Democrats Retreat on Nuclear Policy | Defense One

Question: How do you go from a National Defense Authorization Act that in July was opposed by every House Republican to one that was approved by more GOP votes than Democratic ones and that President Donald Trump called a huge win that he cannot wait to sign?

Answer: Add Space Force and parental family leave and take out all of the progressive national security provisions.

Source: Democrats Retreat on Nuclear Policy – Defense One

USMCA Trade Deal Wins Over Democrats But Faces 2020 Uncertainty | US News

Getting House Speaker Nancy Pelosi and her colleagues in the lower chamber of Congress to support a North American trade deal renegotiated by the White House was supposed to be the biggest obstacle standing in the way of the proposal reaching President Donald Trump’s desk.

But even after the California Democrat and senior Democrats abruptly announced their support for the bill this week – saying they had successfully negotiated revisions to the original text that would strengthen labor and environmental protections, among other things – the path to ratification appears anything but imminent.

Senate Majority Leader Mitch McConnell of Kentucky announced this week that he plans to hold off on U.S.-Mexico-Canada Agreement deliberations until after Trump’s expected impeachment trial in the Senate.

Source: USMCA Trade Deal Wins Over Democrats But Faces 2020 Uncertainty | The Civic Report | US News

Show me the money: How do we finance social protection for the future of work in Africa?

The one subject that keeps many policymakers across African countries awake at night is “jobs.” How do we create decent jobs for the continent’s growing and youthful population?

In the era dubbed the “Fourth Industrial Revolution,” in which the adoption and diffusion of technology is generating anxiety about the displacement of manufacturing and low- and middle-skilled service jobs, this question is even more complicated.

Source: Show me the money: How do we finance social protection for the future of work in Africa?

Talent is America’s most precious resource—it’s time economic development organizations focus more on developing it

In his recent book, The Gift of Global Talent, Harvard economist William R. Kerr argues that talent is the world’s most precious resource.

Across America’s network of regional economies, this is undoubtedly true. The collective knowledge and capabilities of the U.S. workforce is worth an estimated $240 trillion—four times more valuable than the country’s physical capital stock and ten times more valuable than all the urban land in the United States.

Source: Talent is America’s most precious resource—it’s time economic development organizations focus more on developing it

Broker group warns of investor risks posed by U.S. direct share-listing proposal | Reuters

The U.S. Securities and Exchange Commission risks weakening investor protections if it allows companies to raise money in the public market through a direct listing without the support of underwriting banks, an influential broker group said on Friday.

The New York Stock Exchange (NYSE) has filed an application with the SEC to allow companies going public to raise capital through a direct listing, instead of an initial public offering. Nasdaq has said it also intends to file changes to its rules that would allow companies to raise funds, so-called primary capital, through a direct listing.

Venture capital investors have been pushing for direct listings, saying they are a better way to price newly public shares, while the exchanges say the new mechanism would give companies more flexibility in how they go public after a 20-year decline in listed companies.

Source: Broker group warns of investor risks posed by U.S. direct share-listing proposal – Reuters

In an Indian village, a woman’s killing and alleged rape opens caste divides | Reuters

That morning of Dec. 5, the woman had set out early to catch a train that was due to depart around 5 am to meet her lawyer to pursue her rape case, according to her statement in a police report. After she was burnt, the government ordered her moved to a hospital in New Delhi, where she succumbed to her injuries late on Dec. 6.

While her death has sparked nationwide outrage, her village stands divided over it, largely over caste lines.

Source: In an Indian village, a woman’s killing and alleged rape opens caste divides – Reuters

WeWork Acquires Spacious, Continues Consolidation Spree | Fortune

Look out, world—WeWork is showing no signs of slowing their plans for industry-wide domination.

“WeWork is still in growth mode—they need to hit those growth numbers post-IPO, and a couple acquisitions would help them do that,” says Matthew Kennedy, senior IPO market strategist at Renaissance Capital, a provider of institutional research and IPO ETFs.

“It’s clear that WeWork is trying to expand beyond its traditional office space model. Spacious attempts to utilize underutilized properties as office space, like restaurants, and [WeWork] has a demonstrated ability to create premium work stations, so it does seem like a logical fit.”

Source: WeWork Acquires Spacious, Continues Consolidation Spree | Fortune

Australia investing $715 million in northern port that hosts US Navy warships | Stripes

Upgrades worth $715 million to naval facilities in Australia’s Northern Territory will mean more support for visiting U.S. warships, according to an Australian defense expert.

