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  • Author: Frederick M. Hess
  • Publication Date: 03-2015
  • Content Type: Video
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: How have views toward sex education changed over time, and how does sex education around the world compare to that in the United States? On Thursday, AEI hosted a conversation with New York University professor Jonathan Zimmerman on his new book, “Too Hot to Handle: A Global History of Sex Education,” which addresses the differences in sex education across countries and throughout history, finding that as countries become more democratic, sex education becomes increasingly contentious. Zimmerman recalled how the United States was originally a pioneer in sex education, which originally tended to emphasize the dangers of sexual activity. In the 1970s and 1980s, members of the international community began to focus on sex education as a way to help liberate individuals from societal norms, leaving them free to make their own choices. He pointed out that the developing world, however, did not embrace this notion of individual autonomy being granted to teenagers, and so those countries' version of sex education came to look quite different. As immigration increased closer to the present day, then, this created strange bedfellows in many Western countries as white conservatives and immigrants joined forces against sex education. Zimmerman closed by describing how schools are necessarily limited in their efficacy on this particular subject, both because it is intensely personal and because the mass media plays such a strong informative role on the topic. Consequently, he suggested that the discussion of sex education likely ought to be expanded into environments outside the school.
  • Topic: Education, Environment, Immigration
  • Political Geography: United States
  • Author: Katherine Zimmerman
  • Publication Date: 02-2014
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Yemen is at a pivotal moment today, three years after the outbreak of popular protests, and the future of America's strategy against al Qaeda in the Arabian Peninsula (AQAP) is on the line. Yemen is in the midst of a political transition process that will eventually reform and decentralize the government. But the success of the effort is by no means assured. The reforms will not, in any case, address the deteriorating socioeconomic conditions that provide fertile ground for al Qaeda. Moreover, the central state, never fully able to exercise its sovereignty throughout the country, is weaker than it was before 2011. Opposition groups, which have turned to violence in the past, may still seek to form independent states of their own, potentially collapsing the fragile Yemeni state structure entirely. American interests are bound up in this process by the fact that AQAP is among the most virulent al Qaeda affiliates that poses a direct threat to the U.S. homeland. Syria, Iran, and other foreign and domestic policy issues are distracting the United States and its regional partners from sustained engagement in Yemen. Without international support, the country is much less likely to ride this transition process smoothly and our security interests will be severely harmed.
  • Topic: Islam, Terrorism, Armed Struggle, Insurgency, Governance
  • Political Geography: United States, Middle East, Yemen, Arabia
  • Author: Michael Rubin, Ahmad Khalid Majidyar
  • Publication Date: 07-2014
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Shi'ism has a public relations problem, at least, in the United States. Most Americans formed their perception of Shi'ism not by reading its rich internal debates or exploring its diversity and cultural heritage, but rather by seeing Ayatollah Ruhollah Khomeini lead chants of "Death to America" after the 1979 Iranian revolution and Iranian hostage takers scaling embassy walls and then parading blindfolded, abused diplomats on television. Less than four years later, Shi'ite operatives in Lebanon rammed a truck bomb into the headquarters of US Marines serving as peacekeepers in Beirut, killing 241 in an incident that propelled suicide terrorism to the forefront of the American conscience.
  • Political Geography: United States, America, Middle East
  • Author: Mary Habeck
  • Publication Date: 04-2014
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Current national security policy is failing to stop the advancement of al Qaeda and its affiliates throughout the Muslim-majority world. While there are many reasons for this failure, three key issues stand out: a poor definition of the enemy, an incorrect view of its objectives, and the adoption of a strategy that will not defeat the latest evolution of this adaptive organization. If the US understood al Qaeda as it is: the leadership and field army of an insurgency with worldwide linkages that hopes to impose its extremist version of shari'a , govern territory, and overthrow the leaders of every Muslim- majority country, the current national strategy for combating al Qaeda would not be confined to counter - terrorism and attrition, but would instead make counterinsurgency-without large numbers of American ground forces-its main technique for confronting and defeating the organization.
  • Topic: Defense Policy, Islam, Terrorism, Military Strategy, Counterinsurgency
  • Political Geography: United States, America
  • Author: Leon Aron
  • Publication Date: 05-2014
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Vladimir Putin is exploiting the Ukrainian revolution-specifically, by manufacturing "crises" in Crimea and eastern Ukraine and nationalist euphoria and anti-Western paranoia at home-to fashion a more repressive and increasingly unpredictable Russian dictatorship for life. With the Russian economy heading for recession, the Putin regime's popularity largely depends on Russia's foreign policy successes, which Putin hopes to achieve by humiliating, destabilizing, and eventually derailing Ukraine; by cajoling the West into rejecting sanctions against Russia; and by fueling Russian patriotism. The West should, in an effort spearheaded by the United States, aim its sanctions at increasing the costs of the regime's malignant transformation rather than simply attempting to dissuade Moscow from further action in eastern Ukraine.
