the possibility of a peace deal based on the establishment of a viable Palestinian state living alongside the Jewish state of Israel in peace and security.
This “two-state solution” has been thwarted by two abiding realities… The first is the power of the Israeli settler movement and its supporters in…right-wing coalition government. They regard all West Bank territory as part of the Land of Israel and firmly reject the two-state solution. Consequently, they are pursuing apace an effort to annex the 60 percent of the West Bank that remains under complete Israeli control (known as “Area C” in the Oslo Accords…)… attempting to legalize some 50 outposts that are illegal under Israeli law, and preventing any Palestinian development of the land.
The second reality is a politically and physically divided Palestinian polity in the West Bank and Gaza Strip… Hamas remains dedicated to the destruction of Israel and is consolidating its grip on Gaza while building its influence in the West Bank. Meanwhile, Fatah…has left its leadership preoccupied…
… The alternative of forming a more flexible centrist coalition with the Labor Party would leave him dependent on parties to his left while his rivals to his right robbed him of the support of his natural constituency. Meanwhile, Abbas’s electoral mandate expired some six years ago, and he no longer feels he has the legitimacy to make compromises over what his people believe are their inalienable rights. …
…current circumstances do not permit the achievement of a negotiated resolution of the Israeli-Palestinian conflict, and yet failure to pursue that resolution now will make it even less possible to achieve it in the future. …
1. “Jerusalem first”
… One of the basic rules of Israeli-Palestinian negotiations is that the status of Jerusalem is an issue that should be left until all the other issues are resolved. …
…neither side accepts the legitimacy of the other’s claims. Arab east Jerusalem was annexed to Israel in 1967, and since then every Israeli government has claimed undivided Jerusalem as “the eternal capital of Israel.” … Conversely, Palestinians claim all the area of east Jerusalem that Israel occupied in 1967, including the Old City, as the capital for their state, and view the Jewish suburbs built there as illegal. …
… The area bounded by the walls of the Old City, which contains the sites holiest to the three great religions…would be declared a special zone where neither side would exercise their claims to sovereignty… However, such rational compromises have not proven remotely acceptable to either side.
… Hamas might resume rocket attacks from Gaza, but because of fear of an Israeli response they would more likely seek to stoke the fires of violent resistance in the West Bank and Jerusalem. …
Alternatively, in parallel with moving the U.S. embassy in Israel to Jerusalem, the president could also announce that he has decided to establish a U.S. embassy to the state of Palestine in east Jerusalem…
To ensure that both sides negotiated in good faith, President Trump could declare that if they fail to turn up or fail to reach agreement, the Quartet, Egypt, and Jordan would resort to a UN Security Council resolution setting out the parameters of the rational solution on Jerusalem, in effect threatening to impose it on the two sides. …
2. Bottom-up
… In his first two years, he would instead focus on arresting the negative dynamics on the ground in the West Bank and work with Egypt and Jordan to promote a united Palestinian leadership with a mandate to negotiate peace with Israel.
Under this option, he would need to insist at the outset that Israel stop all construction east of the security barrier… Construction in east Jerusalem could also continue but on a 1:1 basis for building in Arab as well as Jewish suburbs. There could be no construction in E1 or other sensitive areas…
… In return, the building of state institutions and the development…should be boosted by a new injection of funds from the United States, the Arab states, and the international community.
3. Outside-in
…might consider taking up “outside in” approach, which would involve Trump convening the leaders of the Quartet (the United States, Russia, the EU, and the UN) and the Arab Quartet (Egypt, Jordan, Saudi Arabia, and the United Arab Emirates)… …to draw on the collective will of the international community to jumpstart direct negotiations based on these agreed principles.
-…end the conflict, end all claims, and establish two states living side by side in peace and security.
-…the 1967 lines with mutually agreed swaps.
-…ensure that Israel can defend itself against any threat…
-…the shared capital…
-…UN General Assembly resolution 181…
NO PAIN, NO GAIN
… Neither Israelis nor Palestinians at this moment believe that peace is either possible or desirable because the costs seem too high and the benefits too small. For both leaders, the status quo is quite sustainable, even as outside parties fret that the two-state solution is being buried in the process. …
… Likewise, Palestinian weakness makes it particularly difficult to move them since, like a business venture that is close to bankruptcy, they can always threaten collapse if they are forced to compromise. Meanwhile, the Arab states are all preoccupied with other more serious threats to their security and stability. They will be reluctant to risk Palestinian ire or, for Egypt and Jordan, the unhappiness of their Israeli security partner, to assist the president…
President Trump will therefore have to be prepared to overcome all the local resistance that is now baked into the situation. He will also need to resist the advice of his experts…
… Despite all the friction with the Obama administration, Russia has been fully supportive of Secretary Kerry’s efforts, so President Trump can easily find common ground with President Vladimir Putin. Similarly, he will find a willing partner in the EU, which believes that the failure to solve the Palestinian problem exacerbates the other Middle Eastern conflicts that threaten stability in Europe. While the Arab states will be more reluctant to take risks, President Sissi and King Abdullah both strongly believe in the importance of a resolution of the Israeli-Palestinian conflict for their own well-being. The Gulf Arabs are less persuadable, but will be attracted by the ability to engage openly with Israel…

