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  • Author: Chad Michael Briggs
  • Publication Date: 07-2018
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Paid parental leave can provide important health and educational benefits to children while enabling mothers to remain attached to their prior jobs, which can increase earnings substantially once the mother returns to work
  • Topic: Finance, Domestic politics
  • Political Geography: America
  • Author: Derek Scissors
  • Publication Date: 07-2018
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: China is investing much less in the US than it did just a year ago. It has never invested much in the Belt and Road. Yet China’s global investment spending remains healthy, with impressive diversification across countries and the reemergence of private firms.
  • Topic: International Political Economy, International Affairs
  • Political Geography: China
  • Author: Roger F. Noriega
  • Publication Date: 02-2014
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: El Salvador will choose a new president in a runoff election on March 9. The nation's decision may prove critical to Salvadoran democracy and regional security, in light of substantial evidence linking the ruling party candidate to narcotraffickers, terrorist groups, and violent street gangs. Moreover, foreign interference in the form of billions of dollars in Venezuelan oil revenues has given the ruling party an advantage, despite the fact that its economic policies have increased poverty and stunted economic growth.
  • Topic: Corruption, Crime, Democratization, Narcotics Trafficking
  • Political Geography: Latin America
  • Author: Dorothée Fouchaux
  • Publication Date: 02-2014
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The following National Security Outlook is the ninth in AEI's Hard Power series, a project of the Marilyn Ware Center for Security Studies. In it, Dorothée Fouchaux examines the state of French forces and France's most recent effort to prioritize its strategic goals and square them with its military capabilities.1 Certainly since Charles de Gaulle's presidency, France has maintained a tradition of thinking strategically for itself-often, admittedly, to the aggravation of its allies. This tradition remains strong and, if anything, has been reinforced in recent years by the sense that the United States is pivoting away from Europe and would like to reduce its footprint in Europe's troubled periphery. With its latest defense white paper, Paris has laid out a program to maintain its "strategic autonomy" through a combination of nuclear deterrence, enhanced intelligence efforts, and discrete power-projection capabilities. But France faces flat defense budgets, the increased cost of its military interventions in Africa, and prospects that budget shortfalls will not be overcome by the sale of public shares of national defense companies or export sales of military hardware. Consequently, some doubt that an even smaller French force will have sufficient resources to address existing problems in readiness and needed capabilities while sustaining a defense research-anddevelopment base sufficient to keep future French forces armed with advanced equipment. In short, France really is living on the strategic edge.
  • Topic: Foreign Policy, Defense Policy
  • Political Geography: Europe, France
  • Author: Michael Rubin
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Since Azerbaijan regained its independence in 1991, it has been only the world's second Shi'ite-led state after Iran. Azerbaijan respects separation of mosque and state, and despite pressure from its neighbors, remains independent from political domination. Given its strategic importance, safeguarding the country's independence remains a US priority. And the threat from Iranian meddling is particularly acute. From Tehran's perspective, the combination of Azerbaijan's pre-19th-century Iranian past, modern Azerbaijan's embrace of secularism, and its relative economic success challenge Iran's legitimacy. As Iranian authorities have sought to undermine and destabilize Azerbaijan through political, clerical, charitable, and media channels, Azerbaijan's counterstrategy has been both restrained and effective.
  • Topic: Foreign Policy, Islam, Sovereignty, Governance
  • Political Geography: United States, Iran, Middle East
  • Author: Leon Aron
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Every Olympiad is a complex and, until the end, uncertain endeavor. In the case of the 2014 Winter Games, which begin February 7 in Sochi, Russia, the challenges and vulnerabilities are far more significant and numerous than usual. It will be the first (and almost certainly the last) Winter Games in the subtropics. Virtually the entire infrastructure had to be built from scratch and in haste, with abuse of laborers and corruption overhead likely further compromising the construction. While various interest groups exploit every Olympiad to draw international attention to their causes, protests in Sochi could be particularly intense. Finally, and most ominously, Sochi is next door to a fundamentalist Islamic uprising in which terrorism claims victims almost daily. For the sake of the athletes and millions of fans, one hopes that none of these potential problems will precipitate a disruption, much less a crisis or bloodshed. Yet in their choice of location and the manner in which they have gone about organizing the Games, the Russian authorities have greatly increased that risk. By highlighting some key features and practices of Vladimir Putin's regime, a major setback at the Olympiad could deal a serious blow to the regime's legitimacy, prompt national soul searching, and trigger another round of civil resistance in search of reforms.
  • Topic: Corruption, Islam, Insurgency, Infrastructure, Governance
  • Political Geography: Russia
  • Author: Derek M. Scissors
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: New data published in the American Enterprise Institute-Heritage Foundation China Global Investment Tracker show that China continues to invest heavily around the world. Outward investment excluding bonds stood at $85 billion in 2013 and is likely to reach $100 billion annually by 2015. Energy, metals, and real estate are the prime targets. The United States in particular received a record of more than $14 billion in Chinese investment in 2013. Although China has shown a pattern of focusing on one region for a time then moving on to the next, the United States could prove to be a viable long-term investment location. The economic benefits of this investment flow are notable, but US policymakers (and those in other countries) should consider national security, the treatment of state-owned enterprises, and reciprocity when deciding to encourage or limit future Chinese investment.
  • Topic: Security, Foreign Policy, Development, Economics, Emerging Markets, International Trade and Finance, Foreign Direct Investment, Sovereign Wealth Funds
  • Political Geography: United States, China, Asia
  • Author: Andrew A. Michta
  • Publication Date: 12-2013
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The following National Security Outlook is the eighth in AEI's Hard Power series-a project of the Marilyn Ware Center for Security Studies that examines the state of the defense capabilities of America's allies and security partners. In it, Andrew Michta outlines the case of Poland, which he notes is determined both to expand its indigenous defense industrial capabilities and to increase overall defense spending. As numerous accounts of NATO defense trends over the past two decades elucidate, Poland's decision to increase defense spending is far more the exception than the rule when it comes to America's other major allies. This is largely driven, according to Michta, by Poland's desire to fend as much as it can for itself in light of what it sees as Russian revanchism and Washington's growing disengagement from Europe in defense matters. Not surprisingly, this has led to a shift in Warsaw's security agenda since Poland joined NATO in 1999. Despite Poland being one NATO ally that has responded positively to Washington's calls for increasing defense capacities, today Warsaw increasingly feels compelled to look to its own resources and to neighboring capitals as potential security partners. Whether this drift in transatlantic ties is permanent or inevitable remains an open question, and will to a large extent depend on how US security relations with Europe develop in the coming years.
  • Topic: Security, Defense Policy, NATO
  • Political Geography: Europe, Washington
  • Author: William C. Greenwalt
  • Publication Date: 12-2013
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The Pentagon has been undergoing major procurement reform since 1984, but hoped-for results have not been achieved. Bipartisan acquisition reform legislation was passed in the 1990s, but these positive changes did not hold. At the heart of the current procurement dilemma is too much faith in central planning and too little faith in the free market. Policymakers must first remedy the incentives underlying reform, and five overarching categories are driving the misplaced incentives: trust in central planning leading to increased bureaucracy, preference for defense-unique versus commercial solutions, distrust of the defense industry and profit motives, fear that the workforce is incapable of exercising discretion, and finally, preoccupation with cost certainty and maintaining low prices over achieving results and value. By reaching out to and incentivizing the private sector, the Pentagon can help reform the procurement system by lowering costs, restoring competition, and delivering taxpayers the best value for their money.
  • Topic: Defense Policy, Economics, Markets, Reform
  • Political Geography: United States
  • Author: Bruce E. Bechtol
  • Publication Date: 11-2013
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: South Korea is in a unique position. It is an economic powerhouse and a thriving democracy that faces the most ­ominous and imminent threat on its borders of any democracy in the world. Moreover, this is a threat that continues to evolve, with increasing missile, cyber, special operations, and nuclear capabilities and a new leader who shows no signs that he will be any less ruthless or belligerent than his father. To meet this threat, Seoul has undertaken a number of efforts to better deter and defend against North Korean capabilities and provocations, including increasing the defense budget, upping training with US forces, creating new command elements, and establishing plans for preemptive strikes against imminent North Korean missile launches. However, in part because of administration changes in Seoul, the South Korean effort has been uneven. And decisions remain to be made in the areas of missile defense, tactical fighter aircraft, and command-and-control arrangements that will be significant for not only South Korea but all states that have an interest in Northeast Asia's peace and stability.
  • Topic: Conflict Resolution, Security, Democratization, Development, Emerging Markets, Nuclear Weapons, Bilateral Relations, Territorial Disputes
  • Political Geography: United States, East Asia, South Korea, North Korea
  • Author: Ahmad Khalid Majidyar
  • Publication Date: 10-2013
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The Persian Gulf states of Oman, Qatar, and the United Arab Emirates (UAE) have largely been immune to the rising tide of sectarianism that has rocked the Middle East in the wake of the Arab Spring. The three monarchies have successfully integrated their Shi'ite minority populations into their countries' sociopolitical and economic spheres, giving those populations little reason to engage in violence or seek political guidance from Iran or Iraq. Omani, Qatari, and Emirati Shi'ites strongly identify themselves as citizens of their respective countries and remain loyal to their ruling regimes. However, the spillover effects of the Syrian civil war—a sectarian conflict between the Shi'ite Iran-Hezbollah-Assad axis and the opposition groups backed by regional Sunni governments—are threatening Sunni-Shi'ite stability in the UAE, Qatar, and to a lesser degree, Oman. The United States should help maintain harmony in these states by reaching out to independent Shi'ite business communities and by working with regional leaders to ensure equal citizenship, political rights, and religious freedom among minority populations.
