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American Enterprise Institute: Freedom, Opportunity, Enterprise
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Discussing Trump’s leadership: Thiessen on Fox News’ ‘The Story with Martha MacCallum’ - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Tue, 01/09/2018 - 19:48
Resident fellow Marc Thiessen discusses President Trump's meeting with legislators on immigration reform.

Intelligence beyond 2018: A conversation with CIA Director Mike Pompeo - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Tue, 01/09/2018 - 19:31

The event is only accessible to the general public through our livestream. If you are a member of the media and wish to cover this event, please contact, 202.862.5829.

The United States carries into 2018 many of the most pressing national security challenges of the previous year. The North Korean nuclear and missile programs now threaten not only the region but also the US mainland. China, Russia, and other revisionist powers are working to shape global events and landscapes to conform to their interests, to the detriment of those of the United States. And the terror threat from groups such as ISIS and al Qaeda remains potent throughout the world. In this global threat environment, America’s intelligence community is working hard to ensure the homeland remains safe.

One year into his tenure, CIA Director Mike Pompeo joins AEI’s Marc Thiessen to discuss the Trump administration’s response to these challenges and his vision for the agency’s future.

Join the conversation on social media with @AEI on Twitter and Facebook.

 If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.

Localism vs. the Politics of Abstraction - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Tue, 01/09/2018 - 18:48

In 1742 the Scottish philosopher David Hume wrote, “Parties from principle, especially abstract speculative principle, are known only to modern times, and are, perhaps, the most extraordinary and unaccountable phenomenon that has appeared in human affairs.”

Hume’s observation is a useful insight into the kinds of division and polarization that characterize the American political landscape today.

Like America’s founders after him, Hume was interested in how political factions operate. He observed that factions in the modern era had started behaving in ideological ways. Ideology, or “abstract speculative principle” in his vernacular, had become a powerful force in human associations, fueling the passions in ways that more mundane reasons for forming associations did not.

“Parties of interest” were more historically familiar than “parties of principle,” he argued, uniting citizens around common commercial and geographic interests. If, say, a politician has a keen interest in promoting solar energy because producers of solar products are in her district, she is acting out of interest. If her political decisions are framed by an abstract notion of “climate justice,” she is behaving ideologically.

In his day, Hume was primarily concerned with how religious abstractions were corrupting the pursuit of common political interests. But his observations are just as relevant today, as secular ideological commitments advance through a kind of zealotry akin to the religious fanaticism of Hume’s day.

Spiritualizing political ideologies produces what we might call a “politics of abstraction” in which adherents join an ideological tribe and defend its tenets with an inflexibility that the tribe’s members regard as virtuous. Hume said that members of factions experience a good deal of fortification from the “unanimity of sentiment” they experience in their common cause, but they are then disproportionately “shocked and disturbed” when they encounter any opposition to their ideological views.

The politics of abstraction is especially troubling when laid against the backdrop of two related developments in American public life.

First, because of its inflexibility, the politics of abstraction tends toward federal, one-size-fits-all policymaking whether the issue is climate change, government spending, taxes, healthcare, inequality, or whatever is driving the national debate. Variation, which is more common as solutions become more local, is unpalatable to ideological purists.

Progressives have long argued for federal solutions to problems, but lately, conservatives have been doing the same. The new nationalism that imbues a large swath of current Republican sentiments has little use for subsidiarity and federalism. From the Tea Party election of 2010 to the election of Donald Trump as President in 2016, Republicans have been sending people to Washington with hopes solving big national problems.

Supporters cheer U.S. President Donald Trump’s motorcade as it returns him to his Mar-a-Lago estate in Palm Beach, Florida, U.S. December 31, 2017. REUTERS/Jonathan Ernst

Very little has been said by the right or left in recent years about the virtues of mediating institutions, those bedrocks of a civil society that stand between the state and the individual, such as local associations, schools, houses of worship, neighborhoods, and families. The Contract with America that defined the Republican revolution of 1994 was anchored by policy goals presupposing the centrality of families, neighborhoods, and personal responsibility and action at the local level. Today, listening to the most prominent talking heads and politicians on the left and right, it is as if America is a nation full of unsheltered individuals seeking protection from a federal overseer. The sacred middle layer of protection between the state and the individual has largely disappeared from political rhetoric.

This problem is compounded by the incompatibility of a politics of abstraction with American institutions, which is a second problematic development. Our institutions are supposed to be vehicles through which publicly minded individuals engage in the give-and-take of solving common problems and pursuing commonly held goals. And yet our fundamental institutions such as Congress, universities, the executive branch, the media, and even the courts have increasingly become platforms for ideological expression in lieu of serving their core public purposes. It is no surprise that public confidence in them has declined significantly in the past few decades.

It is telling that as public confidence in federal and state government has declined over the past generation, confidence in local government has remained higher and largely unchanged over the same time period. Fixing potholes is less prone to ideological manipulation than fighting inequality.

Meanwhile, as ideological tribalism and institutional cynicism grow, we find ourselves more alone. Loneliness has skyrocketed since the 1980s. This is not to say that our political environment is causing the rise of social isolation in America. We do not know enough to make such a claim, and what we do know suggests that social isolation is a complex phenomenon. But it is worth noting that as voters on the right and the left have grown more exercised and angry about political issues bouncing around social media and cable TV, they are also feeling more alone. Ideological tribes may generate a “unanimity of sentiment,” in Hume’s terms, but they are no substitute for a neighborhood, church, school, or local civic organization where people stand side by side while helping a neighbor in need.

The corrective to political abstractions and personal isolation is the localization of national concerns. Almost everything that the United States needs more of is generated at the local and regional level. We need more new businesses. We need more jobs filled by underemployed people. We need more happy people. We need more healthy people. We need more good schools. We need more kids raised in two-parent families. We need more entrepreneurs with better ideas and access to more financing. We need more giving, more helping, more connectedness.

There is very little that federal government does to directly produce more of these goods. This is not to say that federal policy does not create conditions for flourishing or decline. It does. But too often, our public debates about public problems forget about the importance of looking to the local level for solutions.

Local solutions are important because human scale matters. People care most about – and are most likely to act on – that which is proximate to them. There is a reason that philosophers throughout the ages, from Plato to Hume, argued that the size of a polity matters. If problems are no longer the responsibility of those next door, and if those next door no longer feel connected to those who need them, the politics of abstraction wins.

America needs two forms of localism to counteract the politics of abstraction. The first is more local governance over issues we have ceded to Washington, DC. We need to give more flexibility to local agencies and institutions so they can better help low-income families get training and better jobs, create more educational options for families, create environments that entrepreneurs like, experiment with new types of infrastructure, make innovation easier, and more. This would be a large-scale project granting exceptions to federal and state requirements in favor of local innovation.

The second, and perhaps more important, form of localism concerns economic and social innovation. Smaller, local businesses generate revenue for other local firms and are reliable employers during economic downturns. Local entrepreneurs have a positive effect on income and employment and employ workers who are committed to their communities. We should make it easier for local entrepreneurs to launch new businesses through licensing and banking reform. We should make it easier to match enterprising firms with talented workers through modernized workforce development policies. But most importantly, we need what no government policy can achieve: local business and civic leaders committed to cultivating new business and social entrepreneurs no matter what political leaders do. This is an opportunity for a new generation of philanthropists and civic innovators.