Draw red lines on Russia (11/30/2016) | @steven_pifer @TheNatlInterest @BrookingsFP
… Part of the problem is that domestic political factors drive much of Vladimir Putin’s foreign policy. With a stagnant economy, he cannot base regime legitimacy on rising living standards, as he did in 2000–2008. He instead has turned to nationalism at home and the restoration of Russia as a power-player abroad. …
– Reaffirmation of NATO’s decision to modestly boost its military presence in the Baltic states and Poland in the face of Russia’s more aggressive stance, coupled with an offer to explore ways to reduce tensions between the alliance and Moscow. …
– Support for Ukraine and the German-led effort to end the fighting in eastern Ukraine. …
– Readiness to cooperate on areas where U.S. and Russian interests converge. …beyond the New START treaty.

Why small steps on Russia are better than attempts at a grand bargain (11/30/2016) | Angela Stent @TheNatlInterest (@CarnegieCorp) @BrookingsFP
… First, every U.S. administration since 1991 has come into office seeking to improve ties with Russia and each of these resets has ended in disappointment… Second…a reprise of the Yalta agreement that divides the world into spheres of influence and does not challenge what he considers are Russia’s legitimate interests. …
… It might involve recognizing Crimea as part of Russia and lifting the economic sanctions on Russia imposed after the launch of a war in the Donbass that has claimed 10,000 lives so far. …

Trump could gut the Iran deal—but it was vulnerable all along (11/17/2016) | @MaloneySuzanne @BrookingsFP
TRUMP’S IRAN OPTIONS
…@RNephewCGEP…described Trump’s election as “the end game for the deal,” noting the centrality of the executive branch in implementing American obligations—specifically, waivers that provide for U.S. sanctions relief that is required by the JCPOA. …
On the other side of the spectrum are those—including the Iranians themselves—who highlight that the deal was negotiated by seven states and the European Union (not to mention endorsed by the U.N. Security Council)…
ESCALATION AHEAD?
… Serious Republican national security figures such as Senate Foreign Relations Chairman Bob Corker…recognize the dangers of alienating U.S. allies, most of whom are deeply committed to preserving the nuclear deal (with initial opponents like Israel and Saudi Arabia grudgingly accepting its utility). …
… Senior Republicans on the Hill have pledged to reverse Obama’s contentious efforts to go above and beyond the deal’s requirements for sanctions relief in hopes of preserving support for the deal within Iran. …
… New sanctions could stymie Iran’s efforts to attract foreign investment and rebuild trade ties with Europe and Asia. Even better, from the standpoint of the Republicans, they might prompt Tehran to abrogate the deal, since the Iranian leadership maintains—inaccurately, but with a voluble echo chamber in Europe and the United States—that any American sanctions contravene the nuclear deal.
… Finally, he has pledged to respond forcefully to any future Iranian provocation, such as harassment of American naval forces in the Gulf…
… With an impulsive and unschooled American president, counseled by a constellation of trigger-happy ideologues, the prospect of a military confrontation between Washington and Tehran…
A LEGACY IN PERIL
… Since last week, a range of Iranian officials have insisted that the JCPOA—and its more important byproduct, Iran’s international rehabilitation—are “irreversible.”
… Many of the red flags of the Iranian nuclear program—the Arak plutonium reactor, the stockpiles of near 20 percent enriched uranium, the industrial-sized enrichment capability—have been demobilized in a fashion that will take time to reconstitute. …
HOUSE OF CARDS
… However, the deal’s architects failed in one difficult but vital task: ensuring the agreement’s sustainability beyond the administration’s lifespan. …
…the deal incorporated sufficient ambiguity on sanctions to ensure that every future application of American pressure on Iran would be strenuously contested by Tehran—and that concerns about eroding Iranian commitment to the deal would compromise Washington’s vigilance in enforcing the residual measures. …
…the deal’s success never really rested on the terms and provisions…but rather in the ambitions that the agreement embodied.
This is in large part a consequence of the way that leaders on both sides framed the deal to generate domestic support. …
…the influx of capital remains sluggish—in part because of residual American sanctions as well as low oil prices…