  • Topic: Conflict Prevention, Security, Islam, Post Colonialism, Insurgency, Sectarian violence
  • Political Geography: Iraq, Middle East, Arabia, Oman, United Arab Emirates
  • Author: Leon Aron
  • Publication Date: 10-2013
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The 2008–09 financial crisis demonstrated that gas and oil exports could no longer serve as Russia's engine of economic progress and the source of a steady rise in personal incomes. Russia needed to dramatically change its investment climate through deep institutional reforms that would boost economic liberty, expand the rule of law and property rights, diminish corruption, and create more political choices for its citizens. Such reforms are all the more urgent now as Russia's economy is slowing to a crawl and trust in President Vladimir Putin is steadily declining. Yet the Kremlin has chosen to address these challenges with authoritarian consolidation, buying short-term stability at the expense of the country's longer-term prosperity and progress. Elements of the Kremlin's massive propaganda campaign include militarized patriotism and patriotic education; a selective recovery of Soviet symbols and ideals; the ultraconservative Russian Orthodox Church as the moral foundation of the regime; the promotion of a culture of subservience; and the intimidation, stigmatization, and repression of civil society and its vanguard, nongovernmental organizations. Yet instead of producing the consolidation and unity expected by the Kremlin, this campaign may yield polarization, radicalism, and violence that will prevent the country's peaceful and inclusive transition to a more dignified version of citizenship.
  • Topic: Corruption, Emerging Markets, International Trade and Finance, Oil, Natural Resources, Governance, Authoritarianism, Reform
  • Political Geography: Russia
  • Author: Patrick Keller
  • Publication Date: 10-2013
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The "grand narrative" of German security policy since the end of the Cold War has oscillated between Germany's reluctance to use hard power and Germany's desire to be seen as supportive of its American and European allies. This is reflected in the varying decisions it has made during foreign military operations and in the manner in which Germany's military has conducted those operations. At the same time, the German military has undergone a series of reforms designed to modernize German forces and to make them more flexible and deployable. But a stagnant and low level of defense expenditures has made carrying out these reforms an ongoing challenge to the German military and German defense ministry. Germany has a vital interest in a stable and liberal international order and, hence, in having a military capable of helping maintain that order. As Europe's leading economic power and, increasingly, as Europe's central political actor, Germany could and should take the lead in reversing the precipitous decline in European hard power.
  • Topic: Defense Policy, Economics, International Security, Reform
  • Political Geography: Africa, Europe, Germany
  • Author: Roger F. Noriega, José Javier Lanza
  • Publication Date: 09-2013
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: As stepped-up counternarcotics policies in Colombia and Mexico have increased pressure on regional drug trafficking networks, organized crime syndicates have relocated operations to Central America, where law enforcement agencies and institutions are ill-equipped to withstand the onslaught. These multibillion-dollar gangs are making common cause with some local politicians who are following a playbook honed by Hugo Chávez in Venezuela. The result in Venezuela was the birth of a narcostate, and similar dramas are playing out in Central America. Like Chávez, caudillos are using the democratic process to seek power, weaken institutions, and undermine the rule of law—generating turmoil that accommodates narcotrafficking. Making matters worse for Honduras is that left-wing activists abroad, in support of ousted president and Chávez acolyte Manuel Zelaya, are waging a very public campaign of outlandish claims seeking to block any US assistance to help the Honduran government resist the drug cartels. It is imperative that US policymakers vigorously support democracy, the rule of law, and antidrug programs in Honduras.
  • Topic: Corruption, Crime, Democratization, War on Drugs, Narcotics Trafficking, Fragile/Failed State
  • Political Geography: America, Latin America, Mexico
  • Author: Bryan McGrath
  • Publication Date: 09-2013
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Despite the North Atlantic Treaty Organization (NATO) taking its name from the ocean that ties Canada and the United States to their European allies, for most of NATO's history the alliance focused primarily on land power. However, with continental Europe at peace, the drawdown in Afghanistan, the rise of general unrest in North Africa and the Levant, and the American intent to pivot toward Asia, questions are increasingly arising about the capabilities of NATO's European navies to project power and sustain operations around their eastern and southern maritime flanks. These questions have grown even more urgent in the wake of those same navies' uneven performance in the 2011 military campaign against Muammar Gaddafi's Libya. Examining the major navies of America's European allies reveals a general desire, with the exception of Germany, to maintain a broad spectrum of naval capabilities, including carriers, submarines, and surface combatants. But given the significant reduction in each country's overall defense budget, procuring new, sophisticated naval platforms has come at the cost of rapidly shrinking fleet sizes, leaving some to wonder whether what is driving the decision to sustain a broad but thin naval fleet capability is as much national pride as it is alliance strategy.
  • Topic: Foreign Policy, Defense Policy, NATO, Cold War, Treaties and Agreements, War
  • Political Geography: United States, Europe, North America
  • Author: Andrew Shearer
  • Publication Date: 08-2013
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Like many other Western states, following the Cold War, Australia cut its defense budget, resulting in significant shortfalls in key military capabilities. Since the mid-1990s, successive Australian governments have outlined plans intended to boost the capabilities of Australia's armed forces. However, these strategic ambitions have in recent years been undercut by changes in government spending priorities and shortfalls in the national budget, jeopardizing the long-standing technological advantage Australian forces have enjoyed over other states in the region. As major Asian states such as China continue to grow their economies and modernize their armed forces, Australia must commit sufficient resources to its modernization agenda or risk losing its ability to help shape the Asia-Pacific ­security environment and risk fulfilling its role as a key US partner in America's pivot to Asia.
  • Topic: Foreign Policy, Defense Policy, Cold War, Economics, Armed Forces
  • Political Geography: Africa, United States, China, Asia, Australia
  • Author: Ahmad Khalid Majidyar
  • Publication Date: 08-2013
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: For decades the Kingdom of Saudi Arabia has been America's indispensable ally in the Middle East, and the ­Kingdom's stability remains vital for US strategic interests in the region. While antigovernment protests in the Kingdom's Sunni-majority regions have been small and sporadic in the wake of Arab Spring, there has been an unremitting unrest in the strategic Eastern Province, home to Saudi Arabia's marginalized Shi'ite minority and major oil fields. As in the 1980s, if government repression and discrimination push the Shi'ites to extremes, some may resort to violence and terrorism, jeopardizing American interests in the region, benefitting Iran and ­al-Qaeda, disrupting the equilibrium of global oil markets, and adversely affecting economic recovery in the West. To ensure lasting stability in the Kingdom, the United States must work with the Saudi government to achieve gradual but meaningful reforms that include integrating the Shi'ites into the Kingdom's sociopolitical system.
  • Topic: Conflict Prevention, Security, Islam, Sectarian violence
  • Political Geography: United States, Middle East, Arabia, Saudi Arabia
  • Author: Michael Rubin
  • Publication Date: 08-2013
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Kuwait is perhaps America's closest Arab ally; it remains the only country in the Middle East on whose behalf the United States went to war. Although the Islamic Republic of Iran has at times tried to leverage Kuwait's large Shi'ite minority against the Kuwaiti state, it has mostly been unsuccessful. Indeed, Kuwait's Shi'ite ­community has repeatedly worked to prove its loyalty to Kuwait. Recent political instability, however, is again opening the door for sectarian forces to undermine Kuwait and, by extension, an important pillar of US defense strategy.
  • Topic: Conflict Prevention, Defense Policy, Islam, Bilateral Relations, Sectarian violence
  • Political Geography: United States, Iran, Middle East, Arabia
  • Author: John H. Makin
  • Publication Date: 03-2011
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The array of postbubble stresses and uncertainties identified in the January 2010 Economic Outlook (“The Year Ahead”) promised that the new year would see plenty of volatility in markets. That is exactly what is playing out as we move through the first quarter. As risks accumulate, it may be that 2010 is shaping up as a mirror image of 2009, reversing last year's down-then-up pattern with an up-then-down pattern this year.
  • Topic: Economics, International Trade and Finance, Markets, Monetary Policy, Financial Crisis
  • Political Geography: United States, Japan, China, Europe
  • Author: John H. Makin
  • Publication Date: 06-2011
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Market conditions in the United States, Japan, China, and Europe portend a weakening global economy. While not dramatic in any one region save an earthquake-burdened Japan, these conditions could accumulate to create a problematic loss of momentum for global growth, especially compared to current upbeat consensus views for the second half of 2011.
