Tag Archives: Congress Watch

Updates from Chicago Booth

Google and Facebook have an effective duopoly on online advertising. For the average person, why is that a problem? Prices haven’t gone up. Why should we care?
By Luigi Zingales, Tyler Cowen – Most people don’t perceive that as a problem. The perceived price [for using Google or Facebook] is zero. It’s not really zero, because we are giving up our data in exchange. Google and Facebook’s market power in advertising increases the cost of advertising, which eventually will be reflected in the price of goods.

Antitrust in Europe is much more effective. Look at the price of cell phones and cell-phone services. They are a fraction of the price in the US, with better services. The EU is at the front end of enforcement of competition, while the US has become complacent. In the EU, they have a new directive requiring every bank to give customers access to their data at the customer’s request. That transfer creates competition because it reduces the friction and creates more opportunity for new entry. The monopoly that Facebook and Google have of our data, number one, prevents entry, and number two, gives them tremendous power. more>

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Is democracy essential?

BOOK REVIEW

Superpower: Three Choices for America’s Role in the World, Author: Ian Bremmer.

By Ian Bremmer – In advanced economies, young adults are more likely than older people to prefer technocracy to democracy. The study found that in the U.S., 46 percent of those aged 18 to 29 would prefer to be governed by experts compared with 36 percent of respondents aged 50 and older.

Perhaps most alarming was the revelation than one quarter of millennials agreed that “choosing leaders through free elections is unimportant.” Just 14 percent of Baby Boomers and 10 percent of older Americans agreed.

In a world where even the Communists are no longer communists (China’s state-capitalism is a far cry from Marx, to be sure), there’s no competing ideology forcing those who live in democracies to consider what life might be like without it.

Or maybe it’s that democracy in America no longer seems to be working. During the 1930s, economic depression led many to look abroad for alternatives to democracy and free-market capitalism.

American millennials have never stood in a bread line, but they have experienced the most severe financial crisis since the 30s, a dramatic widening of the gap between richest and poorest, a hollowing out of the middle and working classes, and a level of dysfunction and petty partisan hostility in Washington that seems to get worse by the week.

Then there’s the Trump effect. more>

The high cost of budgetary paralysis

By Alice M. Rivlin – It is both frightening and embarrassing that the world’s most experienced democracy is currently unable to carry out even the basic responsibility of funding the services that Americans are expecting from their government in the current fiscal year.

Limping from one short-term continuing resolution to another, combining individual appropriations bills into unwieldy omnibus bills that no one is able to study or even read, and threatening to close the government (or default on the debt) if certain conditions are not met are all symptoms of a deeply broken decision-making process.

The costs of budgetary dysfunction are high and rising, although not easy to quantify. Federal agencies, including the Department of Defense, cannot make plans that enable them to spend money efficiently.

The most worrisome cost of the Congress’s seemingly-endless wrangling over near-term federal funding is that it crowds out serious discussions of the daunting longer-term challenges that face the nation’s economy. more>

Screw Emotional Intelligence–Here’s The Key To The Future Of Work

By Natalie Fratto – The AEI is a standardized test, implemented 10 years ago, in 2035, to replace the SAT. It has become a globally accepted metric for aptitude and projected performance in the modern workplace.

Colloquially called “the Qs,” the AEI tests three variables:

  • Adaptability quotient (AQ)
  • Emotional quotient (EQ)
  • Intellectual quotient (IQ)

While each “Q” matters, the AEI weights AQ the most. Strong scores in adaptability mean that you’re eligible for the “salaried track,” which leads to a three-year contract with an employer that commits significant sums toward your retraining every one to six months.

With lower scores, you must rely on the “gig track,” which can mean more flexibility and higher near-term rewards, but only short-duration contracts and no supported retraining. There is no inherent safety net if you bet too long on the wrong gigs in dying industries instead of continually refocusing on emergent needs.

Welcome to the future. more>

Automating Influence: The Manipulation of Public Debate

By Andrew Trabulsi – While the application of influence campaigns for the purposes of altering public discourse and politics are rapidly gaining prominence, it’s a field, as discussed in previous writings, with a detailed past.

Tasked with winning the moral high ground during World War I, the famed British propaganda unit, Wellington House, distributed evocative, explicit reports of German barbarism to bolster public opinion in favor of the Allies. At a time before the interminable ubiquity of Internet communications, this tactic proved invaluable in securing the attention and support of the Allies’ war effort, improving recruiting and persuading neutrals.

Today, we see such tactics—albeit in different, non-traditional fashions—show up across case studies, for both political and commercial purposes. In a similar vein to the manipulation of public commentary on net neutrality, when the Consumer Financial Protection Bureau proposed adjusting its rules to stunt abuse within payday lending markets, it too was berated with an abnormal number of duplicate and semantically similar comments.

As political and economic issues become increasingly influenced by technological engagement, it’s becoming more and more important to understand the limitations and vulnerabilities of such systems. more>

Trump is showing us that dictatorships and democracies can feel remarkably similar

By Noah Berlatsky – What would American authoritarianism look like? How will we recognize the collapse of democracy, and what would life be like under the new regime? And—perhaps most chillingly—would authoritarianism be equally oppressive for everyone? Or might we fail to notice when creeping fascism comes because it come creeping for someone else?

These questions have taken on renewed urgency this week as we move into the second year of Donald Trump’s presidency.