Should we work with the devil we know against the Islamic State? (11/21/2016) | @dbyman @lawfareblog @BrookingsFP
…Ryan Crocker…
… Bashar Assad and his father before him imposed a brutal order on the country in the past. Assad the elder killed thousands during a civil war from 1978-1982, leveling parts of the city of Hama, a key opposition hotbed, as a lesson to those he defied him, particular Islamists tied to Syria’s Muslim Brotherhood. Both he and his son ruled as dictators, where torture and other human rights abuses were common. But say what you will, the jihadist problem in Syria was largely contained…
…Assad is pragmatic—for example, in 2013 he agreed to rid himself of chemical weapons in a successful effort to avoid U.S. air strikes (though…his regime reportedly used chemical weapons in the battle for Aleppo earlier this fall). …
… Diplomatically, U.S. allies like Turkey and Saudi Arabia would strongly oppose this policy and would probably work to undermine it. … Saudi Arabia has proven a major source of terrorist recruits and financing, while the Syria-Turkey border was a major crossing point for Islamic State recruits. …
… Russia and Iran are loathed in the Arab world because of their embrace of Assad, and a U.S. alliance with Syria and these powers would “prove” to already-suspicious Sunnis that the United States seeks to subvert their traditional dominance of the Arab world and encourage Iranian influence to spread. …terrorism is justified because the United States is at war with Sunni Muslims.
Additionally, although U.S. air power and other support would help Assad’s forces advance, the regime would be unlikely to pacify all of the country, at least in the near-term, given the size of the opposition. …even with support from the Lebanese Hezbollah and Shiite fighters from Iraq and Afghanistan…
…an Assad victory would be widely, and correctly, seen as a triumph for its biggest friend—the clerical regime in Iran.
Most important, morality matters. It is one thing to ally with Stalin against Hitler when engaged in a total war; it is another to make such a devil’s bargain in a lesser conflict when the U.S. enjoys overwhelming power. …
… The United States can continue the incremental but steady efforts to work with local factions in Iraq and Syria to shrink the Islamic State’s haven and put pressure on the group. It can continue the global intelligence effort…


France Vol.1 (France regions, history, technology, et al.)


US Policy Changes Vol.35 (Economy Vol.7 / Employment Vol.3: middle class, income, inequality)

Here are articles and radio programs on middle class, income, inequality, et al. Excerpts are on our own.

The American Middle Class Meltdown (Radio; 12/14/2015) | Jacob Hacker… @WBUR

Jacob Hacker’s Interview on Rising Inequality “Winner-Take-All Politics: How Washington Made the Rich Richer and Turned Its Back on the Middle Class” (Radio; 9/9/2015) | Jacob Hacker (Nation, Inside Charlotteville)

The Split: 19 reason the Democrats will remain divided – and what it means for the party’s future. (6/16/2016) | @newrepublic
…23 leading historians, political scientists, pollsters, artists, and activists…
Jacob Hacker… There’s a sense of, “We went with someone within the system, and look what happened—Republicans still tried to crush that person. So let’s go for the whole thing.” There’s a sense that supporting the Democratic establishment and going the conventional route hasn’t been that productive.