  • Topic: Economics, International Trade and Finance, Global Recession
  • Political Geography: United States, Japan, China, Europe
  • Author: Gary J. Schmitt, Thomas Donnelly
  • Publication Date: 07-2011
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: National security is neither a "sacred cow" nor just another federal budget line item. Providing for the common defense of the American people and our homeland is the primary responsibility of policymakers in Washington. However, in an effort to protect social entitlements like Medicare, Medicaid, Social Security and the health care reform law from serious deficit and debt reduction efforts, President Obama has proposed not only to raise taxes, but also to cut another $400 billion more from future national security spending. As Obama said on June 29, 2011, "[Outgoing Secretary of Defense] Bob Gates has already done a good job identifying $400 billion in cuts, but we're going to do more."
  • Topic: Defense Policy, Arms Control and Proliferation, Debt, War
  • Political Geography: United States, America, Washington
  • Author: Gary J. Schmitt, Thomas Donnelly
  • Publication Date: 03-2011
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Over the past year, actions by the People‘s Republic of China (PRC) have called into question its previous assertions that its rise to great-power status would be peaceful. Whether it was scolding countries around the world about the Nobel Peace Prize awarded to Chinese dissident Liu Xiabo, declaring that its ?core interests? now included some 1.3 million square miles of the South China Sea, dismissing complaints of neighbors as failing to recognize that "China is a big country," ignoring North Korean acts of terror, challenging U.S. naval ships on the high seas, creating new confrontations with Japan over disputed islands, slashing its export of rare earth elements, continuing cyber attacks on American defense and commercial entities, or testing a new stealth fighter during the visit of the American secretary of defense, the picture that emerges is of a China that believes it can now throw its considerable economic and military weight around. It‘s a challenge that the U.S. has been slow to meet and, as a result, led to considerable uncertainty among friends and allies about whether the U.S. is up to that challenge—uncertainty fed in no small measure by prospects of a declining American defense budget.
  • Topic: Defense Policy, Arms Control and Proliferation
  • Political Geography: China, America
  • Publication Date: 11-2011
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The future of America's national security hangs in the balance. Facing a looming Thanksgiving deadline, a select bipartisan panel of 12 lawmakers is struggling to hammer out legislation that would reduce the federal deficit by more than $1.2 trillion over the next 10 years. However, it remains unclear if they will succeed.
  • Topic: Defense Policy, Debt
  • Political Geography: United States, America
  • Author: John H. Makin
  • Publication Date: 04-2010
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: January ended on a note of diminished hope for a sustainable global recovery as stock markets retreated from their midmonth highs. Since mid-February, however, higher hopes for a sustainable global recovery have returned. Equity markets have rallied along with markets for corporate and global sovereign bonds. Some mitigation of perceived risks facing global investors has provided a chance for hope to “float up,” and it has done so. Tension over the cohesion of the European Monetary Union and, in particular, concerns over a possible sovereign-debt default by Greece have eased, and investors continue to hope that the debt problems in Greece will not spread to the rest of Europe.
  • Topic: Economics, International Political Economy, International Trade and Finance, Markets, Financial Crisis
  • Political Geography: Europe, Greece
  • Author: John H. Makin
  • Publication Date: 02-2010
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: February always brings with it the president's proposals for taxing and spending in the coming fiscal year. The president's budget proposals are accompanied by congressional and administration estimates of the path deficits and government debt are expected to take in coming years. Last year, those projections, especially a three-year string of actual and projected deficits over a trillion dollars from 2009 through 2011, excited widespread comment and handwringing about runaway deficits and their allegedly damaging effects in the form of lower growth, higher inflation, and higher interest rates.
  • Topic: Debt, Economics, Political Economy, Politics
  • Political Geography: United States
  • Author: John H. Makin
  • Publication Date: 01-2010
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: We can expect 2010 to be a volatile year. This likelihood is underscored by looking back at 2008 and 2009. Two thousand eight was a highly volatile year leading up to the collapse of Lehman Brothers in September, which was followed by the risk of a total systemic meltdown. That sharp and obvious risk spike prompted massive policy responses that were simply the largest that central banks, with rate cuts and liquidity provision, and governments, with tax cuts and spending increases, could manage. The result—beginning in March 2009—was a linear rise in the prices of risky assets, the result of massive relief once the slip into a global depression had been averted and the acute phase of the crisis in the financial sector had passed.
  • Topic: Economics, International Trade and Finance, Markets, Financial Crisis
  • Political Geography: United States, Japan, China, Europe
  • Author: Thomas P. Gies
  • Publication Date: 04-2010
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: How might recess appointments to the National Labor Relations Board (NLRB) affect federal labor law? Controversial appointee Craig Becker is known for advocating policies that fall outside the mainstream view of labor laws. Although the views of one member of the NLRB will not automatically translate into dramatic policy changes, concerns that members of the NLRB may rewrite important principles of federal labor laws through litigation are not unfounded. Whether President Barack Obama's NLRB would be able to enact key provisions of the Employee Free Choice Act through litigation rather than congressional action remains to be seen.
  • Topic: Labor Issues, Law
  • Political Geography: United States
  • Publication Date: 10-2010
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Since the end of the Cold War, administrations of both political parties have underfunded the military, first harvesting a "peace dividend" by reducing the size of the force and then repeatedly postponing investments needed to replace worn out equipment and preserve the technological advantages that have been a traditional source of American strength. Now, just as this strain on the military--engaged in today's persistent irregular wars, yet unable to prepare fully for the wars of the future--reaches a point of crisis, come new calls to cut the Defense Department's budget, amplified by the fears of a faltering economy, the federal government's desire to boost spending elsewhere, and its inability to rein in other spending. Yet the arguments frequently made for Pentagon spending cuts are concocted from a mix of faulty analysis and out-of-context "facts."
  • Topic: Defense Policy, Arms Control and Proliferation, Debt
  • Political Geography: United States
  • Author: John H. Makin
  • Publication Date: 01-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: On December 16, 2008, Federal Reserve chairman Ben Bernanke exercised decisive leadership at a watershed meeting of the Federal Open Market Committee (FOMC). In its official statement after the meeting, the committee pledged to “employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability.” The pledge to preserve price stability was not a commitment to fight inflation, as is typical, but a highly unusual commitment to fight deflation.
  • Topic: Economics, Markets, Political Economy
  • Political Geography: United States
  • Author: John H. Makin
  • Publication Date: 02-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The global financial and economic crisis that emerged in August 2007 has entered a dismaying fourth phase. The January 17–18, 2009, weekend edition of the Financial Times, which has been a major chronicler of the crisis and its many aspects, laid out a frightening timeline of an accelerating and intensifying oscillatory cycle of crisis and failed policy response that started just fifteen months ago. Each phase begins with a shock and ends with a seemingly decisive policy measure meant to contain or “fix” the crisis. Each phase is shorter than the previous one and culminates in a much larger policy response. Throughout the crisis, the losses of financial institutions have steadily grown at an accelerating pace as the underlying conditions in the financial sector and, since September 2008, in the underlying global economy deteriorate more rapidly. Such a disturbing pattern must be truncated by a large, coordinated global policy response to arrest the accelerating erosion of the market capitalization of multinational banks and insurance companies that has resulted.
  • Topic: Debt, Economics, Markets, Political Economy
  • Political Geography: United States
  • Author: John H. Makin
  • Publication Date: 03-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: As the global financial and economic crisis has grown increasingly dire—the deterioration just since the November U.S. election is breathtaking—market participants and policymakers alike have looked to three past crisis models as part of an intensifying search for ways out of the current crisis. First, the Great Depression of the 1930s is being examined ever more closely for possible lessons now that commentators have moved past an under- standable reluctance to mention that experience as relevant to today's situation. Second, the Scandinavian financial crisis of the early 1990s, which included a proactive move toward bank nationalization by the Swedish government, is also widely discussed. Finally, many allusions have been made to the disquieting parallels between today's U.S. experience and that of Japan during its “lost decade” (1991–2001) of recession and deflation, especially after 1998.
  • Topic: Economics, Markets
  • Political Geography: United States, Japan
  • Author: John H. Makin
  • Publication Date: 04-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: On March 18, Federal Reserve chairman Ben Bernanke intensified the important battle against global deflation with a commitment to expand the Fed's balance sheet by an extra $1.15 trillion. With some luck and persistence, that step could boost growth by a percentage point or more and, even more important, substantially reduce the risk of deflation.
  • Topic: Economics, Markets, Political Economy
  • Political Geography: United States
  • Author: Kenneth P. Green, Ben Eisen
  • Publication Date: 06-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Canadians have much to celebrate concerning their natural environment. Over the past 30 years, Canada's air and water have become cleaner, ecosystems and timberlands have been preserved, and soils that feed not only Canadians but also many others around the world have been protected. This has happened while Canada's population and economy have grown strongly, which has propelled Canada, a country of only 33 million, to the status of an economic powerhouse with a standard of living that is the envy of much of the world. There is still more that can be done, but Canada is well on the way toward environmental sustainability.