Local action is the arena in which people are needed by others. It is the arena in which national problems become local. It is the arena in which you and I create solutions instead of waiting for distant bureaucrats to do it for us. It is the arena in which the politics of abstraction no longer makes sense and social isolation dissolves amidst true community.

Ryan Streeter is the director of domestic policy at the American Enterprise Institute and a contributor to the American Project.

Discussing smartphones’ effect on youth: Pethokoukis on CNBC’S ‘Power Lunch’ - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Tue, 01/09/2018 - 18:30
DeWitt Wallace Fellow James Pethokoukis discusses the increased usage of smartphones among children and teens.

Air routes and instability in the Taiwan Strait - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Tue, 01/09/2018 - 18:10

As the Trump administration has maintained its focus on the North Korean threat in Asia, China’s policy of unrelenting pressure on Taiwan has continued unabated. Since Tsai Ing-wen’s election in 2016, Beijing has cut off formal communications with Taipei, stripped it of democratic allies (thus breaking the “diplomatic truce” that had been in force since 2008), launched a campaign of naval and air exercises around the island, and ensured that Taiwan’s already minimal participation in international organizations was further constrained.

China’s recent behavior evinces a determination to further unsettle the security environment in the Taiwan Strait, and the Trump administration should respond appropriately. REUTERS/Ludovic Marin

Most recently, China last week inaugurated four new commercial air routes in the Taiwan Strait without informing Taiwan. In doing so, Beijing ignored a prior agreement with Taipei, dating to 2015, in which China agreed to launch only one of five new routes it had previously announced without consulting the Ma Ying-jeou government.

The M503 air route was previously opened to southbound traffic per the 2015 agreement. Last Thursday, China announced it would henceforth be open to northbound traffic as well. China also announced the opening of three west-east feeder routes to the M503 from Xiamen, Fuzhou, and Dongshan.

The M503 runs just west of the Taiwan Strait’s center line, which serves as the unofficial air boundary between Taiwan and mainland China. Those responsible for ensuring Taiwan’s security worry that People’s Liberation Army aircraft may take advantage of the new routes to approach the island under the guise of commercial airliners.

China’s behavior here evinces a determination to further unsettle the security environment in the Taiwan Strait and a willingness to do so with little regard for the safety of civil aviation. The actions of a responsible major power these are not.

Taiwan’s inclusion in the Trump administration’s recently released National Security Strategy was a positive development, and the president should now move quickly to put some meat on his strategy’s bones. Strategic stability is on the wane in the Taiwan Strait. To restore it, and thus head off a potential crisis, Washington should draw closer to Taiwan, support its military modernization needs, and make the island’s security a priority in the administration’s dealings with Beijing.

Learn more:

Reinventing America’s schools | Viewpoint - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Tue, 01/09/2018 - 15:58

AEI’s Andy Smarick interviews David Osborne, author of the new book “Reinventing America’s Schools”. A quarter-century ago, Osborne co-authored “Reinventing Government”, the path-breaking, best-selling book on reimagining how the government carries out some of its key responsibilities. “Reinventing America’s Schools” uses those lessons to explain the dramatic education changes taking place in a number of US cities. He and Smarick discuss parental choice, local boards of education, and nonprofit school operators, as well as the encouraging results and challenging politics of these reforms.

DEBATE: What Could the Iran Uprising Portend? - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Tue, 01/09/2018 - 15:42

BESA Center Online Debate No. 4, January 9, 2018.

Q: Anti-government protests in Iran – occurring for the first time since 2009 – are attracting international attention. The scale and ferocity of the uprising have left many people dead, injured, or arrested. The reasons for this new internal instability, and the potential repercussions for the country and the regime, have generated a lively debate. BESA asks the experts: What could the uprising in Iran portend?

Respondents: Benjamin Weinthal, Ze’ev Maghen, Michael Rubin, Anoush Ehteshami, Ali Ansari, Peter Rough


Benjamin Weinthal, Research Fellow, Foundation for Defense of Democracies

There are two possibilities for the Iranian protests sweeping the country.

First, the Iranians seeking liberty, democracy, self-dignity and economic justice could topple the regime controlled by the incorrigibly reactionary Ayatollah Ali Khamenei. It is probably a tall order to dissolve the regime, but the different character of the revolts blanketing Iran reveal a bundle of potential for a new political and social system. A telling point is that the protests, in contrast to the 2009 Green Movement demonstrations, are not largely limited to Tehran but have permeated the country and smaller cities. BBC Persian reported that 90% of the protests unfolded in cities that have not previously experienced demonstrations against Iran’s clerical rulers. The mix of working-class Iranians and young people demanding an end to the regime is a breathtaking development.

Widespread labor unrest in a largely closed society like Iran is a salient example that the regime’s foundation is on shaky ground. The chants voiced among the protesters suggest that the outrage is chiefly about human freedom. Some of the slogans voiced: “We don’t want an Islamic Republic!” “Death to the Dictator!” “Mullahs Must Get Lost!” “The Clerics Act Like Gods!” Death or Freedom!” “Leave Syria, think about us!” “Not Gaza, not Lebanon – my life for Iran!” and “We will die – [but] we will take back Iran!” Whereas the Green Movement activists of 2009 protested the fraudulent presidential election, the ubiquitous protests over the last week help explain that this new movement is about emancipation.

The second possibility is that Iran’s regime employs its massive security apparatus (the Revolutionary Guards Corp and the Basij) to crush the protests. With over 20 people dead and more than 2,000 arrests, Iran’s clerical rulers are already waging a bloody conflict. It is worth recalling that an Iranian regime that aided Syrian dictator Bashar Assad in his use of chemical warfare to wipe out civilians will go to great lengths to preserve its Islamic revolutionary system.

If the worst case scenario succeeds and the current protests are smashed, there is a still a strong basis for a new revolt. European Union and US support for democracy promotion in Iran will help enormously for the next wave of protests. Put simply, ordinary Iranians loathe the regime of Supreme Leader Ali Khamenei. The inherent potential of regime change will not vanish. In fact, it will increase.


Professor Ze’ev Maghen, Professor of Arabic Literature and Islamic History and Senior Research Associate at the Begin-Sadat Center for Strategic Studies, Bar-Ilan University

The fundamental difference between the ongoing protests in Iran and similar demonstrations in previous years is that they are undermining the very basis of the Islamic Republic. In the past, demonstrators complaining about the economy or against corruption or election irregularities could hardly threaten the Islamic Republic itself. But current slogans reflect strong nationalism. They are calling for a return to the Iran of before the Islamic Revolution and are not simply targeting a particular person, although “death to the dictator” is still heard these days.

The future course of the ongoing protests will mainly depend on two factors. The first is the number of participants, which is not particularly large as yet. The second is the ability of the Islamic Republic to practically apply its repression mechanism and silence the voices of opposition. For the time being, the protesters are finding it difficult to motivate the masses to take to the streets around the country and support the cause of nationalism against the ayatollahs. However, if the number grows, the Iranian regime will be placed under threat. It is under those circumstances that regime change might be cultivated.