Why Money Flows Uphill:Power brokers choose economic efficiency over equality—in contrast to average Americans—economist Ray Fisman finds in study (12/15/2015) | @sararimer @BUexperts
…economic redistribution policies that benefit the middle class and poor almost always involve a cost in terms of lost, or wasted, resources—known as the “leaky bucket,” the term coined by economist Arthur M. Okun in his famous 1975 book, Equality and Efficiency: The Big Tradeoff. @RFisman’s co-authors are @PJakiela @UofMaryland, Shachar Kariv @UCBerkeley, and Daniel Markovits @YaleLawSch. …
The study, “The distributional preferences of an elite,” examines people’s attitudes toward two tradeoffs that shape social and economic policy: efficiency vs. equality and selfishness vs. fair-mindedness. “The tradeoff between selfishness and fair-mindedness informs the willingness of the haves to make sacrifices in order to aid the have-nots,” Fisman says. “And the tradeoff between efficiency and equality goes to the familiar conundrum of whether economic policy should concentrate on growing the economic pie or on promoting the pie’s even distribution.”
… More importantly, Fisman says, the study found that elites were much less willing to sacrifice efficiency for equality than were average Americans. (That is, elites care more about growing the size of the economic pie than ensuring everyone gets the same-sized slice.) …
… Equality-minded subjects were more likely to work for nonprofit organizations, with a focus on the equality-related rights and interests of the disenfranchised. Efficiency-minded subjects chose the corporate sector.
Fisman:… Studying an elite population is a novelty in itself, since it’s so hard to access…, yet so very important because of their outsized effect on policy. Second, …implications for how we think about confronting the problem of growing inequality in America.
… We are most certainly not invoking supply-side economics, which is essentially a “have-your-cake-and-eat-it-too” theory of income taxation. …under supply-side economics, everyone is better off.
… We measure efficiency by the extent to which the size of the pie—money available in the experiment, in our case—is maximized. It says nothing about how this pie is distributed amongst individuals. …we can use those tax proceeds to distribute income or improve educational opportunities or otherwise help the poor in ways that lead to a more equitable income distribution. In this case, we need to decide how much efficiency we’re willing to trade off for greater equality.
… Participants in the experiment confront this tradeoff when they face different “prices” of giving. You can think about this price as capturing how much societal wealth is lost when a more productive member of society redistributes to a less able—and hence, initially poorer—individual. …
You say that Yale Law students’ commitment to efficiency over equality is astonishing, given that they self-identified as Democrats rather than Republicans—and thus sided with the party of economic equality—by a factor of over nine to one. What about the difference between the rhetorical ideals of a political party and what it does in practice? Some people believe there isn’t much of a difference between Democrats and Republicans…
… In other work, Shachar, Pam, and I find that political affiliation is, for Americans overall, a strong predictor of efficiency orientation. So self-identified Democrats—who lean toward equality orientation—do, in fact, act in a manner that is in keeping with the rhetorical ideals of their party, relative to Republicans…
… What I take away from our study is that policymakers on both sides of the aisle might be more reluctant to implement redistributive tax policies that aim to narrow the gap between the rich and the poor, even if that’s something their constituents want or need. The study’s findings signal this disconnect between the preferences of the electorate and the elected. …

Study of Yale law students helps explain economic inequality, authors say (9/22/2015) | Debra Cassens Weiss @ABAJournal

Yale Professor Daniel Markovits on Economic Equality and Inequality (4/23/2016) | @RockefellerCtr
(1) modern meritocracy has transformed the character of economic inequality; (2) the hyper-meritocracy that has developed in the United States today benefits no one; and (3) merit itself has become a sham. …
According to Markovits, one of the biggest movements away from inequality has been the opening of elite schools to working class children and minority children from any religion or background – but this still has not eliminated inequality from the United States meritocratic structure. A higher share of Yale College students come from the top 1% of the income distribution than from the entire bottom half. The top quarter outweighs the bottom quarter by a ratio of 4:1. …
One student asked Markovits if he believed that, no matter what social structure changes, the economic elite will always find a way to enhance future generations. Markovits responded by citing the iron law of oligarchy: the elite will always manage to capture the greater share of the social share than it deserves and will reproduce this itself. Outstanding schools have in the past and will continue to spend their money and privilege wisely toward producing meritocratic end. …
As Markovits asserted, even if you are at the threshold of the 1%, with an annual income of around $375,000, you are still struggling to find a comfortable family home in areas such as New York, San Francisco, and London. The elite has grown so much that others are pricing you out of this market. The current deal for the elite – work long hours and get paid huge sums of money – is a less great tradeoff for the elite. No one wins…
“My biggest advice… “I for one never accept meetings before noon because the morning is my own time.”