  • Topic: Climate Change, Environment, Oil
  • Political Geography: Canada, North America
  • Author: Kenneth P. Green, Steven F. Hayward
  • Publication Date: 12-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: AEI's environmental team has been especially busy lately responding to numerous press inquiries about the “Climategate” scandal. We reprint below two pieces, one by Steven F. Hayward that appeared in The Weekly Standard, and another by Kenneth P. Green, which appeared on The American. Hayward's piece was mentioned prominently on Fox News Sunday. Green also testified on the science of global warming recently before the Senate Committee on Finance. In addition, Samuel Thernstrom and Lee Lane, who are codirecting AEI's Geo engineering Project, have been following the developments and commenting on them. AEI released an updated version of its Public Opinion Study “Polls on the Environment and Global Warming,” which shows that, even before the latest controversy, opinion about the seriousness of global warming had declined sharply in several recent polls.
  • Topic: Climate Change, Environment, Science and Technology
  • Political Geography: America
  • Author: Bryan E. Dowd
  • Publication Date: 11-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Congressional mismanagement of Medicare is a bipartisan project in which Democrats and Republicans set aside the rancor of party politics and ideological differences and work hand in hand to run the program into the ground. The latest attempts to "fix" physician payments by replacing a sizeable cut in Medicare fees with a small increase provide the evidence.
  • Topic: Debt, Health, Markets, Politics
  • Author: Ronald W. Reagan
  • Publication Date: 11-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: In 1988, as he was about to step down as president, Ronald Reagan received the Francis Boyer Award, AEI's highest honor. He chose for the theme of his speech that December evening, eleven months before the Berlin Wall fell, the struggle of people everywhere for freedom. In his speech, he anticipated the momentous events that would occur in 1989: “So while our hopes today are for a new era, let us remember that if that new era is indeed upon us, there was nothing inevitable about it. It was the result of hard work—and of resolve and sacrifice on the part of those who love freedom and dare to strive for it.” Freedom works, he said. He saluted the Solzhenitsyns, the Sakharovs, and the Sharanskys, saying, “We have seen the thrilling spectacle of mankind refusing to accept the shackles placed upon us.” As we recall the events of November 1989, it is important to remember the struggle and to recommit ourselves to the hard work of extending freedom to those who have yet to enjoy its blessings.
  • Topic: Conflict Resolution, Cold War, Power Politics
  • Political Geography: Russia, United States, Berlin
  • Author: Christopher DeMuth
  • Publication Date: 10-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: AEI senior fellow Irving Kristol—godfather of the neoconservative movement and one of the towering intellectual figures of the twentieth century—died peacefully on September 18 at the age of eighty-nine. Mr. Kristol's connection to AEI began long before he became a full-time scholar at the Institute in 1988. In 1973, he gave the first of AEI's Distinguished Lectures on the Bicentennial of the United States. The lectures were delivered at historic sites around the country, and Mr. Kristol's lecture, “The American Revolution as a Successful Revolution,” was given at St. John's Church in Washington, where many of the nation's presidents have worshipped. We reprint excerpts from it below after a tribute to him written by Christopher DeMuth, the D. C. Searle Senior Fellow at AEI.
  • Topic: Cold War, Politics, International Affairs, Political Theory
  • Political Geography: United States, Washington
  • Author: John H. Makin, Vincent R. Reinhart, Peter J. Wallison
  • Publication Date: 09-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: One year ago, on September 14, Lehman Brothers declared bankruptcy. The next day the Dow fell five hundred points. Soon thereafter, the government essentially nationalized AIG, made Goldman Sachs and Morgan Stanley into bank-holding companies, and petitioned Congress for aid. In early September, Fannie Mae and Freddie Mac had been placed in government conservatorship. These events followed the bursting of the housing bubble. We present here three essays written by AEI scholars in the spring and summer of 2009 on the origins of the financial crisis whose reverberations we continue to feel today. Vincent R. Reinhart sets the stage by reminding us of the importance of getting the story of what happened right, as policy recommendations flow from our understanding of what occurred. He also tells us that “the narrative first written about the Great Depression was wrong in many important respects.” John H. Makin and Peter J. Wallison focus on the misguided policies that contributed to the crisis. In a new Economic Outlook, Makin discusses three important lessons of the financial crisis that should be understood in order to enable a faster, more effective policy response to future crises.
  • Topic: Economics, Markets, Financial Crisis
  • Author: John H. Makin
  • Publication Date: 08-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: China's economic statistics have become the envy of the world. On July 15, China reported a 7.9 percent growth rate for the second quarter of 2009 compared to the same period a year earlier. Meanwhile, China's stock markets are on fire, and its property markets are heating up fast as well. Shanghai's two stock markets are up 75 percent and 95 percent respectively so far this year. The more widely traded Hong Kong Index is up 27 percent, a stellar performance compared to largely flat stock markets in the United States, Europe, and Japan. In even stronger contrast, Russia, which is one of China's emerging-market peers, has seen its economy drop by 10.1 percent during the first half of this year, while its stock market has struggled as well.
  • Topic: Economics, Emerging Markets, International Political Economy
  • Political Geography: Russia, United States, Japan, China, Europe, Hong Kong
  • Author: John H. Makin
  • Publication Date: 05-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Governor Zhou Xiaochuan's comment is an open acknowledgement that the “adverse feedback loop,” in which financial-sector problems hurt the real economy, which in turn intensifies negative conditions in finance, has hit China hard. China's real growth rate, which peaked at 13 percent in 2007 and is heavily dependent on exports, plunged to 6.1 percent on a year-over-year basis in the first quarter of 2009. Nominal growth, a measure of the current money value of goods and services, fell even more sharply, from 21.4 percent in 2007 to 3.6 percent in the first quarter of this year. The fact that the nominal growth rate is 2.5 percent below the real growth rate suggests that, at least as far as output is concerned, deflation has taken hold at a 2.5 percent rate in China.
  • Topic: Economics, Emerging Markets, International Political Economy
  • Political Geography: China
  • Author: John H. Makin
  • Publication Date: 12-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: A new truth of geopolitics has emerged during 2009. It is that the complex and rapidly evolving Sino-American relationship has become the most important bilateral relationship either country has. To this observation, made recently by William C. McCahill Jr. in the November 13 special issue of The China Report, must be added another claim: the course of the Sino-American relationship in both the economic and the political spheres will play a growing role in determining the levels of global economic and geopolitical stability. Trips like President Barack Obama's three-day visit to Shanghai and Beijing November 15–17 will probably be made with increasing frequency in coming years.
  • Topic: International Relations, Foreign Policy, Diplomacy, International Political Economy, International Trade and Finance, Bilateral Relations
  • Political Geography: United States, China, America, Shanghai, Beijing
  • Author: John H. Makin
  • Publication Date: 07-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The recent steps by the Federal Reserve to preempt deflation have—ironically and unexpectedly— prompted a surge in inflation fears both inside the United States and abroad, especially in China. Specifically, the Fed's measures to go beyond the stimulus inherent in a zero percent federal funds rate by purchasing Treasury and mortgage securities has conjured visions—especially in the eyes of major buyers of Treasury securities, China foremost— of massive money printing to underwrite trillions of dollars of additional government borrowing at low interest rates. As markets have shown, if that were the Fed's intention—which it decidedly is not—the effort would fail because excessive money printing—creating a money supply larger than the quantity of money demanded— would push up interest rates as inflation expectations rose.
  • Topic: Economics, International Political Economy, International Trade and Finance, Monetary Policy
  • Political Geography: United States, China
  • Author: John H. Makin
  • Publication Date: 09-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: More than two years have passed since the U.S. housing bubble burst. That event ushered in a financial crisis that was not only intense but also stunning. So stunning in fact, that in August of last year, just a month before the collapse of Lehman Brothers, the global economy was close to a crisis worthy of comparison with the Great Depression, yet neither the markets nor the Federal Reserve had much of an inkling of what was to come. The Standard and Poor's (S) 500 Index had come down to about 1,300 from its October 2007 high of 1,576. Positive growth had just been reported for the U.S. economy during the second quarter of 2008 at an annual rate of 2.8 percent (later revised down to 1.5 percent). Almost one percentage point of that growth came from U.S. consumption, and government spending also contributed. The wave of relief after the Bear Stearns scare in March 2008 had provided a nice boost to the economy and to markets. That boost was further enhanced by the substantial contribution to growth from net exports (2.9 percentage points) thanks to what was, then, continuing strength in the global economy, especially in China, which had reported blistering 10.1 percent year-over-year growth in the second quarter of 2008. These and other positive components more than offset a drag from inventories and residential investment. In short, the real economy had not shown much evidence of damage emanating from the chaos that was churning in the financial sector.
  • Topic: Economics, International Political Economy, International Trade and Finance, Markets, Monetary Policy, Financial Crisis
  • Political Geography: United States, China
  • Author: John H. Makin
  • Publication Date: 11-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The only thing scarier than the slide of the dollar, which has dropped by 15 percent since March, would be an attempt by the Federal Reserve to stop it. Such an attempt would show that we have learned nothing from the Bank of Japan's disastrous premature exit from a zero-interest policy in August 2000. Closer to home, it would resemble the Fed's premature move to mop up “excess” reserves by doubling reserve requirements in three steps between August 1936 and May 1937, which was followed by the third-worst recession of the twentieth century, from May 1937 to June 1938.