Michael Rubin, Resident Scholar, American Enterprise Institute (AEI), Washington DC

Make no mistake, the fall of the Islamic Republic would be a gift to the world. Iran is a country of fantastic human capital and wealth and Iranians deserve to be free. The Iranian public is also largely immunized to Islamism and other populisms, having suffered so dearly for them over the decades. But it’s important not to be Pollyannaish about the difficulties that would ensue. The Islamic Revolutionary Guard Corps is extraordinarily wealthy, and at least some are true believers. They may not go down without a fight, even if Ali Khamenei ends his days swinging from a lamppost. Even if the Revolutionary Guards move on, they will be a formidable economic force in the future.

It’s naïve to believe Iranians are pro-American or even pro-Western. Conspiracy theories don’t die overnight. A naïve leftism and statism has long dominated Iranian intellectual circles. And while lofty rhetoric of social justice may sound good in tea houses and university campuses, it’s going to take serious work to rebuild the damage done to Iran over decades. Still, the overall balance sheet will be positive should the Islamic Republic end, not only for Iranians, but also for Lebanese, Syrians, Yemenis, and many others.


Anoush Ehteshami, Professor of International Relations in the School of Government and International Affairs, Durham University

These are significant developments in Iran.

This level of countrywide protest was last seen in 2009 following Ahmadinejad’s reelection as president against all predictions and pollster expectations. In 2009 demonstrations started in Tehran and spread to other major urban centers; the demonstrators had a clear set of grievances regarding the election’s outcome (“Where is my vote?”) and the system’s repressive and dismissive response to it; the demonstrators had clear leadership in the figure of the two popular, reform-leaning candidates (both of whom are still under house arrest); and the demonstrations were organized.

This time, while protests were triggered as a response to the difficult socioeconomic conditions and were sparked by President Rouhani’s hardline opponents, they soon spread beyond their control and acquired an anti-regime form. This time around there is no leadership, no organized force to manage the protests, and no clear demands that can be met or addressed. So while it may be easier to quell the protests, their spontaneous and political nature, as well as their spread, marks them out as a signal of widespread dissatisfaction and pent-up anger and frustration against the regime.

Ironically, the protests make life very difficult for the centrist and pro-reform President Rouhani, whose election victory last year was welcomed as a sign of reformist-consolidation, reinforcing the reform camp’s grip on city councils and in the parliament. The assumption was that with them in control, Iran was stabilizing around the center ground. The protesters are signaling that small changes, cosmetic reforms, or talk of change without action is no longer acceptable to them.

Further, slogans against Iran’s regional policies indicate that there is general concern about the direction of Iran’s foreign policy and the “axis of resistance” that Tehran so proudly and openly sponsors and supports. Iranians want an end to regional adventurism and isolation and demand that the resources squandered in Syria, Lebanon, Iraq, Gaza, and Yemen be used to help them at home.

So the regime is facing a serious crisis. A reformist government that promised change for the better, rule of law, openness, and freedom of thought and expression cannot then brand protesters foreign agents and dismiss their concerns – and yet without major structural change and a serious check on the power of the clerical and security establishment, little can be changed! The pro-reform government simply cannot enforce the necessary structural changes.

Also, Iran’s regional and foreign policy is set by the Supreme Leader and agreed by the country’s Supreme National Security Council. The government cannot change Iran’s regional and foreign policy by itself; nor does it want to change the principles of the regime’s foreign policy, as the current foreign policy course of action is all about Iran’s “revolutionary horizons.” This government certainly cannot try and renegotiate that policy with the Leader and the security establishment and expect to stay in power.

The government is between a rock and a hard place domestically and is in danger of appearing weak and vulnerable externally, which might invite pressure from its regional detractors as well as the US. Questioning the legitimacy of the Rouhani government will make it more vulnerable to pressure by the hardliners at home. This will not only add to Tehran’s problems but may well push the outside opponents of the nuclear deal to seek its renegotiation, or worse still termination. If the Iranian security apparatus uses excessive force against the protesters, imprisons large numbers of people, and kills many on the streets or under torture, then it will be very difficult for the parties who remain supportive of the nuclear deal, like the EU, China, and Russia, to come to Tehran’s defense.

Finally, the crisis can only deepen the cleavages in the Iranian state between the so-called moderates and hardliners, thus weakening the regime and its apparatus in the long run. These protests are perhaps a wake-up call for the regime, whose leadership is increasingly detached from the people and appears hypocritical and unresponsive to the people’s and the country’s needs. As I said in my recent book on Iran, this is a regime “stuck in transition” – and as we are now witnessing, this limbo land is dangerous and unsustainable.


Ali Ansari, Professor, School of History, St Andrews University

It is difficult to assess at this stage how the protests might develop, but the authorities are clearly preparing for a clampdown by pointing the finger at the usual foreign suspects and attempting to make a clear distinction between rioters and protesters, a distinction that I suspect will be quite difficult to make in practice. The immediate consequence therefore is likely to be a period of further repression and a weakening of Rouhani, who faces the unpalatable choice of siding with his constituents or with the revolutionary authorities – and losing credibility with whichever side he disappoints. Experience of course suggests that he will side with the authorities.

How matters subsequently develop depends very much on what efforts might be taken to address the causes of the discontent. Again, history suggests that the authorities will do very little to address the clear political deficiencies, preferring instead to labor away at economic development as the solution. History has shown this to be ineffective with the consequence that the Islamic Republic is likely to be facing a period of protracted turbulence and instability.


Peter Rough, Fellow, Hudson Institute, Washington DC

The first rule of crisis management is that early facts are unreliable – and quite often tend to be wrong. As a result, it is important to remain analytically cautious in assessing the events unfolding on the ground in Iran. Even so, that uncertainty should not translate into political paralysis. Iran is a committed enemy of the West, and the US and its allies should seize this opportunity to apply pressure on it. The protesters in Iran must hear that even more powerful actors than their own oppressors stand with them.

In the best-case scenario, the protests in Iran trigger a comprehensive US policy to pressure the Iranian regime. The US has taken at least one step in this direction already, issuing new sanctions against entities linked to Iran’s ballistic missile program. Appalled by the regime’s crackdown, President Trump may decide to go a step further by sanctioning complicit individuals. In the ideal scenario, the president would decline to continue waiving sanctions on the Central Bank of Iran and publish information on the institution’s role in channeling money to regional proxies and wars. A broad campaign to undermine Iran in Syria would follow.

For years, Iran has cultivated a Janus-faced image: while Hassan Rouhani wore a Western smile, Qassam Soleimani brutally exported the Iranian revolution. In the uprising, the people of Iran have exposed Rouhani as a regime functionary rather than a moderate reformer. Paradoxically, Rouhani’s hardline competitors inside the regime will interpret the protests as vindication, arguing that his style has brought the regime to the precipice of ruin. As a result, the mullahs are likely to turn even more ruthless in the coming year, crushing dissent at home while continuing their malfeasance abroad. In the process, the true face of Iran will reveal itself even more clearly.

Evaluating CFIUS: Challenges posed by a changing global economy - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Tue, 01/09/2018 - 15:00

This hearing will examine the history, operations, and any operational challenges of the multi-agency panel known as the Committee on Foreign Investment in the United States (CFIUS). CFIUS examines proposed investment in the United States to identify, and if possible, mitigate any threat to national security, or recommend to the president he use his authority to reject the proposal. The hearing will provide the subcommittee with information about CFIUS’s effectiveness, any challenges it faces in the current economic environment, and potential improvements that could be made to increase its effectiveness. This is the second hearing in the 115th Congress held by the Subcommittee to examine CFIUS.