IS AMERICA AN OLIGARCHY? (4/18/2014) | @JohnCassidy @NewYorker
… After examining differences in public opinion across income groups on a wide variety of issues, the political scientists Martin Gilens, of Princeton, and Benjamin Page, of Northwestern, found that the preferences of rich people had a much bigger impact on subsequent policy decisions than the views of middle-income and poor Americans. …
… In their conclusion… When a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose. Moreover … even when fairly large majorities of Americans favor policy change, they generally do not get it.”
… Gilens and Page do not use the term “oligarchy”… which would imply that a small ruling class dominates the political system to the exclusion of all others. They prefer the phrase “economic élite domination,” which is a bit less pejorative.
… “Rather often, average citizens and affluent citizens (our proxy for economic elites) want the same things from government.” …
…three causal variables: the views of Americans in the ninetieth percentile of the income distribution (the rich), the views of Americans in the fiftieth percentile (the middle class), and the opinions of various interest groups, such as business lobbies and trade unions.
…when the economic élites support a given policy change, it has about a one-in-two chance of being enacted. … When the élites oppose a given measure, its chances of becoming law are less than one in five. …
… on many issues, the rich exercise an effective veto. If they are against something, it is unlikely to happen. This is obviously inconsistent with the median-voter theorem—which holds that policy outcomes reflect the preferences of voters who represent the ideological center…
… “The probability of policy change is nearly the same (around 0.3) whether a tiny minority or a large majority of average citizens favor a proposed policy change.” …

The costs of inequality: Increasingly, it’s the rich and the rest (w charts; 2/8/2016) | @cpazzanese @HarvardMagazine
… Personified by outsider candidates Bernie Sanders and Donald Trump, economic inequality has resonated with broad swaths of nervous voters on both the left and right. …
Lawrence Katz @HarvardEcon, says the most damaging aspects of the gap between the top 1 percent of Americans and everyone else involve the increasing economic and political power that the very rich wield over society, along with a growing educational divide, and escalating social segregation in which the elites live in literal and figurative gated communities.
… “…rising inequality with stagnant mobility, which means that the consequences of where you start out, whether it’s in a poor neighborhood, whether it’s from a single-parent household, are more consequential today than in the past. Your ZIP code and the exact characteristics of your parents seem to matter more,”…
“It’s long been known that the better educated, those with higher incomes, participate more” in politics on “everything from voting to contacting politicians to donating,” said Theda Skocpol @HarvardSoc. “What is quite new in recent times is … very systematically, that government really responds much more to the privileged than to even middle-income people who vote.”
… Backers with both influence and access often help to shape the political agenda. The result is a kind of velvet rope that can keep those without economic clout on the sidelines, out of the conversation.
… But many politicians probably don’t realize it at all because … politicians spend a lot of their time asking people to give money to them [who] don’t think it’s a good idea to change that,”…
… @lessig @Harvard_Law. In Congress, he said, “They focus too much on the tiny slice, 1 percent, who are funding elections. In the current election cycle [as of October], 158 families have given half the money to candidates. That’s a banana republic democracy…
Christopher “Sandy” Jencks @Kennedy_School… three key factors: … The share of income gains flowing to the top 1 percent of earners doubling as a result of deregulation, globalization, and speculation in the financial services industry. …
“We have some of the lowest rates of upward mobility of any developed country in the world,” said Nathaniel Hendren @HarvardEcon…
… Median household income when last reported in 2013 was at a level first attained in 1989, adjusting for inflation. That’s a long time to go without any gains,” said Jan Rivkin @HarvardHBS…
…Claudia Goldin @HarvardEcon… “If you reduce gender inequality to zero, you’ve closed inequality … by a very small percent,”…
Rivkin says that the pressures of globalization and technological change and the weakening of labor unions have had a major impact. But he disagrees that political favoritism toward business interests and away from ordinary citizens is the primary reason for burgeoning inequality. Rather, he says that sustained underinvestment by government and business in “the commons” — the institutions and services that offer wide community benefits, like schools and roads — has been especially detrimental. …
Partisan gridlock in Washington, D.C., has diminished the effectiveness of government — perhaps the most essential and powerful tool for addressing inequality and citizens’ needs.
… “The optimism… Medicare and the Earned Income Tax Credit… I think that if national policy more approximated the upper third of state and local policies, the U.S. would have a lot of hope,”…
“Strong regulation and strong support for collective control over…
…@bsachs @Harvard_Law… Unions used to wield both economic and political clout, but legislative and court decisions reduced their effectiveness as economic actors, cutting their political influence as well. …
…“unbundling” unions’ political and economic activities, allowing them to serve as political organizing vehicles for low- and middle-income Americans, even those whom a union may not represent for collective bargaining purposes.
…Sachs wrote in a 2013 Yale Law Review article…
Still, given the historic labor and wage trend lines, Goldin said the economic forces that perpetuate unequal wages — and inequality more broadly — won’t simply disappear even with a spate of new laws.
… Drawing on an idea from @desaimihira @HarvardHBS, Rivkin suggests… That money could then go back into investment in “the commons,” where “lots of common ground” exists among business, labor, policymakers, educators, and others. …