  • Topic: International Law, Sovereignty, Territorial Disputes, Governance
  • Political Geography: Russia, United States, Ukraine
  • Author: Derek M. Scissors
  • Publication Date: 07-2014
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Chinese foreign investment declined through mid-2014 for the first time since the financial crisis. By sector, energy draws the most investment, but a slump in energy spending means that metals and real estate have been more prominent so far in 2014. The United States has received the most Chinese investment since 2005, followed by Australia, Canada, and Brazil. China invests first in large, resource-rich nations but has also diversified by spending more than $200 billion elsewhere. Chinese investment benefits both China and the recipient nation, but host countries must consider thorny issues like Chinese cyberespionage and subsidies.
  • Topic: Economics, Human Rights, International Trade and Finance, Terrorism, Foreign Direct Investment
  • Political Geography: United States, China, Canada, Asia, Brazil, Australia
  • Author: J. Bruce Jacobs
  • Publication Date: 06-2014
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: China has recently attempted to use military force to back up alleged historical claims to the South China Sea and East China Sea; however, upon closer examination, the claims do not hold up. China's belligerent attempts to enforce its claims in the South and East China Seas endanger peace in Asia. China appears unlikely to accept any reasonable proposals that respect history and geography. Southeast Asian nations and other interested countries, like the United States and Australia, must maintain a military presence to deter Chinese aggression while attempting to negotiate a peaceful settlement with China.
  • Topic: International Law, Sovereignty, History, Territorial Disputes, Governance
  • Political Geography: United States, China, Asia, Australia, East China, South China
  • 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: 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: Jon Kyl, Jim Talent
  • Publication Date: 10-2013
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: When President Obama took office, the armed services of the United States had already reached a fragile state. The Navy had shrunk to its smallest size since before World War I; the Air Force was smaller, and its aircraft older, than at any time since the inception of the service. The Army was stressed by years of war; according to Secretary of Defense Robert Gates, it had been underfunded before the invasion of Iraq and was desperately in need of resources to replace its capital inventory.
  • Topic: Defense Policy, Economics, Politics, War
  • Political Geography: United States, Iraq
  • Author: John L. Kokulis
  • Publication Date: 10-2013
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The rise in military health care spending has been a primary driver of the large growth in military personnel compensation over the past decade. Left unchecked, these costs will impact the ability of the DoD's Military Health System (MHS) to support its three critical missions: 1. Readiness for deployment: Maintaining an agile, fully deployable medical force and a health care delivery system so they are capable of providing state-of-the-art health services anytime, anywhere; 2. Readiness of the fighting force: Helping commanders create and sustain the most healthy and medically prepared fighting forces anywhere; and 3. The benefits mission: Providing long-term health coaching and health care for 9.7 million DoD beneficiaries.
  • Topic: Defense Policy, Economics, Health, Governance
  • Political Geography: United States
  • Author: Aparna Mathur, Sadanand Dhume, Julissa Milligan, Hemal Shah
  • Publication Date: 10-2013
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Two decades after the end of the Cold War, US–India relations stand at a crossroads. Not so long ago, many in Washington viewed the signing of the historic US–India civil nuclear deal as the advent of a dynamic partnership with the potential to transform Asia and the world. Today US–India ties are just as often characterized as unrealistic or oversold.
  • Topic: Democratization, Development, Diplomacy, Emerging Markets, International Trade and Finance, Treaties and Agreements, Bilateral Relations
  • Political Geography: United States, South Asia, Washington, India
  • 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: 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: Charlie Szrom, Chris Harnisch
  • Publication Date: 03-2011
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The environment in which an al Qaeda affiliate operates is one of the most important factors in assessing the threat it poses to US interests. Defeating the militant Islamist network led by al Qaeda requires a nuanced strategy that supports the appropriate combination and prioritization of policies and approaches for each environment in which an al Qaeda affiliate or franchise operates. The US government has not articulated such a strategy, a deficiency that acquires urgency because terrorist groups based abroad have been linked to three attacks against the American homeland in the past year. Building a strategy to oppose the al Qaeda network requires detailed understanding of its different operating environments, the ties between its various parts, and how territory affects its vitality. A comprehensive strategy should deny the al Qaeda network access to operating environments from which it can pose a major threat to the United States and the West.