The 2018 RHSU Edu-Scholar Public Influence scoring rubric - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Tue, 01/09/2018 - 13:25

Tomorrow, I’ll be unveiling the 2018 RHSU Edu-Scholar Public Influence Rankings, honoring the 200 university-based scholars who had the biggest influence on educational practice and policy last year. Today, I want to run through the methodology used to generate those rankings.

Given that there are well over 20,000 university-based faculty in the U.S. who are tackling education, simply making the Edu-Scholar list should be deemed an accomplishment in its own right. So, who made the list? Eligible are university-based scholars who focus primarily on educational questions (“university-based” meaning a formal university affiliation). The rankings include the top 150 finishers from last year, augmented by 50 “at-large” additions named by a selection committee of 31 disciplinarily and intellectually diverse scholars. The selection committee (composed of members already assured a bid by dint of finishing in last year’s top 150) nominated and then selected the final 50. (In those cases where an automatic qualifier is no longer affiliated with an American university, typically due to retirement, the committee selects additional “at-large” names.)

I’m indebted to the committee members for their assistance and would like to take a moment to acknowledge the members of the 2018 RHSU Selection Committee. They are: Deborah Ball (U. Michigan), Camilla Benbow (Vanderbilt), Linda Darling-Hammond (Stanford), Susan Dynarski (U. Michigan), Susan Fuhrman (Columbia), Dan Goldhaber (U. Washington), Sara Goldrick-Rab (Temple), Jay Greene (U. Arkansas), Eric Hanushek (Stanford), Andy Hargreaves (Boston College), Shaun Harper (USC), Doug Harris (Tulane), Jeff Henig (Columbia), Tom Kane (Harvard), Sunny Ladd (Duke), Gloria Ladson-Billings (U. Wisconsin), Marc Lamont Hill (Morehouse), Susanna Loeb (Stanford), Pedro Noguera (UCLA), Robert Pianta (U. Virginia), Jonathan Plucker (Johns Hopkins), Morgan Polikoff (USC), Stephen Raudenbush (U. Chicago), Jim Ryan (Harvard), Marcelo Suarez-Orozco (UCLA), Jacob Vigdor (U. Washington), Kevin Welner (CU Boulder), Marty West (Harvard), Daniel Willingham (U. Virginia), Yong Zhao (Kansas), and Jonathan Zimmerman (U. Penn).

Okay, so that’s how the list was compiled. How were the scholars ranked? Each scholar was scored in nine categories, yielding a maximum possible score of 200—although only a handful of scholars actually cracked 100.

Scores are calculated as follows:

Google Scholar Score: This figure gauges the number of articles, books, or papers a scholar has authored that are widely cited. A neat, common way to measure the breadth and impact of a scholar’s work is to tally works in descending order of how often each is cited, and then identify the point at which the number of oft-cited works exceeds the cite count for the least-frequently cited. (This is known in the field as a scholar’s “h-index.”) For instance, a scholar who had 20 works that were each cited at least 20 times, but whose 21st most-frequently cited work was cited just 10 times, would score a 20. The measure recognizes that bodies of scholarship matter greatly for influencing how important questions are understood and discussed. The search was conducted using the advanced search “author” filter in Google Scholar. A hand search culled out works by other, similarly named, individuals. For those scholars who have created a Google Scholar account, their h-index was available at a glance. While Google Scholar is less precise than more specialized citation databases, it has the virtue of being multidisciplinary and publicly accessible. Points were capped at 50. This measure offers a quick way to gauge the expanse and influence of a scholar’s work. (This search was conducted on December 13.)

Book Points: An author search on Amazon tallied the number of books a scholar has authored, co-authored, or edited. Scholars received 2 points for a single-authored book, 1 point for a coauthored book in which they were the lead author, a half-point for coauthored books in which they were not the lead author, and a half-point for any edited volume. The search was conducted using an “Advanced Books Search” for the scholar’s first and last name. (On a few occasions, a middle initial or name was used to avoid duplication with authors who had the same name, e.g., “David Cohen” became “David K. Cohen.”) We only searched for “Printed Books” (one of several searchable formats) so as to avoid double-counting books which are also available as e-books. This obviously means that books released only as e-books are omitted. However, as matters stand, few relevant books are released solely as e-books (this will likely change before long, but we’ll cross that bridge when we come to it). “Out of print” volumes were excluded, as were reports, commissioned studies, and special editions of magazines or journals. This measure reflects the conviction that books can influence public discussion in an outsized fashion. Book points were capped at 20. (This search was conducted on December 14.)

Highest Amazon Ranking: This reflects the author’s highest-ranked book on Amazon. The highest-ranked book was subtracted from 400,000 and the result was divided by 20,000 to yield a maximum score of 20. The nature of Amazon’s ranking algorithm means that this score can be volatile and favors more recent sales. For instance, a book may have been very influential a decade ago and continue to influence citation counts and a scholar’s visibility but no longer sell many copies. Such a book will typically have a low Amazon ranking. The result is an imperfect measure, but one that conveys real information about whether a scholar has penned a book that is influencing contemporary discussion. (This search was conducted on December 15.)

Syllabus Points: This seeks to measure long-term academic impact on what is being read by the rising generation of university students. A search of “” (a website which collects over one million syllabi from across American, British, Canadian, and Australian universities) was used to gauge how widely used were the works of various authors. A search of the “Open Syllabus Explorer,” using the scholar’s name, was used to identify their top-ranked text. The score reflects the number of times that text appeared on syllabi, with the tally then divided by 5. The score was capped at 10 points. (This search was conducted on December 14.)

Education Press Mentions: This measures the total number of times the scholar was quoted or mentioned in Education Week, the Chronicle of Higher Education, or Inside Higher Education during 2017. Searches were conducted using each scholar’s first and last name. If applicable, we also searched names using a common diminutive and both with and without middle initials. In each instance, the highest result was recorded. The number of appearances in the Chronicle and Inside Higher Ed were averaged and that number was added to the number of times a scholar appeared in Education Week. (This was done to give equal weight to K-12 and higher education.) The resulting figure was multiplied by two, with total Ed Press points then capped at 30. (This search was conducted on December 15.)

Web Mentions: This reflects the number of times a scholar was referenced, quoted, or otherwise mentioned online in 2017. The intent is to use a “wisdom of crowds” metric to gauge a scholar’s influence on the public discourse last year. The search was conducted using Google. The search terms were each scholar’s name and university affiliation (e.g., “Bill Smith” and “Rutgers University”). Using affiliation served a dual purpose: It avoids confusion due to common names and increases the likelihood that mentions are related to their university-affiliated role, rather than their activity in some other capacity. If a scholar was mentioned sans affiliation, that mention was omitted. As with the Education Press category, searches included common diminutives and were run with and without middle initials. For each scholar, we used the single highest score from among these various configurations. (We didn’t sum them, as that produces complications and potential duplication.) Points were calculated by dividing total mentions by 30. Scores were capped at 25. (This search was conducted on December 15.)