The improvements are being made to an Australian naval base, HMAS Coonawarra, and the Larrakeyah Defence Precinct in Darwin, the Australian Department of Defence said in a Dec. 11 email.

Source: Australia investing $715 million in northern port that hosts US Navy warships – Stripes

The United States Needs a Competitive Approach to Countering China

The verdict is in on U.S. President Donald Trump’s trade war with China. Regardless of whether U.S. negotiators soon reach a deal with Beijing, the administration’s initial gambit has run aground.

After wreaking havoc on portions of the U.S. economy with his trade policies, the president is now angling to freeze or roll back tariffs on Chinese products in exchange for almost nothing.

Deal or no deal in the coming days, it is clear that the United States needs a fundamentally different approach to economic competition with China—one that bolsters U.S. technological and financial power while countering Beijing’s malign activities directly.

Tariff hikes haven’t forced Beijing to capitulate. Chinese negotiators are reportedly making only vague commitments to assuage U.S. concerns about currency manipulation and intellectual property theft.

Decoupling—particularly if unilateral and without requisite investments at home—is more likely to isolate the United States than China, engendering a world in which Beijing has control over leading technologies, data, and standards and sets global trade and investment rules in its favor. Fortunately, such an outcome is readily avoidable, but only if Washington focuses on outpacing China with a more competitive strategy.

Such a strategy should begin with ambitious U.S. investments in scientific, technological, and financial innovation, supercharging research and development (R&D) in critical areas where China has gained or is gaining a competitive edge. But it must go beyond that, sustaining ties with China where commercial exchange benefits the U.S. economy while at the same time developing more powerful safeguards to protect and advance vital U.S. technological advantages.

This should include, among other things, building a coalition of allies to design and create new rules and institutions for trade, technology, and investment that level the playing field and erode Beijing’s ability to profit from anticompetitive practices.

An effective strategy for competing with China should start with innovation at home. The United States should boost U.S. R&D spending, nurture and recruit talent, and provide public goods to support U.S. research. China is on track to surpass the United States in total R&D spending as early as 2019.

To sustain its technological advantage, the United States should increase federal R&D spending from 0.7 percent of GDP last year to 1.2 percent of GDP and strive to bring combined public and private spending to four percent of GDP by 2030.

But investing in innovation isn’t enough. China continues to prey on American openness and to exploit U.S. technology for malign purposes. The United States should therefore adopt more powerful measures to counter systematic intellectual property theft and forced technology transfer. The U.S. government has already stepped up screening of foreign investments and increased counterespionage investigations.

But the State Department, Federal Bureau of Investigation, and intelligence community should work together to develop enhanced visa-screening criteria to identify espionage risks. The FBI should also increase its collaboration with universities in order to combat academic espionage, while seeking wherever possible to preserve academic and research exchanges that enable “brain gain” for the United States.

To that end, the FBI should bring back the National Security Higher Education Advisory Board, which facilitated communication between universities and the national security community on counterintelligence threats, among other issues, until the FBI dissolved it in 2018.

The United States also needs stronger guardrails to prevent the transfer of U.S. technology to China for illicit or repressive purposes.

With these protections in place, U.S. companies could more securely engage with China on many dual-use emerging technologies. But stricter export controls are still necessary for certain critical technologies. To protect its competitive edge in artificial intelligence, Washington should coordinate with allies such as Japan and the Netherlands to prohibit the export to China of semiconductor manufacturing equipment and design tools.

At the same time, the United States should diversify and secure its own sources of key technology inputs, including those related to semiconductor manufacturing and rare earth minerals, to mitigate the risk of disruption to U.S. supply chains.

Similar competitive measures are needed in the world of finance, where China is increasingly challenging the United States as well. Alongside technological advantages, financial power is among the United States’ greatest sources of international influence.

It generates enormous U.S. wealth, provides the basis for sanctions authority, and allows the United States to set rules and norms on investment, state subsidies, market distortions, and trading practices. To sustain this power, the United States must ensure that its financial system remains a transparent, stable, and attractive market for the world to create and store wealth.

China does its best to exploit what opacity exists in the system and to further muddy the waters when doing so serves its interests. Congress should therefore legislate an end to anonymous corporations and shed light on shell games and illicit operations by requiring those who control companies to declare themselves.