  • Topic: Economics, International Political Economy, International Trade and Finance, Monetary Policy, Financial Crisis
  • Political Geography: United States, Japan
  • Author: John H. Makin
  • Publication Date: 10-2009
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Wall Street is dancing again to the music of a sharp rise in stock prices. The question that remains is whether Main Street, currently languishing in a sad world of job losses, unavailable credit, and weakened balance sheets, will get to join the party. To put the question more precisely, will the “adverse feedback loop” that saw a financial collapse last fall that crushed the real economy work in reverse, so that a financial bounce boosts the real economy in coming quarters? The jury is still out on this important question.
  • Topic: Economics, Markets, Financial Crisis
  • Political Geography: United States
  • Author: John H. Makin
  • Publication Date: 02-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Now that Wall Street and the Federal Reserve have finished congratulating themselves for not having been alarmists—in other words, for failing to recognize that a recession was looming—they are now facing up to the onset of a U.S. recession and a rapidly spreading financial crisis. Having been late to reach that conclusion, they now grudgingly admit that we may have a brief "V-shaped" recession and are apparently hoping that Fed rate cuts and a fiscal stimulus package will quickly solve the economy\'s problems.
  • Topic: Economics, Political Economy
  • Political Geography: United States
  • Author: John H. Makin
  • Publication Date: 01-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Japan experienced a disastrous decade of economic stagnation and deflation from 1991 to 2001 after bubbles in its stock market and land market collapsed. While some economic pain was unavoidable—given a 60 percent plunge in equity prices between late 1989 and August 1992, accompanied by the onset of what ultimately became a 70 percent drop in land values by 2001—the "lost decade" was not an inevitable outcome. It required a series of persistently wrong economic policy decisions that ignored the lessons learned in America's Great Depression of the 1930s and the subsequent research on the causes of that painful period.
  • Topic: Economics, Human Rights, Human Welfare, Humanitarian Aid, Markets
  • Political Geography: United States, Japan, America, Asia
  • Author: John H. Makin
  • Publication Date: 04-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: In October 1907, J. P. Morgan stemmed a financial panic by coercing other banks to join him in providing credit to Wall Street brokerage firms teetering on the edge of bankruptcy.[1] This year, over the weekend including March 15—the ominous Ides of March—James Dimon, head of JPMorgan Chase, was the one to act. With the Federal Reserve squarely behind him and assuming the risk, he prevented a Bear Stearns bankruptcy by agreeing to purchase the firm, providing it with a decent burial, at a price of $2 per share. Bear Stearns's stock had been valued at over $160 per share just a year ago. The $2 price virtually wiped out the value of that stock, one-third of which is owned by its 14,000 employees. This was clearly not a bailout for Bear Stearns shareholders, and whether or not the steps taken by the Fed on March 16 were sufficient to arrest a further collapse of available credit and the economy remains to be seen. As long as house prices keep falling, the underlying problem for credit markets and the economy remains.
  • Topic: Economics, Government, Markets
  • Political Geography: United States
  • Author: John H. Makin
  • Publication Date: 05-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The desire to enhance and store wealth has been present ever since income rose above subsistence levels. In ancient times, prior to the creation of symbolic financial claims on wealth, wealth storage was, quite literally, the storage of intrinsically valuable articles in temples, pyramids, or other such formidable structures. Even today in Tibet, which was long a theocracy, a major repository of wealth can be seen in religious statues of solid gold resting in temples.
  • Topic: Civil Society, Economics
  • Political Geography: United States
  • Author: John H. Makin
  • Publication Date: 01-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The bursting of every bubble is followed by statements suggesting that the worst is over and that the real economy will be unharmed. The weeks since mid-March have been such a period in the United States. The underlying problem—a bust in the residential real-estate market—has, however, grown worse, with peak-to-trough estimates of the drop in home prices having gone from 20 to 30 percent in the span of just two months. Meanwhile, the attendant damage to the housing sector and to the balance sheets tied to it has grown worse and spread beyond the subprime subsector.
  • Topic: Economics, Government, International Trade and Finance, Political Economy
  • Political Geography: United States
  • Author: John H. Makin
  • Publication Date: 07-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The Fed is in a bind, pulled toward easier monetary policy by a weak economy and fragile credit markets, while simultaneously needing to resist higher inflation. On Monday, June 9, after a weekend of headlines regarding a half-percentage-point rise in the unemployment rate, Federal Reserve chairman Ben Bernanke gave a pathbreaking speech entitled "Outstanding Issues in the Analysis of Inflation" at the Federal Reserve Bank of Boston's fifty-third Annual Economic Conference. In that speech, after suggesting that the risks of a substantial  economic downturn had diminished over the past month and citing further progress in the repair of financial and credit markets, he proceeded to address the problem of rising inflation. In two sentences, he contributed to a sharp, fifty-basis-point rise in two-year bond yields and boosted the market's assessment of the chance of a fifty-basis-point rise in the federal-funds target rate at the September 16 meeting of the Federal Open Market Committee (FOMC) from virtually zero to nearly 70 percent.
  • Topic: Economics, International Trade and Finance
  • Political Geography: United States
  • Author: Ted Brennan, Robert "Bobby" Charles, Henry Cuellar, Roberta Jacobson, Armand Peschard-Sverdrup
  • Publication Date: 03-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Drug abuse and related crime claim nearly thirty-five thousand American lives and sap $180 billion from our economy every year.1 Although the United States is understandably preoccupied with the threat of Islamic terrorism, it must never let down its guard against the well-financed, bloodthirsty, illicit drug cartels that exact a staggering price on our well-being and economy. President George W. Bush's fiscal year 2009 budget proposes to spend well over $14 billion for federal programs to suppress demand and attack supply. Because most cocaine and heroin find their way to the U.S. market through Mexico, it is essential that Mexican authorities confront the illegal drug syndicates whose cross-border crime threatens both countries. The Mérida Initiative—named for the Yucatan city where Bush, then-president of Guatemala Óscar Berger, and Mexican president Felipe Calderón met in March 2007—proposes to make a $1.4 billion multiyear U.S. contribution to support Mexican law enforcement and judicial reforms in their antidrug efforts. The challenges are formidable: Mexico's relatively weak judicial institutions are hard-pressed to take on these well-heeled gangsters on their own, and both sides are protective of their national sovereignty. Nevertheless, both countries have signaled their commitment to this cause: at a February 7, 2008, hearing, the Drug Enforcement Agency's chief of intelligence, Anthony Placido, praised the tangible measures being taken and sacrifices being made by Mexico today and urged skeptical U.S. lawmakers to seize the opportunity to cooperate with Mexican allies against a common foe. Despite heavy media focus on the counternarcotics elements of the initiative, when the specifics of the initiative are examined, it is clear that its aim is to strengthen Mexico's security institutions, enabling them to deal with the threat nonstate actors—be they terrorists, organized crime, criminal gangs, or domestic radical groups—pose to the country's security.
  • Topic: Crime, War on Drugs
  • Political Geography: United States, Latin America, Mexico
  • Author: Roger F. Noriega
  • Publication Date: 03-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: One step ahead of the devil himself, Fidel Castro is proposing to pass the baton to his revolutionary partner and younger brother, Raúl. With characteristic audacity, the old dictator is hoping that he can bamboozle a gullible international community into recognizing such a succession as a fait accompli. Of course, there is no reason that the successor regime will be able to consummate this arrangement as long as the rest of the world gives the welfare of the Cuban people a second thought. Fidel's disintegration makes way for an extraordinarily expectant time in Cuba's history. Men and women of good will on the island may yet snatch their future from a decrepit and discredited regime, and outsiders' only role should be to help them in every way possible. We should bear in mind at this critical hour that one false move—by the United States, in particular—could confer legitimacy on a “new” Cuban dictator and consign 11 million Cubans to prolonged desperation.
  • Topic: Foreign Policy, Communism
  • Political Geography: United States, Latin America
  • Author: Megan Davy
  • Publication Date: 05-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Latin American and Caribbean (LAC) economies, usually susceptible to international financial turmoil, are especially vulnerable to even minor tremors in U.S. markets. Regional policymakers and entrepreneurs, therefore, have been closely watching the current U.S. subprime credit crisis. Here is the good news: all signs point to relatively minor symptoms in LAC countries—despite a rocky financial history during the 1980s and 1990s—thanks in large part to reforms undertaken in response to previous financial crises, as well as continued high commodity prices that will likely buoy export markets. Although the economic downturn in the United States and other global markets will likely expose lingering weaknesses in the region's economy, this latest crisis can provide an impetus to complete the unfinished business of building more modern, resilient economies.
  • Topic: Development, Economics, Emerging Markets
  • Political Geography: United States, South America, Latin America, Central America
55. Putin-3
  • Author: Leon Aron
  • Publication Date: 01-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: In the past nine years, Russian foreign policy has been examined several times in these pages. At no other time, however, has its direction been as troubling as it is today. To understand the causes of this disturbing evolution and to gauge its future course, the changes have to be examined in the context of the regime's ideological and political transformation since 2000, when Vladimir Putin was elected president.