  • Topic: Defense Policy, Islam, Terrorism, Armed Struggle, Counterinsurgency
  • Political Geography: United States, America
  • 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
  • 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: James W. Ceaser
  • Publication Date: 01-2010
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: What in the writings of Alexis de Tocqueville could conceivably be thought to offer any guidance for the study of contemporary China? Tocqueville was born early in the nineteenth century (1805) at a time when China lay in near total isolation from Europe. Matters changed during Tocqueville's lifetime with the so-called Opium War (1839–41), in which China suffered a humiliating defeat at the hands of Great Britain. This reversal helped set in motion a series of events that led to the destabilization of the Manchu (or Qing) dynasty, which eventually fell in 1911. Tocqueville commented in his personal notes on a few of the early occurrences in this sequence, but he never undertook an extensive analysis of developments in the Far East. His focus in his published works was on the West, or what he often called “the Christian world.”
  • Topic: Foreign Policy, Markets, Religion
  • Political Geography: Britain, United States, China, Europe
  • Author: Neena Shenai
  • Publication Date: 02-2010
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: This paper proposes reforms to the legal framework of the U.S. export control system. By examining the existing legal structure of dual-use and defense trade controls and its shortcomings, the paper considers how other U.S. legal regimes could provide models for ongoing reform efforts being undertaken by the Obama Administration and Congress. The paper proposes certain reforms, including the institution of added administrative safeguards and limited judicial review, to improve the current system.
  • Topic: Foreign Policy, International Trade and Finance, Political Economy
  • Political Geography: United States
  • Author: Thomas Donnelly, Tim Sullivan
  • Publication Date: 02-2010
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The 2010 Quadrennial Defense Review Report (QDR) and the Fiscal Year 2011 defense budget proposal reveal a critical contradiction at the heart of the Obama Administration's national security policy. As the second sentence of the QDR states, "first and foremost, the United States is a nation at war." But the remainder of the report and, more importantly, the long-term budget, reflect an administration more interested in ending wars than winning them, and prepared to defer the modernization of the military resources necessary to maintain American leadership in the face of emerging threats. AEI's Center for Defense Studies (CDS) has developed a presentation, narrated by CDS director Tom Donnelly, assessing the key shortfalls of the QDR and the administration's defense budget proposal.
  • Topic: Political Economy, Politics, War
  • Political Geography: United States
  • Author: Michael Auslin
  • Publication Date: 12-2010
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Ensuring security in the Indo-Pacific region will be the primary foreign policy challenge for the United States and liberal nations over the next generation. Doing so successfully will provide the greatest economic and political opportunities for the next quarter century. Conversely, a failure to maintain stability, support liberal regimes, create cooperative regional relations, and uphold norms and standards of international behavior will lead to a region, and world, of greater uncertainty, insecurity, and instability. Due to its economic strength, military power, and political dynamism, the Indo-Pacific will be the world's most important region in coming decades, and its significance will be felt throughout the globe. Since the end of World War II, it has transformed itself into the world's economic powerhouse, yet has also witnessed a struggle between tides of liberalism, authoritarianism, and even totalitarianism. It remains riven by distrust, territorial disputes, ethnic tensions, and painful historical memories. The Indo-Pacific's unique geography makes the balance of regional security most vulnerable in its "commons": the open seas, air lanes, and cyber networks that link the region together and to the world.
  • Topic: Security, Development, Emerging Markets, Governance
  • Political Geography: United States, China, India, Australia/Pacific
  • Author: Tim Sullivan
  • Publication Date: 11-2010
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: As home to a number of the world's most dynamic economies, two rising powers, and six nuclear states, Asia is a region of enormous strategic importance to the United States. For over six decades, America has functioned as the preeminent power in Asia, playing a vital role in providing security and ensuring a stable balance of power that has allowed the region's states to flourish politically and economically. The U.S. security framework in the region has rested historically upon a series of bilateral alliances and strategic partnerships. The arrangement has impressively stood the test of time despite concerns that the lack of an overarching, multilateral security architecture would lead to inefficiencies in the United States' pursuit of regional stability.
  • Topic: Defense Policy, Arms Control and Proliferation, Emerging Markets, Nuclear Weapons
  • Political Geography: United States, Asia
  • 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: Kevin A. Hassett
  • Publication Date: 03-2009
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: This paper reviews the empirical literature on countercyclical policy. It finds that three types of countercyclical policies have been studied in the literature: built in stabilizers, temporary policy changes, and more permanent policy changes. The literature is decidedly mixed on the effectiveness of temporary changes, but more hopeful concerning the other two.