US Policy Changes Vol.34 (Deregulation Vol.5 – finance)

Here is an article: A Short History of Financial Deregulation in the United States (PDF; Jul 2009) | Matthew Sherman @ceprdc. Excerpt is on our own.

p1 Timeline of Key Events

p3-4 Background
… The experience of the Great Depression changed attitudes regarding the regulation of financial markets. Much of the current system is the result of changes put in place during the 1930s. In 1933, Congress fundamentally reformed banking with the Glass-Steagall Act. One provision of the act, named Regulation Q, placed limits on the interest rates banks could offer on deposits. The federal control removed the possibility of competitive rate wars and kept rates from soaring to exorbitant levels. Regulation Q also made a small exception for institutions specializing in mortgage lending, especially the savings and loan associations. Deposits at these firms received a quarter-percent advantage over other consumer deposits. This was explicitly designed to encourage a flow of money into housing. …

p5 Usury Laws
… In one instance, the state of South Dakota considered completely eliminating usury ceiling legislation in the state in order to attract the credit card operations of Citibank. The arrangement promised to create new jobs in the languishing economy of South Dakota while removing interest rate restrictions for the national commercial bank. …the process moved so quickly that the legislation was introduced and passed in one day. Overnight, South Dakota had become a regulatory haven for the credit card industry. …

p6 Removing Interest Rate Ceilings
After the Great Depression, banks were restricted in the rate of interest they could charge on all types of deposit accounts. Under Regulation Q of the Banking Act of 1933, savings accounts were capped at 5.25 percent, and time deposits were limited to between 5.75 and 7.75 percent, depending on maturity. Checking accounts were restricted to an interest rate of zero. The regulation was intended to prevent rate wars at exorbitant levels, but it made a special distinction for institutions specializing in mortgage lending. In order to encourage mortgage lending within local communities, thrift institutions were allowed to offer deposit accounts interest rates a quarter-percent higher than banks.
In the late 1970s, inflation caused market interest rates to rise above the limits mandated by Regulation Q. The restrictions may have been prudent when inflation was around 3 or 4 percent, but with inflation as high as 10 or 11 percent, investors began to seek out and find alternatives to traditional deposit accounts. In the commercial paper market, investors could lend directly to borrowers, bypassing banks as intermediaries. Brokerage firms and other financial institutions began to create money market mutual funds, which pooled small investors’ funds to purchase commercial paper. These money market funds operated without reserve requirements or restrictions on rates of return. They quickly became popular among small investors who shifted their money out of the regulated accounts in depositary institutions, which paid considerably lower interest rates. …
p7-8
In a deregulated industry with poor supervision, the competition for deposits could spiral out of control. Some institutions attracted capital by offering large brokered deposits at above-market rates of return. Between the years of 1982 and 1985, deposits flowed in and the savings and loan industry underwent a rapid expansion. Investors saw potential for profit in the new investment powers granted to thrifts, and invested in condominiums and other commercial real estate. This meant that the investment portfolios of savings and loan associations shifted away from traditional home mortgage loans into higher-risk loans. From 1981 to 1986, the percent of savings and loan assets in home mortgage loans decreased from 78 percent to 56 percent. …

p8-9 Repealing Glass-Steagall
The Glass-Steagall Act of 1933 had established a firm separation between commerce and banking in the financial world. The bill prevented institutions that were “engaged principally” in banking activities from underwriting or dealing in securities of any kind, and vice versa. The Bank Holding Act of 1956 applied the same wall of separation to bank holding companies. After the experience of the Great Depression, the restrictions were intended to curb conflicts of interest and excessive risk-taking in the combination of banking and securities dealing. The structure of regulation and deposit insurance created under Glass-Steagall was very effective at minimizing bank failures throughout the mid-twentieth century.
Banks began lobbying Congress as early as the 1960s to loosen the restrictions of Glass-Steagall. With money market mutual funds and other complex financial instruments that blurred the lines between deposits and securities, the banking industry complained the Glass-Steagall restrictions were becoming obsolete. Banks wanted to enter the municipal bond market, among other securities markets, to remain competitive. Regulators in government were sympathetic to the industry’s concerns on some accounts. There was always a fear that financial deregulation in foreign countries would entice firms to take their capital abroad, and many in government shared the free market
ideology of deregulation. …
p10 
… The crumbling walls of Glass-Steagall received a final blow in 1999 when Congress passed the Financial Modernization Act, also known as the Gramm-Leach-Bliley Act. The act repealed all restrictions against the combination of banking, securities and insurance operations for financial institutions. The deregulation was a boon for national commercial banks, allowing for the formation of “mega-banks.” The Gramm-Leach-Bliley Act was the crowning achievement of decades and millions of dollars worth of lobbying efforts on behalf of the finance industry. The repeal of Glass-Steagall was a monumental piece of deregulation, but in many ways it ratified the status quo of the time.