  • Topic: Conflict Prevention, International Relations, Security, Foreign Policy
  • Political Geography: Russia, Europe, Asia
56. Putinism
  • Author: Leon Aron
  • Publication Date: 05-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Throughout Russia's history, the weakness of institutions and laws has ensured that the successor regimes rarely, if ever, turn out as intended by the previous ruler. Instead of continuity, the national tradition of highly personalized government often produces a very different political organism ostensibly from the same institutional framework. Yet with former president Vladimir Putin's staying on as a kind of regent–prime minister to the dauphin-president Dmitri Medvedev, at least for the next few years, the ideology, priorities, and policies of the Putin Kremlin—what might be called Putinism—are almost certain to inform and guide the Medvedev administration. Part I of this Outlook discusses the components of the new Russian authoritarianism, and parts II and III examine the elements of “Russia, Inc.”—the corporatist state that Putin has built—and the factors that may affect Russia's economic performance, stability, and foreign policy in the future.
  • Topic: Foreign Policy, International Political Economy
  • Political Geography: Russia, Europe, Asia
  • Author: Nicholas Eberstadt
  • Publication Date: 01-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: With a newly elected South Korean president willing to join the United States in standing up to North Korea, the Bush administration now has a unique opportunity to put pressure on Kim Jong Il to abandon his country's nuclear program and desist from its human rights abuses. In this article, AEI's Nicholas Eberstadt asks whether the administration will seize the opportunity.
  • Topic: Diplomacy, Human Rights, Nuclear Weapons
  • Political Geography: United States, Asia, South Korea, North Korea
  • Author: Roger F. Noriega
  • Publication Date: 01-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: If Time magazine had wanted to recognize a true democrat and reformer as the 2007 Person of the Year, they would have chosen Brazil's president Luiz Inacio "Lula" da Silva over Russia's Vladimir Putin. Working within Brazil's free, pluralistic democratic system, Lula has focused on economic growth and social justice, getting tangible results with his new anti-hunger and poverty programs. Unlike Putin, Lula is also strengthening key institutions and the rule of law.
  • Topic: Democratization, Development
  • Political Geography: South America, Latin America
  • Author: Douglas J. Besharov
  • Publication Date: 01-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Finding that an op-ed by Michael Gerson poorly defined the conservative approach to social problems, Douglas J. Besharov outlined six principles that underlie the conservative position on government social programs. Besharov notes that being cautious about the possible ill effects of government intervention is not unique to conservatives. It is simply realistic to be skeptical about the federal government's ability to mitigate serious social welfare problems.
  • Topic: Civil Society, Government, Human Welfare
  • Political Geography: United States
  • Author: Amity Shlaes
  • Publication Date: 01-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Democratic presidential candidates are invoking the New Deal as a model for addressing infrastructure, economic, and employment problems in the United States. But a careful look at New Deal spending suggests, in the words of Amity Shlaes, "not how much the public works achieved . . . [but] how little." Advocates for new federal government spending on highways, buildings, and roads should carefully weigh the need against the damage that comes from projects and jobs created for political reasons.
  • Topic: Government, Industrial Policy, Political Economy, Politics
  • Political Geography: United States
  • Author: Henry Olsen
  • Publication Date: 01-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Republican presidential candidate Mike Huckabee's pro-faith, pro-government message is similar to the platforms of conservative political parties on the European continent. But is the Christian Democratic party model one that the GOP should consider emulating?
  • Topic: Politics
  • Political Geography: United States, Europe
  • Author: Andrew G. Biggs
  • Publication Date: 03-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Until recently, Senator Barack Obama (D-Ill.) was surprisingly responsible regarding Social Security, noting the urgency of reform and saying all options should be on the table. But having cornered himself with Democratic activists whose attitudes toward Social Security reform range from demagoguery to denial, his solution to the system's problems has veered leftward. He now plans to fix Social Security exclusively with higher taxes. The new Obama plan would not only fail to resolve the system's long-term problems, but would also impose significant costs on the economy as a whole.
  • Topic: Demographics, Economics, Politics
  • Political Geography: United States
  • Author: Scott Gottlieb
  • Publication Date: 03-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Although John Edwards is no longer a presidential candidate, his attacks on the U.S. health care system will continue to resonate. As a candidate, he used the tragic case of Nataline Sarkisyan, who died while awaiting a liver transplant, as an indictment of the U.S. medical system and an argument for a European-style single-payer system. But AEI's Scott Gottlieb, M.D., argues that there is little support for Edwards's argument that a single-payer system would be better for people who need transplants. The data show, he says, that organ access in the United States, our willingness to transplant the sickest patients, and U.S. medical outcomes are among the best in the world.
  • Topic: Government, Health, Human Welfare
  • Political Geography: United States, California
  • Author: Amity Shlaes, Vincent R. Reinhart, Allan H. Meltzer, John L. Chapman
  • Publication Date: 04-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: How fragile is our financial system? What are the implications of the Fed's actions on Bear Stearns? Do we need new ways of thinking about the risks the system entails? In recent articles, four AEI scholars have looked closely at the evidence of what went wrong and what is ahead.
  • Topic: Economics, Government
  • Political Geography: United States
  • Author: Walter Berns
  • Publication Date: 04-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Debate over whether to keep the Electoral College or move to a system of direct popular election of the president is a hardy perennial of the presidential election season. In this article, the eminent constitutional scholar Walter Berns reminds us of the arguments in favor of the Electoral College and dissects the proposals of those who would nullify it without having to abolish it.
  • Topic: Politics
  • Political Geography: United States
  • Author: Alan D. Viard
  • Publication Date: 04-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Buried in the 227-page Social Security trustees' report are some dramatic numbers about Social Security's future promises. AEI resident scholar Alan D. Viard tells us that "a typical worker retiring in 2050 has been promised 47 percent more than today's retirees, and one retiring in 2080 has been promised more than double today's benefits." To address the program's financial problems, he says, the rules need to be changed to link future retirees' benefits to inflation. That move, he says, would go a long way toward solving the system's problems.
  • Topic: Security, Economics, Political Economy
  • Political Geography: United States
  • Author: James Q. Wilson
  • Publication Date: 04-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: In an article in the Los Angeles Times on March 30, 2008, James Q. Wilson dissected a new report that suggests the United States incarcerates too many people. Wilson acknowledges that there are problems with U.S. imprisonment policy, but he maintains that an argument about the cost of prisons needs to take into account their benefits.
  • Topic: Civil Society
  • Political Geography: United States, California
  • Author: Danielle Pletka
  • Publication Date: 04-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: On April 8, Iran announced that it was expanding its plans to enrich uranium, despite demands from the United Nations (UN) Security Council that it halt the program. Iran will start installing six thousand more centrifuges in addition to its three thousand existing ones. In testimony before the Senate Finance Committee, AEI vice president Danielle Pletka reviewed recent U.S. and UN policy toward Iran; examined the evidence on sanctions, arguing that they are taking a toll on Iran's economy; and looked at what other options we now have for dealing with Iran.
  • Topic: Foreign Policy, Nuclear Weapons, United Nations
  • Political Geography: United States, Iran, Middle East
  • Author: Frederick W. Kagan
  • Publication Date: 04-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: In a recent article, AEI resident scholar Frederick W. Kagan examined one of the recurring themes in the recent congressional hearings on the situation in Iraq. General David Petraeus and Ambassador Ryan Crocker were repeatedly told that the size and scope of our Iraq effort were preventing the United States from prevailing in the "real fight" against al Qaeda in the Afghan-Pakistan border region. Kagan, the author of four reports on Iraq strategy, including the latest, Iraq: The Way Ahead, examines the reality of the popular claim.
  • Topic: Defense Policy, Terrorism, War
  • Political Geography: Afghanistan, Iraq, Middle East, Asia
  • Author: Michael Rubin
  • Publication Date: 04-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The name Fethullah Gülen is virtually unknown in the United States. Self-exiled here for more than a decade, this prominent Turkish theological and political thinker is the leader of a movement estimated conservatively to have more than a million followers in Turkey. The movement controls a business empire of charities, real estate, companies, and schools. Thousands of Gülen's followers populate Turkey's bureaucracies. AEI's Michael Rubin believes that, just as many people remained clueless or belittled concerns about Ayatollah Ruhollah Khomeini's intentions in Iran thirty years ago, many may be making the same mistake today about Gülen, who professes to want to weld Islam with tolerance and a pro-European outlook. Rubin introduces us to a man who could play a prominent role in Turkey's future at a time when Turkey's "secular order and constitutionalism have never been so shaky."
  • Topic: Foreign Policy, Democratization
  • Political Geography: United States, Europe, Turkey, Middle East
  • Author: N. Gregory Mankiw
  • Publication Date: 04-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Income inequality is rising, and in this article, AEI visiting scholar N. Gregory Mankiw looks at the statistical evidence and causes. Government policy, he says, is unlikely to be the culprit because inequality has risen in Democratic and Republican administrations--we need to look instead at skills-based technological change and educational attainment. Education, Mankiw says, is key to understanding the broader trends, but it cannot fully explain the incomes of the super-rich.
