Category Archives: CONGRESS WATCH

How a World Order Ends

And What Comes in Its Wake
By Richard Haass -A stable world order is a rare thing. When one does arise, it tends to come after a great convulsion that creates both the conditions and the desire for something new. It requires a stable distribution of power and broad acceptance of the rules that govern the conduct of international relations. It also needs skillful statecraft, since an order is made, not born. And no matter how ripe the starting conditions or strong the initial desire, maintaining it demands creative diplomacy, functioning institutions, and effective action to adjust it when circumstances change and buttress it when challenges come.

Eventually, inevitably, even the best-managed order comes to an end. The balance of power underpinning it becomes imbalanced. The institutions supporting it fail to adapt to new conditions. Some countries fall, and others rise, the result of changing capacities, faltering wills, and growing ambitions. Those responsible for upholding the order make mistakes both in what they choose to do and in what they choose not to do.

But if the end of every order is inevitable, the timing and the manner of its ending are not. Nor is what comes in its wake. Orders tend to expire in a prolonged deterioration rather than a sudden collapse. And just as maintaining the order depends on effective statecraft and effective action, good policy and proactive diplomacy can help determine how that deterioration unfolds and what it brings. Yet for that to happen, something else must come first: recognition that the old order is never coming back and that efforts to resurrect it will be in vain.

As with any ending, acceptance must come before one can move on.

Although the Cold War itself ended long ago, the order it created came apart in a more piecemeal fashion—in part because Western efforts to integrate Russia into the liberal world order achieved little. One sign of the Cold War order’s deterioration was Saddam Hussein’s 1990 invasion of Kuwait, something Moscow likely would have prevented in previous years on the grounds that it was too risky. Although nuclear deterrence still holds, some of the arms control agreements buttressing it have been broken, and others are fraying.

The liberal order is exhibiting its own signs of deterioration. Authoritarianism is on the rise not just in the obvious places, such as China and Russia, but also in the Philippines, Turkey, and eastern Europe. Global trade has grown, but recent rounds of trade talks have ended without agreement, and the World Trade Organization (WTO) has proved unable to deal with today’s most pressing challenges, including nontariff barriers and the theft of intellectual property.

Resentment over the United States’ exploitation of the dollar to impose sanctions is growing, as is concern over the country’s accumulation of debt. more>

Why Is the US Losing the AI Race?

By Chris Wiltz – AI is rapidly becoming a globally valued commodity. And nations that lead in AI will likely be the ones that guide the global economy in the near future.

“As AI technology continues to advance, its progress has the potential to dramatically reshape the nation’s economic growth and welfare. It is critical the federal government build upon, and increase, its capacity to understand, develop, and manage the risks associated with this technology’s increased use,” the report stated.

While the US has traditionally led the world in developing and applying AI technologies, the new report finds it’s no longer a given that the nation will be number 1 when it comes to AI. Witnesses interviewed by the House Subcommittee said that federal funding levels for AI research are not keeping pace with the rest of the industrialized world, with one witness stating: “[W]hile other governments are aggressively raising their research funding, US government research has been relatively flat.”

Perhaps not surprisingly, China is the biggest competitor to the US in the AI space. “Notably, China’s commitment to funding R&D has been growing sharply, up 200 percent from 2000 to 2015,” the report said.

AI’s potential threat to national security was cited as a key reason to ramp up R&D efforts. While there has yet to be a major hack or data breach involving AI, many security experts believe it is only a matter of time.

Cybersecurity companies are already leveraging AI to assist in tasks such as monitoring network traffic for suspicious activity and even for simulating cyberattacks on systems. It would be foolish to assume that malicious parties aren’t looking to take advantage of AI for their own gain as well. more>

Updates from Chicago Booth

No, America is not more divided than ever before
By Howard R. Gold – It may seem sometimes like the United States is coming apart. “While rural America watches Duck Dynasty and goes fishing and hunting, urban America watches Modern Family and does yoga in the park,” write Chicago Booth’s Marianne Bertrand and Emir Kamenica.

“The economically better-off travel the world and seek out ethnic restaurants in their neighborhoods, while the less well-off don’t own a passport and eat at McDonald’s.” Conservatives, they write, favor masculine names for boys while liberals prefer more-feminine names, and men play video games while women browse Pinterest.

These kinds of cultural splits can have economic, social, and political consequences in that they may ultimately reduce social cohesion within a country. But according to Bertrand and Kamenica, who measured cultural divisions over time, the cultural gap in the US is largely stable—not widening.