p11 Hands-Off Regulation
… Ultimately, the fate of derivatives regulation was decided in Congress. Senator Phil Gramm, co-sponsor of the Gramm-Leach-Bliley Act, was one of several Congressman to push legislation that would deregulate the market. Gramm, in particular, wanted strict language to limit the direct oversight of the CFTC and SEC. A group of regulators, including the Chairs of the CFTC and SEC as well as Treasury Secretary Summers, reached a compromise with Gramm, and Congress moved quickly on the bill. The day after the Supreme Court effectively decided the fate of the 2000 Presidential election, the Commodity Futures Modernization Act of 2000 passed in Congress, attached as a rider to an 11,000-page spending bill. The legislation, passed without debate or review, exempted derivatives from regulation and made a special exemption for energy derivative trading that would gain notoriety as the “Enron loophole.” …

p12 Inflating the Bubble
… The mortgage market began to evolve as early as the 1980s. The Alternative Mortgage Transactions Parity Act of 1982 lifted restrictions against classes of mortgage loans with exotic features, such as adjustable-rate and interest-only mortgages. These loans carried low “teaser” rates during the first few years, after which interest rates reset at much higher levels. Consumers often did not understand the complex financial arrangements they entered into. Mortgage lenders also targeted lower-income, higher-risk borrowers with lower credit ratings through the use of alt-A and subprime loans. As these markets became more and more profitable, the mortgage industry aggressively pushed these non-conforming loans onto consumers. The Wall Street Journal reported the surprising fact that in 2006, 61 percent of subprime borrowers had credit scores high enough to qualify them for conventional mortgages. …
p13 
… There was enormous opportunity for profit with house prices at bubble-inflated prices, and the mortgage industry found creative ways to expand lending. Complex financial instruments were labeled as safe, while their underlying mortgage assets could be shoddy. All the while, government regulators took a hands-off approach to the activities of private actors. The system was highly vulnerable, and the inevitable collapse would have ramifications for the broader economy.

p13-14 Crisis
… Since the spring of 2008, financial markets have experienced turmoil not seen since the Great Depression. The prominent investment bank Bear Stearns was liquidated and sold to JP Morgan Chase at a fire-sale price. Lehman Brothers, another prominent major investment bank, declared bankruptcy. The other large investment banks either merged with investment banks or changed their status to become bank holding companies. Some of the largest financial firms, including Bank of America and Citigroup and AIG, received huge sums of capital assistance from the federal government. The system of non-bank institutions, sometimes referred to as the “shadow banking system,” experienced a massive withdrawal of funds in a sort of modern day bank run.
Regulators have responded to the current crisis with various emergency measures. The Federal Deposit Insurance Corporation (FDIC) oversaw the takeover of the failed bank IndyMac, the largest failure of an insured bank in history. The FDIC completed the sale of IndyMac in March of 2009. The FDIC also authorized the Temporary Liquidity Guarantee Program, providing a federal guarantee to newly issued unsecured debt as well as non-interest bearing transaction accounts. Congress also passed legislation that raised the level of deposit insurance at FDIC to $250,000.
The distress in the housing market also prompted changes in regulation for the government-sponsored entities of Fannie Mae and Freddie Mac. The Housing and Economic Recovery Act of 2008 guaranteed up to $300 billion in loans to subprime borrowers on the condition that lenders write down the loan principal to 90 percent of the current value of the home. The legislation also created the Federal Housing Finance Agency (FHFA) to oversee the government-sponsored enterprises. In September of 2008, with assistance from the Treasury, Fannie Mae and Freddie Mac were placed under the conservatorship of the FHFA. …


World Vol.3 (Indexes & Statistics)

cf. U.S.