  • Topic: Economics, Education
  • Political Geography: United States
  • Author: John R. Bolton
  • Publication Date: 04-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: On April 14, 2008, AEI senior fellow John R. Bolton gave the keynote address at the inauguration of the Global Governance Watch (GGW), a joint project of AEI and the Federalist Society. GGW is a web-based resource that addresses issues of transparency and accountability in the United Nations (UN), NGOs, and related international organizations. Edited excerpts from Bolton's remarks follow.
  • Topic: International Relations, International Law, International Organization, United Nations
  • Political Geography: United States
  • Author: Norman J. Ornstein
  • Publication Date: 04-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: AEI's election watcher Norman J. Ornstein follows the fortunes of the presidential and congressional candidates, commenting daily on campaign strategies and policies. But he also writes and speaks regularly about an issue that many members of Congress have chosen to ignore: the possibility of disruption of our election process through a terrorist attack or a natural disaster. Ornstein believes the United States is wholly unprepared for any such scenario, and he has urged Congress to focus its attention on the potential problems. Muddling through has worked thus far, he notes in this article, but it is "flat-out irresponsible" to continue to pay so little attention to the issue.
  • Topic: Politics, Terrorism
  • Political Geography: United States
  • Author: Scott Gottlieb
  • Publication Date: 05-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: In this article, AEI resident fellow Scott Gottlieb, M.D., describes how information about a new use of the breast cancer drug Herceptin was slow in reaching oncologists. The Food and Drug Administration (FDA) delayed approving the new indication for almost two years, and during that period, the drug's sponsor could not distribute its findings about the new use. Proposed FDA guidelines on dissemination of information on unapproved uses of medical products, Gottlieb says, will establish a more appropriate standard for what kind of information should be shared.
  • Topic: Government, Human Welfare
  • Political Geography: United States
  • Author: Danielle Pletka, John R. Bolton
  • Publication Date: 05-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: In these two articles, AEI's Danielle Pletka and John R. Bolton bring us up to date and discuss the larger implications of developments since Kim Jong Il pledged to give up his nuclear ambitions in exchange for diplomatic recognition and foreign aid. Pletka reminds readers that since North Korea signed the 1994 accord, it has detonated a nuclear weapon, exported a reactor to Syria, aided Libya's incipient (and since dismantled) nuclear program, aided Hezbollah, provided sophisticated missiles to Iran, masterminded the counterfeiting of U.S. dollar bills, laundered development aid, and allowed hundreds of thousands of its citizens to starve. Yet the Bush administration "appears intent on the rehabilitation of North Korea and a broad lifting of sanctions," she says. Bolton argues that North Korea's proliferation is "quite likely more than a series of one-time transactions." The underlying reality of the North's activities, he says, "will haunt Bush's successor and threaten international peace."
  • Topic: Foreign Policy, Nuclear Weapons
  • Political Geography: United States, North Korea
  • Author: Joseph Antos, Mark V. Pauly
  • Publication Date: 05-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Medicare is in perilous financial shape. The number of seniors receiving benefits will double over the next two decades as baby boomers head to retirement, and each new beneficiary will spend substantially more health care dollars, on average, than today's seniors. Unless we can get costs under control, Medicare will need an additional $36 trillion to stay in business over the next seventy-five years.
  • Topic: Political Economy, Politics
  • Political Geography: United States
  • Author: Kevin A. Hassett, Scott Ganz
  • Publication Date: 05-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: When pundits discuss the influence of sports on American culture, they often emphasize the negatives: Michael Vick and dog fighting, the steroids scandals in baseball, lewd fan behavior in football, or doping incidents in cycling and track. But below the radar of popular athletic culture is something that has profoundly shaped the lives of millions of Americans for the better: youth sports. A growing body of research is showing the social and economic benefits of participation in youth sports to be surprisingly large and overwhelmingly positive. Other things being equal, if a kid plays sports, he will earn more money, stay in school longer, and be more engaged in civic life.
  • Topic: Demographics, Education
  • Political Geography: United States
  • Author: Claude Barfield
  • Publication Date: 05-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: While the waning months of an administration is normally not a time for new foreign policy initiatives, President Bush should break precedent and begin formal negotiations with Taiwan for an FTA. Such a move would send a powerful signal to our allies in East Asia that America—despite great sympathy for the humanitarian efforts of the authoritarian Chinese government after the earthquake and thus far foregoing intervention against the military thugs in Burma—still stands by its determination to foster and support democratic regimes in the region.
  • Topic: Diplomacy, Treaties and Agreements
  • Political Geography: United States, China, Taiwan, Asia, Burma
  • Author: Vincent R. Reinhart
  • Publication Date: 05-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The Senate Banking Committee approved legislation on May 20 that would empower the Federal Housing Administration to provide relief to mortgage borrowers teetering on the brink of default. The House has already passed similar legislation. Only two months ago, mortgage aid was viewed as unlikely, but the odds now favor it becoming law. For this change of fortune, the legislation's chief sponsors, Senator Chris Dodd (D-Conn.) and Representative Barney Frank (D-Mass.), should thank one person in particular: Federal Reserve chairman Ben Bernanke.
  • Topic: Economics, Government
  • Political Geography: United States
  • Author: Lawrence B. Lindsey
  • Publication Date: 06-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: America has not had a nationwide housing crash since the 1930s. At one point during that calamity, an estimated 60 percent of all mortgages were in technical default. The rather primitive housing credit system of the time, which relied on five-year balloon mortgages, certainly exacerbated the problem, but the bulk of the problem was related to the general economic downturn. There have been some regional housing crashes that were short and relatively mild, most notably in California, Texas, and New England in the late 1980s and early1990s. Most of those were caused by declines in key local industries: oil in Texas, aerospace and defense in Southern California and Massachusett.
  • Topic: Economics, Markets
  • Political Geography: United States, California, England
  • Author: John E. Calfee, Paul H. Rubin
  • Publication Date: 06-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Senator Kennedy is expected to recover from his brain tumor surgery without any serious side effects, thankfully. And while the spotlight is on his recovery, the news of his malignant brain tumor should also shed some light on drug approval policies.
  • Topic: Government, Health
  • Political Geography: United States
  • Author: Frederick W. Kagan
  • Publication Date: 06-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: More than five years after the war on terror began, the strains it has placed on the U.S. military are beginning to show. Some observers have noticed increasing signs of tension between the Pentagon and our commanders in the field. Inter service rivalries have started to kick up again as the U.S. Marines talk about getting back to their boats; the U.S. Navy talks about recapitalizing parts of its fleet; and the U.S. Air Force takes up the case of the F-22, the Joint Strike Fighter, and so on, with reference to more-or-less distant threat.
  • Topic: Defense Policy, War
  • Political Geography: United States
  • Author: Thomas P. Miller
  • Publication Date: 06-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The periodic ritual of announcing the mounting size of the fiscal problem posed by Medicare has never been, and will never be, enough to generate productive reform. Most of us got the memo that we are overcommitted and underfunded. Merely pointing to the size of the problem—in terms of Medicare's massive unfunded long-term liabilities, near-term budget imbalances, future rates of taxation that will be needed to sustain the program, or Medicare's preemption of national resources that crowds out funding for other important public pro-grams and private activities—has had little effect.
  • Topic: Government, Health
  • Political Geography: United States
  • Author: Frederick M. Hess, Kevin Carey
  • Publication Date: 06-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: What if, instead of borrowing, students could arrange for investors to pay their college bills in exchange for a fixed percentage of their future income? In this article, Kevin Carey and AEI's Frederick M. Hess answer this provocative question. The time has come, they say, to think more creatively about financing college, especially because Congress seems more inclined to pour more money into loans and grants.
  • Topic: Economics, Education
  • Author: Samuel Thernstrom
  • Publication Date: 06-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: In this article, Samuel Thernstrom, codirector of AEI's geoengineering project, notes that policymakers generally discuss two different ways to address global warming: cutting emissions and adaptation—that is, learning to live with a warmer planet. But there is another way to cool the planet, he says, "that could be fast, effective, and affordable." This strategy is geoengineering, and in this article, Thernstrom explains how it would work and why it is being ignored. In the race to respond to climate change, he says, it is time to invest in this alternative solution.
  • Topic: Energy Policy, Environment, Government
  • Author: Lawrence B. Lindsey
  • Publication Date: 06-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Two AEI scholars have recently assessed the merits of Senator Barack Obama's approach to fixing the Social Security system's problems. In a March On the Issues, Andrew G. Biggs argued that the senator's plan would not fix the system's long-term problems and would impose significant costs on the economy as a whole. To read Biggs's article, visit www.aei.org/publication27704/. In June, Lawrence B. Lindsey wrote that requiring higher-end workers to pay additional taxes without getting additional benefits linked to their extra contributions would be “a big step toward turning Social Security from a contributory pension scheme into just another welfare program.” Below, Lindsey spells out the details.
  • Topic: Economics, Political Economy, Politics
  • Political Geography: United States
  • Author: John H. Makin
  • Publication Date: 01-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The good news about the problems in the financial sector and the larger economy in the United States emanating from the persistent drop in house prices is that they will eventually end, and the underlying resiliency of the U.S. economy will reemerge. The bad news about these problems is that they are going to continue for some time and get worse before they improve. Efforts to address them so far have been ineffective because they have been aimed at containing a subprime credit crisis, not at containing a rapidly spreading primecredit, solvency crisis that is leading the U.S. economy into recession.