Congress should also require foreign companies—including Chinese ones—that list securities on U.S. exchanges to comply with the same audit and disclosure requirements that apply to U.S. firms. This will help investors assess risk and support market stability.

At the same time, the United States should discourage the development of alternative, foreign payments or clearing mechanisms that seek to evade U.S. jurisdiction. China has launched its own payments facility and seeks opportunities to internationalize its currency—both fiat and virtual—to erode the dominance of the U.S. dollar.

The United States should work to beat out foreign cross-border payment mechanisms by promoting U.S.-based or U.S.-linked alternatives that improve efficiency, lower costs, offer privacy, and have full digital functionality.

The United States should also encourage European payment mechanisms for humanitarian trade with Iran or other sanctioned countries so long as they do not violate U.S. sanctions. This will diminish growing sanctions-busting sentiment abroad.

With China making aggressive investments in financial technology, the U.S. administration should support a regulatory posture that provides more active support, flexibility, and guidance to U.S. developers. Through such an approach, regulators can help U.S. firms better compete against foreign firms, including Chinese ones.

In particular, the United States should look to support financial technology development for domestic and cross-border insurance, lending, payments, settlement, clearing, and tokenized assets applications, all of which will help make the U.S. financial sector more competitive, efficient, and reliable.

Leading the field in these areas will also help U.S. firms beat out the competition to capture billions of new financial sector entrants across Asia, Africa, and Latin America.

Additionally, the United States should pursue new multilateral agreements with Asia-Pacific and European nations that set high standards for trade and investment. These agreements will grow the U.S. economy while also helping U.S. partners reduce their economic dependence on China. They will also expand the portion of the global economy committed to free and fair trade rules on labor, the environment, currency, and intellectual property.

China is a formidable challenger, but the United States can still compete favorably against it. Doing so will require a fundamental rethink of U.S. strategy.

Source: The United States Needs a Competitive Approach to Countering China

What Elizabeth Warren, Bernie Sanders, AOC, and Neosocialists Get Wrong About Capitalism

We are living, so we are told, in a neosocialist moment. From politicians such as the Briton Jeremy Corbyn and the Americans Alexandria Ocasio-Cortez and Bernie Sanders leading the charge, to celebrated academics inveighing against the sins of capitalism, to the hipster chic of the Jacobin crowd, a growing movement on the far left is trying to revive and rehabilitate a long-dormant ideological tradition.

The movement’s obsession is the pursuit of greater equality, expressed primarily through punitive leveling. Things that contribute to inequality, such as income or profit or wealth, are considered public harms that need to be controlled—by taxes, regulation, and other government policies. The consequences for other priorities, such as sustainable revenue, economic growth, technological innovation, and individual freedoms? Not part of the equation.

Capitalism has strengths and weaknesses, and critiques of it are familiar—they’ve circulated widely ever since market-based economic systems started gaining ground in the eighteenth century.

The neosocialist movement is something different, however. Its roots lie not in social democracy but in democratic socialism, which seeks less to reform capitalism than to end it. And if its policies were ever put into practice, they would lead to disaster.

The neosocialists are descended from Rousseau. They downplay poverty and fetishize equality, focus on wealth distribution rather than wealth creation, and seem to care as much about lowering those at the top as raising those at the bottom.

The movement’s signature policy proposal is a wealth tax, an annual levy on household assets. Touted by economists such as Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, all associated with the Paris School of Economics, the concept has been embraced by both Sanders and Elizabeth Warren, U.S. senators from Vermont and Massachusetts, respectively, who are running for the Democratic presidential nomination.

The radicalism of this approach is often underestimated. Many people conflate wealth taxes with higher income taxes or see them as mere extensions of a similar concept. But wealth taxes are fundamentally different instruments with much broader ramifications for economic dynamism and individual liberty.

The main effect of a wealth tax would be to discourage wealthy individuals from holding demonstrable assets. Any individual or household within shouting distance of the threshold would have to get its assets valued annually, imposing costs and creating a permanent jobs program for tax lawyers and accountants, whose chief responsibility would be to figure out ways around the law, including moving assets abroad.

The war against climate change, that is, will ultimately be fought and won in large part by an army of Schumpeterian entrepreneurs large and small, deploying their mage-like powers for humanity’s collective defense. Unless the neosocialists have their way, and turn off the engines of innovation just when they are needed the most.

Source: What Elizabeth Warren, Bernie Sanders, AOC, and Neosocialists Get Wrong About Capitalism