Newspaper Mentions: A Lexis Nexis search was used to determine the number of times a scholar was quoted or mentioned in U.S. newspapers. Again, searches used a scholar’s name and affiliation, diminutives, and were run with and without middle initials. In each instance, the highest result was recorded. Points were calculated by dividing the total number of mentions by two, and were capped at 30. (The search was conducted on December 15.)

Congressional Record Mentions: We conducted a simple name search in the Congressional Record for 2017 to determine whether a scholar had testified or if their work was referenced by a member of Congress. Qualifying scholars received five points. (This search was conducted on December 15.)

Klout Score: We first determined whether a given scholar had a Twitter account, with a hand search ruling out similarly named individuals. For scholars who did, we then obtained their Klout score. Klout is a number between zero and 100 that reflects online presence and influence across several information-sharing platforms. The Klout score was divided by 10, yielding a maximum score of 10. (This search was conducted on December 14.)

Scores are designed to acknowledge scholars who are actively engaged in public discourse and whose work has an impact on practice and policy. That’s why the scoring discounts, for instance, rarely cited academic publications or books that are unread or out of print. Generally speaking, the scholars who rank highest are those who are both influential researchers and influential public voices.

There are obviously lots of provisos when perusing the results. Different disciplines approach books and articles differently. Senior scholars have had more opportunity to build a substantial body of work and influence (and the results unapologetically favor sustained accomplishment). And readers may care more for some categories than others. That’s all well and good. The whole point is to spur discussion about the nature of constructive public influence: who’s doing it, how valuable it is, and how to gauge a scholar’s contribution.

A couple of notes regarding questions that come up annually. First, there are some academics that dabble (quite successfully) in education, but for whom education is only a sideline. Such individuals are not eligible (I’m sure they’ll understand.) For a scholar to be included, education must constitute a substantial slice of their scholarship. This policy helps ensure that the rankings serve as something of an apples-to-apples comparison. Otherwise, Nobel laureates who’ve dabbled in education would play havoc with the rankings. Second, scholars sometimes change institutions in the course of a year. My policy is straightforward: For the categories where affiliation is used, the searches are conducted using a scholar’s year-end affiliation. The alternative creates concerns about double-counting and places an undue burden on my RAs. So, scholars get dinged a bit in the year which they move. But that’s life.

Tomorrow’s list represents obviously only a sliver of the faculty across the nation who are tackling education or education policy. For those interested in scoring additional scholars, it’s a straightforward task to do so using the scoring rubric. Indeed, the exercise was designed so that anyone can generate a comparable rating for a given scholar in a half-hour or less.

And a final note of thanks: For the hard work of coordinating the selection committee, finalizing the 2018 list, and then spending dozens of hours crunching and double-checking all of this data for 200 scholars, I owe a big shout-out to my gifted, diligent, and wholly remarkable research assistants Amy Cummings, Grant Addison, and Sofia Gallo.

With VTech settlement, Federal Trade Commission flexes its privacy and cybersecurity muscle - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Tue, 01/09/2018 - 11:00

Yesterday the Federal Trade Commission (FTC) settled its multiyear investigation of VTech Electronics, a leading manufacturer of electronic learning toys. In November 2015, VTech disclosed that a data breach had compromised information about millions of children, prompting the FTC to investigate not only how the breach occurred but also what exactly VTech was collecting and how it was doing so. The settlement highlights the unique risks when collecting data on children in particular and continues to reinforce the FTC’s claim as America’s top cybersecurity cop in an increasingly connected world.


COPPA (Or why Facebook prohibits users under 13)

Although the internet economy runs largely on the monetization of consumer data, American law places greater restrictions on the collection of certain sensitive data, including information about children. The Children’s Online Privacy Protection Act of 1998 (COPPA) prevents online services from knowingly collecting personal information on children under 13 without first obtaining verifiable parental consent. COPPA-relevant data include a child’s

  • First and last name,
  • Home address,
  • Online contact information such as an email address,
  • Telephone number, and
  • Photo, video, or audio recordings.

The COPPA “opt-in” regime contrasts with the “opt-out” norm that governs the collection of most other data online. It also requires such companies to maintain records of parental consent in the event of an audit or incident and to provide a mechanism for parents to withdraw consent at any time. COPPA also requires such companies to not only notify parents what data are collected and how they are used and but also establish reasonable procedures to protect the confidentiality and integrity of those data. COPPA compliance can be costly and difficult, which is why many online companies limit their services to users 13 or older (thus protecting them from “knowingly” collecting COPPA-relevant data).

The VTech breach and its aftermath

Among other products, VTech manufactures connected portable learning devices — akin to an educational children’s tablet — and sells apps for those devices. One such app was Kid Connect, which allows kids to communicate with one another with parental authorization. In November 2015, VTech disclosed that a hacker had accessed its network and taken personal information, including about users of Kid Connect. In a complaint filed in court against VTech, the FTC alleged that these data included COPPA-covered data such as names, contact information, and photos and audio files. Although some of this data had been encrypted, the hacker also allegedly obtained VTech’s decryption keys.

Learn more:

Although the data breach prompted the FTC’s investigation, the complaint also focused on the company’s data-collection practices before the breach. Specifically, it alleged that VTech did not link to its privacy policy on every screen that collected information from kids. Where it did provide a link, on the registration page, the link was in small blue font at the bottom corner of the page. And the privacy policy did not include COPPA-required disclosures about what data were collected and how they were  used.

Regarding the data breach, the FTC alleged that VTech failed to take reasonable measures to deter and detect unauthorized access to its systems. Specifically, the company did not develop a comprehensive information security system; it did not segment the test environment (which is how the hacker gained entry) from the live website (where the intruder gathered the protected data); and it did not train employees in data security efforts. The company also did not maintain an intrusion detection system — it apparently learned of the breach from a journalist. The FTC also alleged that VTech’s privacy policy stated that the data it collected would be transmitted in encrypted form when in fact they were not, which constituted a deceptive trade practice under the FTC Act.

In the settlement released yesterday, VTech did not admit liability but agreed to pay a $650,000 civil penalty. It also agreed to a permanent injunction against violating COPPA and a comprehensive data security program subject to a biennial independent audit for the next two decades.

Broader implications

VTech is hardly the first company to be accused of running afoul of COPPA. But the settlement fine and compliance measures are a reminder of the increased regulatory burden that companies assume when marketing to kids online. In its COPPA compliance documents, the FTC stresses that data security is a “living” process that must be revisited periodically in response to an evolving threat landscape. What was sufficient last year to protect data may not be sufficient next year, particularly when the data are as sensitive as personal information about children. The FTC Act allegation is also a reminder to companies to assure they comply with their privacy policies: Whatever you say you do, make sure you actually do it.

More broadly, the VTech settlement is another brick in the structure of the FTC’s ongoing transition into the tech space. FTC Acting Chief Technology Officer Neil Chilson recently penned a blog post highlighting the ways the agency develops technical proficiency in response to an evolving competitive landscape, including maintaining an Office of Technology Research and Innovation. When repealing the Federal Communications Commission’s Privacy Order, Congress (and incoming FCC Chairman Ajit Pai) placed their faith in the Federal Trade Commission to enforce data privacy norms online. As more activities online and the Internet of Things multiplies the amount of data collected each year, this becomes an increasingly important task. The VTech settlement shows that, when it comes to our most important and sensitive data, the FTC is up to the task.