  • Topic: Debt, Economics, Markets, Political Economy
  • Political Geography: United States
  • Author: Martin S. Feldstein
  • Publication Date: 08-2009
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: This paper comments on the experience of the U.S. economy in the 1930s, its lessons for managing the current economic downturn, and the relation of U.S. economic conditions to our future national security. Some of the conclusions are: (1) Although the current recession will be long and very damaging, it is not likely to deteriorate into conditions similar to the Depression of the 1930s. Policy makers now understand better than they did in the 1930s what needs to be done and what needs to be avoided. (2) The focus on domestic economic policies in the 1930s and the desire to remain militarily neutral delayed the major military buildup that eventually achieved the economic recovery. (3) A well-functioning system of bank lending is necessary for economic expansion. We have yet to achieve that in the current situation. (4) Raising taxes, even future taxes, can depress economic activity. The administration's budget proposes to raise tax rates on higher income individuals, on dividends and capital gains, on corporate profits and on all consumers through the cap and trade system of implicit CO2 taxes. (5) Inappropriate trade policies and domestic policies that affect the exchange rate can hurt our allies, leading to conflicts that spill over from economics to impair national security cooperation. Reducing long-term U.S. fiscal deficits would reduce the risk of inflation and thereby reduce the fear among foreign investors that their dollar investments will lose their purchasing power. (6) The possibilities for domestic terrorism and of cyber attacks creates risks that did not exist in the 1930s or even in more recent decades. The scale and funding of the FBI and the Department of Homeland Security is not consistent with these new risks.
  • Topic: Economics, International Trade and Finance, Terrorism, Financial Crisis
  • Political Geography: United States
  • Author: Philip I. Levy
  • Publication Date: 10-2009
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Bilateral free trade agreements have generally been analyzed as instances of preferential reciprocal tariff liberalization. Viewed through this lens, such agreements raise concerns both about new competition and about trade diversion. The United States-Peru Trade Promotion Agreement, an example of a serious North-South accord, demonstrates that new market access was not a principal Peruvian goal in the trade negotiations. Instead, the agreement was intended to encourage investment by locking in Peru's economic reforms. This motivation has very different implications for the global trading system than a quest for preferential access.
  • Topic: International Trade and Finance, Markets, Treaties and Agreements
  • Political Geography: United States, Latin America, Peru
  • 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: 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
  • 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: 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: Aparna Mathur, Kevin A. Hassett, Gilbert E. Metcalf
  • Publication Date: 01-2008
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: This paper measures the direct and indirect incidence of a carbon tax using current income and two measures of lifetime income to rank households. Our results suggest that carbon taxes are more regressive when annual income is used as a measure of economic welfare than when proxies for lifetime income are used.
  • Topic: Economics, Environment, Markets
  • Political Geography: United States
  • Author: Anthony T. Lo Sasso
  • Publication Date: 01-2008
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The present upswing in state-level efforts to "do something about health care," combined with presidential campaign-related rhetoric, suggests that health care is back with a vengeance on the public consciousness. Many states are proposing what appear to be new strategies to cover the uninsured when in reality the "new" strategies rely on old approaches that have not proven highly effective in the past, notably community rating and guaranteed issue regulations. Using data culled from a popular health insurance distributor and the published literature provides a compelling portrait of the predictable distortions that can result from regulations aimed at improving perceived deficiencies in the non-group and small group health insurance markets.
  • Topic: Economics, Government, Health, Politics
  • 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
  • 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: 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: 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: 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: 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: Aparna Mathur, Kevin A. Hassett
  • Publication Date: 01-2007
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Every year the Census Bureau reports data on income inequality and poverty, based on income estimates derived from the Current Population Survey. Our analysis suggests that the data may not be presenting an accurate picture. By under-reporting incomes, leaving out certain sources of income, and not making equivalence adjustments that are now standard among researchers, the reports present an imperfect picture of overall welfare. We develop an alternative that relies on data from the National Income and Product Accounts. Our data reveal that real median incomes have been increasing in the recent period, albeit at a slower rate than the long-term average. Using the same methodology for consumption, we find that consumption for all income groups, including the middle, has been growing robustly in recent times. This is in contrast to statistics reported by the Consumer Expenditure Survey, the most often cited data for all consumption analysis, which show middle class consumption declining.
  • Topic: Development, Economics, Human Welfare
  • Political Geography: United States
  • 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: 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
  • Author: Roger Noriega
  • Publication Date: 06-2007
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Not long ago, the governments of the Americas recognized the value of working together to consolidate the historic, promising trend toward democracy. Now, with democracy being dismantled in several nations and being assailed by authoritarian Venezuelan president Hugo Chávez Frías, Latin American countries seem to have abandoned the fraternal ideal of inter-American solidarity. The United States and the Organization of American States (OAS) can both do more to salvage the regional commitment to democracy, but unless Latin American and Caribbean governments are willing to stand together to defend their principles, the end of democratic solidarity is in sight.