The data reveal that divisions definitely exist. Watching certain movies or television shows, reading certain magazines, or buying particular consumer products are predictable markers of traits such as how much money people make or how far they got in school. more>

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Why Society’s Biggest Freeloaders Are at the Top

By Rutger Bregman – These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job creators, and by the people who have “made it.” By the go-getters oozing talent and entrepreneurialism that are helping to advance the whole world.

Now, we may disagree about the extent to which success deserves to be rewarded – the philosophy of the left is that the strongest shoulders should bear the heaviest burden, while the right fears high taxes will blunt enterprise – but across the spectrum virtually all agree that wealth is created primarily at the top.

So entrenched is this assumption that it’s even embedded in our language. When economists talk about “productivity”, what they really mean is the size of your paycheck. And when we use terms like “welfare state”, “redistribution” and “solidarity”, we’re implicitly subscribing to the view that there are two strata: the makers and the takers, the producers and the couch potatoes, the hardworking citizens – and everybody else.

In reality, it is precisely the other way around. In reality, it is the waste collectors, the nurses, and the cleaners whose shoulders are supporting the apex of the pyramid. They are the true mechanism of social solidarity. more>

The World Order Is Starting to Crack

By Stewart Patrick – When Donald Trump was first elected U.S. president, foreign observers hoped that he would moderate his more outrageous campaign positions as the practicalities of governing socialized him to adopt more conventional stances. Failing that, they hoped to contain the damage until the U.S. electorate returned to its senses. Trump’s scythe has sliced through these thin reeds.

For a onetime chaos candidate, Trump has been remarkably methodical in his efforts to destroy the liberal international order.

Stunned U.S. allies are now adapting to their new normal by taking steps previously unimaginable. They are hedging their bets in dawning recognition that the America of old may never return, regardless of who succeeds Trump. They are pursuing strategic autonomy, seeking to decouple from an unpredictable United States. And they are considering how to restore some semblance of international cooperation in a world left rudderless in the wake of the U.S. abdication of global leadership.

Collectively, Trump’s actions have sent U.S. allies reeling, shaking their long-standing faith in the West as a community of shared values, interests, and institutions. In response, they are working with China to safeguard globalization, expanding their own strategic autonomy vis-à-vis Washington, and grasping to defend what remains of the open world from the depredations of its erstwhile creator.

Trump’s trade protectionism has done the seemingly unimaginable. It has allowed mercantilist China—which flagrantly steals intellectual property, restricts foreign investment, and protects entire sectors from foreign competition—to portray itself as a bastion of multilateral trade. more>

Politics, Pessimism and Populism

By Sheri Berman – Social democracy was the most idealistic, optimistic ideology of the modern era.

In contrast to liberals who believed “rule by the masses” would lead to the end of private property, tyranny of the majority and other horrors and thus favored limiting the reach of democratic politics, and communists who argued a better world could only emerge with the destruction of capitalism and “bourgeois” democracy, social democrats insisted on democracy’s immense transformative and progressive power: it could maximize capitalism’s upsides, minimize its downsides and create more prosperous and just societies.

Such appeals emerged clearly during the inter-war years, when democracy was threatened by populism’s more dangerous predecessor—fascism.

In the United States, for example, FDR recognized that he needed to deal not merely with the concrete economic fallout of the Great Depression, but also with the fear that democracy was headed for the “dust heap of history” and fascist and communist dictatorships were the wave of the future. This required practical solutions to contemporary problems as well as an ability to convince citizens that democracy remained the best system for creating a better future. As Roosevelt proclaimed in his first inaugural address:

‘Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for…. [Our problems are not insolvable, they exist] because rulers have failed…through their own stubbornness and… incompetence….This Nation asks for action, and action now….I assume unhesitatingly the leadership of this great army of our people dedicated to a disciplined attack upon our common problems….The only thing we have to fear is fear itself’. more>

The Wounds Won’t Heal

By David French – We usually place outsized emphasis on elections that define our politics and too little emphasis on the values that define our culture.

But it was the nomination of Kavanaugh and the wrenching debate about core cultural and constitutional values that dominated American discourse these past few weeks. It’s a debate that illustrated the fundamentally different ways in which conservatives and progressives view the world, and it unlocked not just an intellectual response but an emotional response that has radicalized otherwise reasonable and temperamentally moderate individuals into believing that the other side hates even the good people in their own tribe.