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Where the Money Goes: The Distribution of Crop Insurance and Other Farm Subsidy Payments - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Tue, 01/09/2018 - 10:00

Key Points

  • This study examines the distribution of Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) program payments and crop insurance subsidy payments among US farms.
  • If the objective of cost-effective farm safety-net policies is to ensure a stable food supply by helping all farms manage otherwise volatile revenues, then the current programs do not direct taxpayer funds in ways that effectively protect farm operations that are most vulnerable to such shocks.
  • Policies capping crop insurance subsidies and ARC and PLC benefits could result in substantial reductions in federal outlays with minimal adverse implications for 90 percent (and in some cases, more) of US farms.

Read the full PDF. 

Executive Summary 

This study examines the distribution of Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) program payments and crop insurance subsidy payments among US farms. Data from the United States Department of Agriculture (USDA) Agricultural Resource Management Survey, USDA Farm Service Agency, and USDA Risk Management Agency are combined to characterize farms in terms of the value of crop sales.

The results of the analysis indicate that farms in the top 10 percent of the crop sales distribution received approximately 68 percent of all crop insurance premium subsidies in 2014 and that farms in the top 2 percent receive approximately $50 per acre in crop insurance subsidies, more than four times higher than the average per-acre subsidy of $12.28. In addition, farms in the top 20 percent of the crop sales distribution received more than 82 percent of ARC and PLC payments in 2015. Farms in the top 5 percent of crop sales received close to the total amount of ARC and PLC payments ($299 million) received by farms in the lowest 90 percent of crop sales ($358 million). Finally, the top 10 percent of farms in crop sales were estimated to receive nearly $3 billion in total ARC, PLC, and crop insurance subsidy payments in 2015, and farms in the bottom 80 percent of crop sales received approximately the same total amount of ARC, PLC, and insurance subsidy payments as farms in the top 2 percent.

The study also examines the effects and trade-offs of implementing payment restrictions. The results of the analyses indicate that a $40,000 per-farm cap on crop insurance subsidies would have resulted in $2.02 billion in savings (approximately 42 percent of all premium subsidy outlays) in 2014. However, the $40,000 cap would affect less than 5 percent of all farms. Also, a lower $30,000 cap on premium subsidies would have saved $2.51 billion, and a less stringent $50,000 cap would have saved $1.74 billion in taxpayer outlays.

Meanwhile, a $125,000 cap on per-farm ARC and PLC payments would affect 17.2 percent of enrolled farms, the majority of which fall in the top 10 percent of crop sales. Total savings would have been approximately $70 million. A $250,000 cap on per-farm ARC, PLC, and crop insurance subsidy payments would result in $273 million in savings, of which 67 percent would come from farms in the top 1 percent of the crop sales distribution. Finally, a $125,000 cap on per-farm ARC, PLC, and crop insurance subsidy payments would affect only 3 percent of farms in the 50th to 90th decile of the crop sales distribution. Lower payments to farms in the top 10 percent of crop sales would result in savings of nearly $650 million, which represents 97 percent of the overall $670 million savings from the $125,000 cap.


Who receives what benefits from farm subsidy programs has been a focus of economics research throughout the evolution of US agricultural policy. The issue is politically controversial. However, economists have continued to examine the issue on an evidence basis, in part in response to D. Gale Johnson’s call in the early 1970s that “any governmental program that involves substantial expenditures by taxpayers and consumers should be periodically evaluated.”1 In the mid- and late-2000s, the findings from these evidence-based analyses led to widespread criticisms of many agricultural support programs—including the Direct Payments (DP), Countercyclical Payment (CCP), Average Crop Revenue Election (ACRE), and Supplemental Revenue Assurance (SURE) programs— by economists, policymakers, and the media.2

The 2014 Farm Bill (the 2014 Agriculture Act) terminated the DP, CCP, ACRE, and SURE programs. However, the 2014 Farm Bill replaced CCP and ACRE with two new initiatives, the Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) programs. Together with the federally subsidized crop insurance program—a new Stacked Income Protection Plan (STAX) for cotton and a new Dairy Margin Protection Program—ARC and PLC comprise what is widely described as the current farm safety net. Federal expenditures on ARC, PLC, and the federal crop insurance program are estimated to have averaged $12–$14 billion per year since 2014 and are expected to be similarly funded between 2018 and 2027.3 Further, those subsidies are targeted mainly to producers of program crops.4 However, the Congressional Budget Office has also estimated that between 2017 and 2027, more than 70 percent of ARC, PLC, and crop insurance payments will flow to producers of just three crops: corn, soybeans, and wheat.5

In light of the substantial estimated public expenditures on these new agricultural support programs, this study also follows Johnson’s call to evaluate the economic equity of the 2014 Farm Bill safety-net programs.6 We use farm-level data from the Agricultural Resource Management Survey (ARMS) to estimate distributions of subsidy payments by size of farm as measured by crop sales, and then we use these estimates to examine potential benefit-cost trade-offs for agricultural producers and taxpayers resulting from changes to the structure of current safety-net programs. We estimate that in 2014 and 2015, approximately 60 percent of total crop insurance subsidies and ARC and PLC government subsidies were paid to producers in the highest 10 percent of the crop sales distribution. Further, farm businesses in the top 5 percent of crop sales received nearly 40 percent of all program payments, but more than 50 percent of farms in the lower 70 percent of the crop sales distribution received no subsidy or program payments. Further, the results indicate that more stringent restrictions on existing agricultural programs and crop insurance subsidies considered here would affect only farm businesses in the top 5–7 percent of the crop sales distribution but would likely result in a 30–40 percent reduction in public expenditures.

Read the full report. 


1. D. Gale Johnson, Farm Commodity Programs: An Opportunity for Change (Washington, DC: American Enterprise Institute, 1973), 21.
2. John Antle and Laurie Houston, “A Regional Look at the Distribution of Farm Program Payments and How It May Change with a New Farm Bill,” Choices 28, no. 4 (2013),; and David Orden and Carl Zulauf, “Political Economy of the 2014 Farm Bill,” American Journal of Agricultural Economics 97, no. 5 (2015): 1298–311.
3. Congressional Budget Office, “CBO’s June 2017 Baseline for Farm Programs,” 2017, recurringdata/51317-2017-06-usda.pdf.
4. Crops eligible for PLC and ARC payments include barley, chickpeas, corn, dry peas, grain sorghum, lentils, oats, peanuts, rice soybeans, wheat, and a wide range of minor oilseed crops including canola, crambe, flaxseed, mustard, rapeseed, safflower, sesame seeds, and sunflower. More than 130 crops are eligible for federal crop insurance subsidies. See Anton Bekkerman, Eric J. Belasco, and Vincent H. Smith, “Does Size Matter? Distribution of Crop Insurance Subsidies and Government Program Payments Across US Farms” (working paper, Montana State University Center for Regulation and Applied Economic Analysis, 2017), resources/pdfs/Smith-distributions-paper-october-2017.pdf.
5. In 2017, corn, soybeans, and wheat together received $4.458 billion in crop insurance premium subsidies, 73 percent of the total amount of $6.07 billion in premium subsidies paid to all 130 or more crops in the program. In 2016, ARC and PLC payments for all crops amounted to $5.283 billion, of which corn ($3.752 billion), wheat ($756 billion), and soybeans ($328 billion) received 85 percent ($4.502 billion). Congressional Budget Office, “CBO’s June 2017 Baseline for Farm Programs.”
6. Johnson, Farm Commodity Programs.