“It’s a mistake to think a dictatorship feels intrinsically different on a day-to-day basis than a democracy does,” writer G. Willow Wilson noted in a thread on Twitter. Authoritarianism doesn’t necessarily slam down all at once. It often is a slow erosion of norms—a law enforcement agency corrupted here, the self-censorship of media there. It can sneak up on you. And that’s especially true because authoritarianism is not egalitarian. It doesn’t affect everyone in the same way.

American democracy has always existed alongside American totalitarianism; liberty for some sits comfortably beside authoritarian violence for others. more>

The Great Deflation

President Trump vowed to “Make America Great Again,” but experts say the United States’ reputation is falling.
By Susan Milligan – Make America Great Again. America First. President Donald Trump’s professed view of, and vision for, America is unabashedly self-focused, putting the interests of the United States ahead of longtime international leadership roles in trade and democracy-building.

If there’s a schoolyard theme to the approach of a president derided by his critics as a bully, it’s that the United States isn’t going to be pushed around anymore.

But as Trump prepares to speak before world thought leaders in Davos, Switzerland, then deliver his first State of the Union speech next week, foreign policy experts and veterans of previous administrations worry about the impact abroad and at home. The nation’s image has taken a hit among foreign nations who historically have looked to the U.S. for help and leadership, while domestically, Americans are increasingly unhappy with the government many grew up thinking was the model for the world.

“America’s standing in the world has dropped catastrophically,” says Simon Rosenberg, founder of the New Democrat Network, a think tank. “It could be that the golden age [of America] and the conditions that created it are coming to an end. What’s remarkable is that all of this is happening without any debate in Congress about any of this.” more>

Growth Is Back! So What?

By Éloi Laurent – After ten years of real downturns, false starts and speculations on “secular stagnation,” a genuine global recovery has finally materialized.

But does it matter? It all depends on what you know about what Gross Domestic product (GDP) measures… and leaves aside.

GDP actually captures only a tiny fraction of what goes on and matters in our complex societies: it tracks some but not all of economic well-being (saying nothing about fundamental issues such as income inequality); it does not account for most dimensions of well-being (think about the importance of health, education or happiness for your own quality of life); and it says exactly nothing about “sustainability,” which basically means well-being not just today but also tomorrow (imagine your quality of life on a planet where the temperature would be four degrees higher or where there would be scant drinkable water or breathable air).

Consider the US, which is supposed to be growing faster than Europe: stock markets, profits and growth are up, sometimes at historic highs. But stock markets, profits and growth are the holy trilogy of mis-measuring the economy.

Consider another US trilogy: inequality, health and trust and the picture changes radically. Recent data show that income inequality is higher today than it was during the Gilded Age, relentlessly fracturing the American society; that Americans in large numbers have been “dying of despair.” more>

The Right Kind of Stimulus

By Marc Scribner – Most politicians view infrastructure spending as a means to provide economic stimulus and bring home the bacon. As a result, public infrastructure investments are often poorly prioritized and needlessly costly. How to pay for it, where the money would be best spent, and even what “infrastructure” means are questions often left unresolved.

Infrastructure investment is essential to economic prosperity. To invest smartly, public officials must recognize important differences between asset classes, project types and questions of who is paying and how. That requires abandoning the urge to use infrastructure spending to boost growth and more deliberate decision making.

To jumpstart its stalled economy in the early 1990s, the Japanese government spent more than $6 trillion on public construction projects over two decades. That failed to increase economic growth, but it did send Japan’s gross debt soaring up to 245 percent of GDP by 2015, with debt-service payments accounting for a quarter of total government expenditures.

What can be done to improve infrastructure policy?

First, lawmakers should prioritize the highest-value infrastructure investments that are needed in their communities and eschew the next shiny object.

Second, federal lawmakers should incentivize local governments to invest in maintaining their surface streets, mass transit systems and water and wastewater networks.

Third, government leaders should remove barriers to credit for infrastructure projects, like the unfair tax advantage given to public infrastructure investment.

Finally, governments at all levels should learn from private infrastructure providers. more>

Donald Trump and the Rule of Law

By Jeffrey Toobin – Richard Nixon earned eternal disgrace for keeping a list of his political enemies, but he, at least, was ashamed enough of the practice to know that he had to keep it secret. Trump, in contrast, is openly calling for the Department of Justice, which he controls, to put his political opponents in jail.

This kind of behavior is a trademark of the authoritarians he admires, like Vladimir Putin and Recep Tayyip Erdoğan.

Trump’s contempt for the rule of law infects his entire Administration, as illustrated by Jeff Sessions’s newly announced guidance on marijuana policy.

Under the new policy, in much of the country federal marijuana enforcement will be run by officials who are only accountable to Sessions and Trump, not to the broader public.

Senators have a right to ask prospective U.S. Attorneys how they plan to enforce federal law on marijuana, and, of course, the legislators have the right to vote these officials down if they don’t like their answers. But Sessions has installed acting U.S. Attorneys in much of the country—including in such high-profile locations as Manhattan and Los Angeles—and senators can’t exert any oversight of them.

This gesture of contempt for the Senate’s role in confirmations is reflected well beyond the Justice Department. Throughout the government, Trump has nominated many fewer officials to Senate-confirmed positions than his predecessors; instead, Cabinet secretaries have filled these crucial positions with acting or temporary officials who avoid scrutiny from senators. more>