  • Topic: Democratization, Political Economy, Politics
  • Political Geography: United States, America, Latin America, Caribbean, Venezuela
  • Author: Roger F. Noriega, Megan Davy
  • Publication Date: 04-2007
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The thorny issue of immigration may yet prove to be a winner for President George W. Bush, but he has to gamble that leaders from both parties are more interested in solving this problem than in saving the debate for the 2008 campaign. The Bush administration can be faulted for failing to put more security resources at our borders after the terrorist attacks of September 11 and for not advancing the president's comprehensive immigration reform before the debate was dominated by shrill voices. President Bush's approach on immigration, however, remains a sound one, and his declarations during his March visit to Mexico indicate a dogged desire to tackle this issue. A Democratic Congress may find that it needs to demonstrate its ability to find practical, bipartisan solutions to even the toughest of problems.
  • Topic: International Relations, Migration
  • Political Geography: United States, Central America, Mexico
  • Author: John H. Makin
  • Publication Date: 12-2007
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: It is important at the outset to define the terms “financial firms” and “too much risk.” By “financial firms,” I mean commercial banks, investment banks, brokerages, and insurance companies that solicit and manage funds for the public. By “too much risk,” I mean actions undertaken by managers of financial firms that result in substantial losses for the shareholders (owners) of such firms. On an aggregate level, I call “systemic risks” those that emerge when regulators and policymakers are forced to choose between either reinforcing (with bailouts) the venturesome investing that created the problem or allowing substantial damage to depositors and shareholders in financial firms, and possibly to the economy as a whole.
  • Topic: Economics, International Trade and Finance, Markets
  • Political Geography: United States
  • Author: John H. Makin
  • Publication Date: 11-2007
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Just as Wall Street was celebrating the presumed end of the latest financial crisis by pushing stocks to record highs, proclaiming continued strong earnings growth, and continuing to recite the mantra “slowdown, but no recession,” Treasury Secretary Henry Paulson provided a vivid reminder that the housing and mortgage crisis is not over. On Monday, October 15, while Citibank was reporting that compared with last year's results its third-quarter earnings had fallen by 57 percent, the Treasury's “super-SIV” plan was revealed. It seems that the Goldman Sachs alumni at Treasury—Paulson and his under secretary for domestic finance, Robert Steel—had become concerned that the offbalance- sheet special investment vehicles (SIVs) held by commercial banks might not be financeable. That would mean that not enough investors could be found to provide the short-term financing necessary to sustain SIVs, the repositories of hardto- value securitized mortgages that continue to plague bank balance sheets.
  • Topic: Economics, International Trade and Finance, Markets
  • Political Geography: United States
  • Author: John H. Makin
  • Publication Date: 10-2007
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: The global economic and financial picture is changing rapidly. A review of some of the key elements is in order, as the U.S. economy has slowed rapidly and the Federal Reserve has responded aggressively with rate cuts, while the Bank of England's tough policies pushed one of the United Kingdom's largest mortgage lenders, Northern Rock, to the brink of collapse as a bank run on that suddenly beleaguered institution ensued. Meanwhile, Japan, still the world's second-largest economy—though perhaps the least dynamic of the major ones—slipped into negative growth at a 1.2 percent annual rate in the second quarter after having initially reported growth over 2 percent. The rate-boost-obsessed Bank of Japan finally decided to stop raising rates, and, to add to the complexity of the picture, Japan's relatively new prime minister Shinzo Abe resigned, unable to provide the leadership sorely needed in a nation lacking economic and political direction.
  • Topic: Economics, International Trade and Finance, Markets
  • Political Geography: United States, Japan, United Kingdom, England
  • Author: John H. Makin
  • Publication Date: 09-2007
  • Content Type: Policy Brief
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: During a 10:00 a.m. conference call on August 17, 2007, Federal Reserve vice chairman Donald Kohn and New York Federal Reserve president Timothy Geithner were urging Citicorp chief executive Chuck Prince and his fellow big bank CEOs to use the Fed's discount window, which is set up to alleviate liquidity pressures on individual banks or on the banking system as a whole. Prince, the head of the world's largest bank (Or is it the second largest? No one really knows since bank balance sheets are so full of securities that cannot be priced.) may have been wishing that he had not chosen to offer a chillingly clear characterization of the global financial system a little more than five weeks earlier in a Financial Times interview on July 9, three weeks before the global credit markets began to seize up.
  • Topic: Economics, International Trade and Finance, Markets
  • Political Geography: United States