Is education worth it? - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 01/08/2018 - 23:22

The US spends about $12,500 a year per public-school student, which many argue is not enough to ensure a high-quality education for all students. Economics professor Bryan Caplan argues just the opposite in his forthcoming book, “The Case Against Education: Why the Education System Is a Waste of Time and Money” (Princeton University Press, January 2018), claiming that education is overrated, primarily serving as a credentialing institution that does not add much value.

Does education enhance students’ knowledge and skills? Or does it mostly “signal” their intelligence, work ethic, and conformity — the qualities of a good employee?

Join AEI as Bryan Caplan debates AEI’s Eric Hanushek about the value of education. The event will feature an interactive debate, with audience members voting to determine a winner.

Join the conversation on social media with #IsEducationWorthIt.

 If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.

Discussing the Goldwater Rule and mental health: Satel on Fox News’ ‘Special Report with Bret Baier’ - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 01/08/2018 - 23:00
Resident Scholar Sally Satel discusses President Trump's mental health and the Goldwater Rule, a section of the American Psychiatric Association guidelines that says it's unethical for a psychiatrist to offer professional opinion unless he or she has conducted an examination.

6 things you need to know about the Iran protests - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 01/08/2018 - 22:01

The Iran protests are almost two weeks old. What began on Dec. 28 as a demonstration against rising food prices escalated quickly into a protest that has shaken the core of the regime. The late Ayatollah Khomeini, who led the Islamic Revolution in 1979, famously quipped that “This revolution was not about the price of watermelons,” but his successors may soon learn that the next one could be.

Almost immediately, talking heads took to the airwaves to fit the Iran protests into their own existing narratives. In essence, the Iranian protests became a political football for American politicians and European officials. The protests, however, provide many other lessons both to understanding what’s going on inside Iran now and to recognize what, 38 years after the Islamic Revolution, Western policymakers and intelligence services still don’t understand about Iran. Here are just a few:

1. Reformism alone can’t bring change. That Iranians are frustrated is no surprise. Mass protests have erupted in 1999, 2001, 2009, and now. Iranians resent the corruption of their leadership and the failure of the Islamic Republic to rectify any of the problems that Khomeini identified to justify his revolution. It is clear Iran is a tinderbox and the only question that matters is if the regime is better at smothering the embers than ordinary Iranians are at fanning the flames.

While many in the West and in Iran have placed their hopes in muddle-thru reform, the reason why this can never work is that the Islamic Revolutionary Guard Corps exists not only to protect not the territory of Iran, but also the ideals of the Islamic Revolution. This means it is just as geared to counter internal threats as it is to fight foreign enemies. In other words, it serves as a Praetorian Guard for the Supreme Leader.

Even if 90 percent of Iranians wanted reform, it wouldn’t matter, unless there was a strategy in place to fracture the IRGC and associated security forces.

2. Iran’s security forces and economy are inextricably intertwined. The IRGC rose to prominence during the 1980-1988 Iran-Iraq War. At its conclusion, they were loath to return to the barracks and give up their position. They made a strategic decision to use their industrial and engineering base to enter the civilian sector in order to build a financial base that would make them independent of the ordinary budgetary process.

Fast forward 30 years and today the IRGC’s economic wing controls about 40 percent of Iran’s economy and dominates the oil industry, infrastructure development, construction, manufacturing, electronics, and the most lucrative import-export contracts. Apologists for the Islamic Republic are right that the protests started about the economy, but they are wrong to assume that this means they are not political.

While many Americans imagine falsely that Iran’s population is overwhelmingly youthful (it’s not) or pro-American (sorry, no), the concerns of ordinary Iranians are more mundane: They want back wages paid, living wages, and safe working conditions. The speed at which working-class Iranians turned on the regime is because the IRGC controls many of the factories and industries in which they work and uses its influence and military force to avoid adherence to the law. Ordinary Iranians feel they have no other recourse. The IRGC has such a stranglehold on the economy, it’s impossible to improve the livelihoods of ordinary Iranians while the security forces remain parasitic to Iran’s economy.

3. We’re blind to security forces factionalism. How often do American officials and journalists describe Iranian politicians as hardline, reform, or moderate? Let’s put aside the fact that such a description is relative since it ignores the 75 percent or so of the Iranian public who don’t believe in the idea of clerical rule. Iranian reformers are no more liberal than Alabama Judge Roy Moore.

The real problem is, more than 38 years after the Islamic Revolution, the U.S. intelligence community has no idea what the factional breakdowns are among the Iranian security forces. Almost every Iran analyst will swear that the IRGC aren’t monolithic—some Iranians join for the privileges or pay, while others are true believers. But which are which?

That’s not the only unknown. In 2007, the IRGC reorganized on the basis that the greatest threat to the Islamic Republic would come from inside rather than outside Iran. The regime put one IRGC unit in every province (and two in Tehran) charged with keeping order in that province. What Western officials don’t know is whether those units are staffed by natives of the province in which they serve. The answer to that question would reveal whether ideology trumps kinship if given the order to fire on crowds.

In other words, will Iran 2018 be Romania 1989 where the security forces switch sides and bring down a dictatorship? Or China 1989, where they hold firm and massacre their fellow citizens?

4. Western journalists don’t have a clue. The Islamic Republic uses its strict visa regimen to control Western journalists. It requires that Western journalists hire regime fixers and keeps Western newspaper correspondents and the occasional television reporter in Tehran. Many Western correspondents, especially those who speak Persian (Farsi), play along.

Northern Tehran is more cosmopolitan and upper middle class than working class southern Tehran or the West Tehran neighborhoods where many IRGC veterans live. In northern Tehran, from Vanak up to Tajrish and Niavaran, there are nicer restaurants, swankier cafes and shops, more intellectual bookstores, more trees, and nicer apartments.

The problem is that reporting from northern Tehran about the political goings-on in the rest of Iran is like reporting on Watertown or Geneseo, N.Y., from the Upper West Side of Manhattan; or reporting on Emporia or Roanoke, Va., from Georgetown. While some journalists do have agendas, others are professional and do know what’s going on. But if they’re unwilling to sacrifice their access, they are effectively becoming tools of Iranian propaganda.

5. Iranian statistics are nonsense. That brings us to Iranian statistics. One of the ironies of political journalism is the same newspaper editors in the United States who will pour over and rightly debate myriad statistics and demographics don’t hesitate to take statistics provided by dictatorships at face value.

Did Iranians really flock to the polls in their 2017 presidential elections? The Iranian government placed voter turnout at around 70 percent. That’s what American newspapers published. But Iranians from the provinces placed turnout closer to 15 percent. Want to understand what Iranians think about their government? Lesson one is this: Don’t take the word of a dictatorial regime.

6. This could be a dry run to the Islamic Republic’s demise. Not even the most expert academic or analyst has a crystal ball. Too often, wishful thinking and advocacy pollute good analysis. The protestors have proven resilient, but whether because of greed or ideology, neither the Supreme Leader nor the IRGC are willing to call an end to Khomeini’s experiment.