  • Topic: Economics, International Trade and Finance, Markets
  • Political Geography: United States
  • Author: Michael Rubin
  • Publication Date: 01-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The State Department is counseling Turkey to make political concessions to the Kurdistan Workers' Party, the terrorist organization that launched an attack in Turkey in October. Michael Rubin argues that this would be a mistake and urges the United States to stand by its long-time NATO ally in its fight against terrorism.
  • Topic: Foreign Policy, Terrorism
  • Political Geography: United States, Turkey, Middle East
  • Author: Douglas Besharov
  • Publication Date: 01-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Finding that an op-ed by Michael Gerson poorly defined the conservative approach to social problems, Douglas J. Besharov outlined six principles that underlie the conservative position on government social programs. Besharov notes that being cautious about the possible ill effects of government intervention is not unique to conservatives. It is simply realistic to be skeptical about the federal government's ability to mitigate serious social welfare problems.
  • Topic: Human Welfare, Political Economy, Politics
  • Political Geography: United States
  • Author: Amity Shlaes
  • Publication Date: 01-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Democratic presidential candidates are invoking the New Deal as a model for addressing infrastructure, economic, and employment problems in the United States. But a careful look at New Deal spending suggests, in the words of Amity Shlaes, “not how much the public works achieved . . . [but] how little.” Advocates for new federal government spending on highways, buildings, and roads should carefully weigh the need against the damage that comes from projects and jobs created for political reasons.
  • Topic: Economics, Human Welfare, Political Economy
  • Political Geography: United States
  • Author: John H. Makin
  • Publication Date: 08-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The annual report of the Bank of International Settlements (BIS)—the central bankers' central bank—which appeared in late June, was somewhat schizophrenic. On the one hand, the BIS called for world interest rates to rise in order to deal with a “clear and present threat” from global inflation while, on the other hand, it warned that the global economy may be close to a “tipping point” into a “slowdown severe enough to transform the current period of rising inflation into a period of falling prices.” The simultaneous rise in oil prices and the fall in yields in government securities occurring as the BIS released this ambivalent statement captured well the tensions inherent in the stagflationary crosscurrents facing the global economy. Against this ominous background, the release of the BIS report coincided with the onset of a global bear market in equities.
  • Topic: Economics, Markets, Oil, Political Economy
  • Political Geography: United States
  • Author: John H. Makin
  • Publication Date: 09-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Speaking on August 22 at the Federal Reserve Bank of Kansas City's Annual Economic Symposium in Jackson Hole, Wyoming, Federal Reserve chairman Ben Bernanke entitled his important address “Reducing Systemic Risk.” Bernanke outlined three key elements of the Fed's response to what he described as “one of the most challenging economic and policy environments in memory.” First, the Fed has eased monetary policy, cutting the federal funds rate from 5.25 percent to 2 percent. Second, the Fed has expanded its liquidity support by developing new special lending facilities to mitigate “very severe strains in short-term funding markets.” The third and, as yet, unfinished element of the Fed's strategy involves “a range of activities and initiatives undertaken in our [the Fed's] role as financial regulator and supervisor.”
  • Topic: Economics, International Trade and Finance, Markets, Political Economy
93. Panic
  • Author: John H. Makin
  • Publication Date: 09-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The credit crisis that followed the collapse of the housing bubble turned into a financial panic on Wednesday, September 17, 2008. There was a run by households out of money-market funds and into safe Treasury bills, pushing their yields to zero for the first time since the Great Depression. There was a liquidity trap in the interbank market, in which banks that are supposed to lend to each other hoarded cash for fear of runs by their depositors and the insolvency of other banks. Financial markets simply froze in the midst of chaos.
  • Topic: Economics, Markets, Political Economy
  • Political Geography: Middle East
  • Author: John H. Makin
  • Publication Date: 10-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Over the past several months as central banks and treasuries have struggled to manage a financial panic and avoid or diminish its soon-to-appear devastating impact on the global economy, I have often thought about the efforts of two great economists to understand the lessons of the Great Depression. John Maynard Keynes's monumental General Theory of Employment, Interest and Money, published in 1936, showed how a failure to understand the nature of the demand for money contributed to the Great Depression. “The importance of money essentially flows from being a link between the present and the future,” Keynes said.
  • Topic: Economics, Markets, Political Economy
  • Political Geography: United States
  • Author: John H. Makin
  • Publication Date: 12-2008
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: President-elect Barack Obama faces the most difficult economic challenge confronting an incoming American president since the election of Franklin Delano Roosevelt seventy-six years ago in 1932. When he assumes office on January 20, Obama will need to act decisively with heretofore unprecedented fiscal policy steps, in conjunction with measures by the Federal Reserve to increase the money supply and lower long-term interest rates. All of this must be done to help contain and reverse the accelerating global slowdown by halting the rapidly deepening American recession. We can only hope that other national leaders and central banks will follow suit.
  • Topic: Economics, Markets, Political Economy
  • Political Geography: United States, America
  • Author: Roger F. Noriega
  • Publication Date: 11-2007
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: U.S. policy in Latin America and the Caribbean always seems to inspire criticism: Too much, too little, too late. Back off. Get in the game. Don't just stand there, do something. Don't do something, just stand there. Our geographic closeness has meant a rich, natural partnership, but this proximity easily stirs concerns over sovereignty. When the United States is preoccupied with events in other parts of the world, regional pundits accuse Washington of indifference. If we speak clearly on the issues in Latin America, we are excoriated for poking our nose “where it doesn't belong.” So where does this leave U.S. foreign policy in the region? It could be that what we do may not be as important as how we do it. The first step in developing a new paradigm for engaging the Americas is using the 2008 election cycle here at home to develop a serious domestic constituency for our policy. Then we should shape that policy through a conscientious dialogue with stakeholders in the region.
  • Topic: Foreign Policy, Emerging Markets
  • Political Geography: United States, South America, Latin America, Central America
  • Author: Leon Aron
  • Publication Date: 08-2007
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: It is very much in the Russian and, even more so, Soviet political tradition for rulers to deprecate their predecessors. As they climb up the power ladder, the would-be Kremlin occupants must profess complete loyalty to the current leader in order to succeed. Once in power, the country's new masters bolster their authority by dissociating themselves from previous leaders. Along with the weakness of the country's political institutions, which undermines the legitimacy of the transitions, such repudiations almost inevitably result in the personalization of power, as the new occupants mold the political, social, and economic systems to their liking. Hence, Russian and—again and especially—Soviet history have often looked like a succession of very distinct personal political regimes—indeed, sometimes different states under the same name.
  • Topic: Civil Society, Cold War, Democratization, Politics
  • Political Geography: Russia, Europe, Asia, Soviet Union
  • Author: Leon Aron
  • Publication Date: 09-2007
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Part I of this Russian Outlook dealt with what might be called the errors of commission, or false attribution, in the "chaos-of-the-1990s" stereotype, which became a major theme of the Putin Kremlin's propaganda. The economic crisis of that era, mostly inherited from the decaying Soviet economy, was laid at the revolutionary regime's door. Yet the "chaos" legend also contains errors of omission, for, on closer inspection, there was a great deal in the 1990s besides the alleged "chaos."
  • Topic: Civil Society, Democratization, Government, Politics, Privatization
  • Political Geography: Russia, Eastern Europe, Asia, Soviet Union
  • Author: Roger Noriega
  • Publication Date: 08-2007
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Most of the fiercest opponents of the comprehensive immigration reform legislation saw no higher priority than securing our borders. With that divisive bill shelved for the foreseeable future, controlling our frontiers remains an urgent challenge. As we focus our attention on that task, many will be surprised to discover that our neighbor to the south is in the fight of its life. Unless we provide Mexico with the substantial help it needs and wants to battle the deadly drug syndicates that terrorize that nation, we may soon find our southern border more porous, dangerous, and unmanageable than ever.
  • Topic: Political Economy, Regional Cooperation, War on Drugs
  • Political Geography: Latin America, Mexico
  • Author: Roger Noriega
  • Publication Date: 08-2007
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: U.S. policy in Latin America and the Caribbean always seems to inspire criticism: Too much, too little, too late. Back off. Get in the game. Don't just stand there, do something. Don't do something, just stand there. Our geographic closeness has meant a rich, natural partnership, but this proximity easily stirs concerns over sovereignty. When the United States is preoccupied with events in other parts of the world, regional pundits accuse Washington of indifference. If we speak clearly on the issues in Latin America, we are excoriated for poking our nose “where it doesn't belong.” So where does this leave U.S. foreign policy in the region? It could be that what we do may not be as important as how we do it. The first step in developing a new paradigm for engaging the Americas is using the 2008 election cycle here at home to develop a serious domestic constituency for our policy. Then we should shape that policy through a conscientious dialogue with stakeholders in the region.
  • Topic: International Trade and Finance, Political Economy, Regional Cooperation
  • Political Geography: United States, America, Washington, Moscow, Latin America