And so when Ford came forward, it’s as if her allegations landed in two different countries. The good-faith residents of Redworld were skeptical and said, “Prove it.” The good-faith residents of Blueworld believed Ford and said, “Finally, she has a chance for justice.” The presumptions were diametrically opposite, and everything that followed turned on those different presumptions. more>

They Go Together: Freedom, Prosperity, and Big Government

Countries with larger government sectors tend to have more personal freedom
By Ed Dolan – The Human Freedom Index consists of two parts. One is the Economic Freedom Index (EFI) from the Fraser Institute, which includes measures of the size of government, protection of property rights, sound money, freedom of international trade, and regulation.

The other is Cato’s own Personal Freedom Index (PFI), which includes measures of rule of law, freedom of movement and assembly, personal safety and security, freedom of information, and freedom of personal relationships. The Cato and Fraser links provide detailed descriptions of the two indexes.

In order to explore the way freedom influences other aspects of human well-being, I will draw on a third data set, the Legatum Prosperity Index (LPI) from the Legatum Institute. The LPI includes data on nine “pillars” of prosperity, including the economy, business environment, governance, personal freedom, health, safety and security, education, social capital, and environmental quality.

The relationship between economic and personal freedom is partly explained by the fact that both are positively associated with income. As the next chart shows, that relationship is nonlinear for both measures of freedom. The log of real GDP per capita, expressed in U.S. dollars at purchasing power parity, provides a reasonably good fit.

There are many measures of prosperity and well-being available. I hope to be able to explore several of them and their relationships to human freedom in future posts. In this introductory treatment, however, I will limit myself to the education, health, and personal security indicators from the Legatum Prosperity Index. In what follows, I will refer to the average of these three Legatum “pillars” as the education-health-safety index, or EHS, measured on a scale of 1 to 100. more>

How The Handling Of The Financial After-Crisis Fuels Populism

By Guillaume Duval – Ten years after the collapse of Lehman Brothers people are frequently asking themselves why the crisis has done so much to strengthen populism and nationalism everywhere you go. However, economically and socially, the process that lies behind this development is, unfortunately, all too easy to describe.

During the aftermath of the 2008 crisis, central banks’ rescue of finance continued on an unprecedented scale for ten years with what is called Quantitative easing (QE). The striking effect of this was to send prices of financial assets sky-high and thereby substantially enrich the bankers, speculators and the already rich holders of these assets at levels that are much higher than before the crisis.

At the same time, ordinary people found themselves lastingly out of work on a huge scale. Governments whose own finances deteriorated steeply – not least because of their aid to the financial sector – rushed to cut back on their spending, especially on welfare. Everywhere, classic right-wing governments but also social-liberal left ones as in France adopted deflationary policies to cut the cost of labor and loosen up the labor market rules, thus making ordinary people’s working and living conditions far worse. While cutting again the taxes on the super-rich and corporate earnings to preserve the country’s “attractiveness.”

These public policies – that have put all European countries permanently on the edge of recession and deflation – are also the main reason for the pursuit of the above-mentioned monetary policy that has so significantly increased inequalities. more>

How The Republican Leadership Broke The Four Rules Of Crisis Management

By Steve Denning – In its actions over the last ten days, the Republican leadership has jeopardized its goals through its failure to respect the rules of crisis management:

  • Recognize the crisis as a crisis
  • Get out as much information as possible as soon as possible, particularly any negative information
  • Avoid saying anything that has to be withdrawn
  • Avoid doing anything that looks like a cover-up

The first failure of the Republican leadership was the failure to recognize the crisis as a crisis. The Republicans’ first instinct was to to brush aside the accusation as partisan politics and press ahead with a quick vote on Kavanaugh’s nomination. A single accusation from one woman 36 years ago was presented as “a little hiccup.” (Senator Dean Heller)

However, once the identity and professional background of the accuser became known, first to the FBI on September 13, and then to the public on September 16, it became apparent that she deserved to be heard, as Senators Flake and Collins insisted. In effect, if the Republican leadership had pressed ahead, it would have been at risk of not having enough Republican votes for success.

What the Republican leadership hadn’t initially grasped was that this was a real crisis for Kavanaugh’s nomination. It would have been one thing if the accusation was being made by a partisan politician. It was another when it was made by a well-respected professor, with no active record in partisan politics and no particular axe to grind. Coming in the midst of the #MeToo movement, the accusation was bound to be a sensation. more>

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