But what happens when the Supreme Leader is dead? Ali Khamenei not only had cancer, but he allowed himself to be photographed receiving treatment in order to prepare the Iranian public for the inevitability of transition. It’s not clear, however, that such a transition would be smooth or quick. Even if the IRGC rallies to the defense of the regime now, what happens after Khamenei dies? How would they act when they have no supreme leader to rally around?

If the regime recovers—its legitimacy already wounded—don’t be surprised if Khamenei’s funeral sparks celebration and anti-regime protests rather than mourning and commemoration.

Can South Korea Avoid Getting Played by the North? - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 01/08/2018 - 21:55

The talks set to open this week between the North and South Korean governments are off to an inauspicious start: Even before negotiators could settle into their seats, the North had pocketed its first concession from the South, offering nothing in return.

North Korean negotiators are practiced hands in the art of “we win and you lose” deal-making. Unless the team of President Moon Jae-in of South Korea has the fortitude to stand up to such ploys and has a solid game plan of its own, there is a serious risk that the South, its allies and much of the international community will come out of these apparent peace overtures even less secure than before.

The upcoming North-South dialogue was decreed by Kim Jong-un in his New Year’s Day address, after two years of brushing off diplomatic feelers from Seoul. Mr. Kim declared that now — as in, right now — was the time for the two sides to meet to “improve the relations between themselves and take decisive measures for achieving a breakthrough for independent reunification without being obsessed by bygone days.” Seoul rushed to accommodate Mr. Kim’s timetable.

The North’s sudden move ostensibly is explained by its desire to participate in the Winter Olympics next month, which will be hosted in South Korea. But those games were awarded back in 2011, and Mr. Kim’s New Year’s speech is an important annual ritual, prepared and polished months in advance.

By springing this surprise right before the start of the event, the North imposed a hurried and artificial deadline for results. This is “we say jump, you ask how high” diplomacy in action — which is effective for showing who is in control of the negotiation process. Sometimes it also pushes adversaries into making unforced errors.

The South Korean government, in its haste to make ready for dialogue with the North, almost immediately wrong-footed itself. It pre-emptively proposed delaying the joint annual United States-South Korean winter military exercises until after the Games. (Washington acquiesced after high-level consultations.) Seoul may have intended this gesture in the spirit of good will or magnanimity, but it sent all the wrong signals — including a willingness that may be read as weakness, and could harden Pyongyang’s posture, raising its expectations for what it might be able to take back home. The South Korean government, in other words, is off to a bad start, at least tactically.

As far as strategy goes, it is absolutely critical for Seoul — but also for the international community — to understand what may be the calculations underlying Mr. Kim’s move. In particular: Why did he propose talks with only South Korea? And why now?

The simplest interpretation may be that Pyongyang regards South Korea as the weakest link in the gathering global campaign to pressure North Korea to denuclearize.

In 2000, their first major proponent, the former president and Nobel Peace laureate Kim Dae-jung, secretly and illegally paid Kim Jong-il, North Korea’s leader at the time, hundreds of millions of dollars to secure a summit. Roh Moo-hyun, the next South Korean president, later strained relations with the United States by trying to take on a balancing role between Washington and Pyongyang — playing arbiter, in other words, between the ally committed to Seoul’s military protection and the regime committed to Seoul’s destruction.

To his credit, in his short time in office Mr. Moon — who, by the way, was one of Mr. Roh’s top advisers during those troubled years — has leavened his own sunshine yearnings with a strong dose of realpolitik. He has pushed for missile defense, for example, as well as for close coordination over international sanctions with the United States despite new strains with President Trump. Last week, Mr. Moon is reported to have said of the upcoming talks with North Korea, “I will not just naïvely push for dialogue as in the past.”

Still, Pyongyang seems to have kept in reserve the option of going on a charm offensive with him. It has already dismissed President Trump as a “dotard.” It called Barack Obama a “wicked black monkey.” It cursed Park Geun-hye, the previous president of South Korea, as an “old, insane bitch.” But it has had nothing bad to say about Mr. Moon (yet).

Meanwhile, the urgency of the North’s diplomatic drive can be explained by both recent wins and menacing losses ahead. Over the past several years, Pyongyang has tested atomic bombs — and, it claims, one hydrogen device — and has launched intercontinental missiles. According to Mr. Kim, the United States mainland is now “within range of our nuclear strike” and his defense sector is moving to “mass produce” nuclear warheads and ballistic missiles.

All the same, the North’s military rests on an economic base that is not only tiny, but also notoriously dysfunctional and desperately dependent on foreign resources and so uniquely vulnerable to serious sanctions. The United Nations Security Council has voted for new and potentially crippling penalties. China — North Korea’s main financial backer — appears finally ready to reconsider, and reduce, its support.

To date, at least by outward appearance, the North Korean economy has not been much fazed by international sanctions. But we do not know how fast the North is spending down its reserves. Only Mr. Kim does.

If Mr. Kim is indeed in a race against the clock to forestall economic disaster at home, importuning Seoul to help lift (or at least ignore) international sanctions, relax nuclear counter-proliferation efforts and revive sunshine economic programs could be the most expeditious way to get out of a bind.

So how can the Moon administration avoid getting played? First, by recognizing the North’s ulterior goals in these talks, and the other traps it may be readying. Then, by insisting ruthlessly on a quid pro quo at every step — requiring, for example, that if Seoul postpones military exercises, then Pyongyang should too. And finally, by tucking a few tricks up its own sleeves.

Mr. Kim says he wants more contact between the North and the South? Insist on it, including by requiring that news from South Korea be allowed to reach the North. Don’t shy away from raising unpleasant topics, like North Korea’s appalling human rights situation, and calling for it to cooperate with the existing United Nations commission of inquiry. And why not confidentially mention that a large majority of South Koreans now seem to favor hosting United States tactical nuclear weapons to counter the North’s new threats?

South Korean negotiators are not used to turning the tables on their North Korean interlocutors, but they should start.

The Impact of Federal Housing Policy on Housing Demand and Homeownership: Evidence from a Quasi-Experiment - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 01/08/2018 - 21:48


Federal housing policy promotes homeownership by subsidizing mortgage debt for many households with few assets and low credit scores.  In this paper, we exploit the Federal Housing Administration’s (FHA’s) surprise 50 basis point cut to its annual mortgage insurance premium in January 2015 to study the impact of federal housing policy and interest rates on housing demand for a population of households likely to be influenced by changes to policy.  The premium cut, which reduced monthly payments the same amount as a three-quarter percentage point drop in the mortgage rate, increased the purchasing power of the typical FHA borrower by 6 percent.  Our analysis suggests FHA borrowers increased the value of the housing they purchased by 2.5 percentage points relative to a control group of borrowers for whom policy did not change.  FHA buyers did not significantly change the quality of their housing.  Instead, the rise in spending reflected an increase in constant-quality home prices directly resulting from the premium cut.  We also estimate that the premium cut induced approximately 17,000 households to become first-time homebuyers in the initial year after the cut.  Given the rise in house prices due to the change in policy, non-FHA first-time buyers as a group incurred a cost of $180,000 for each of the 17,000 new first-time FHA buyers.

Read the full PDF here.

CFIUS and China: The MoneyGram case and beyond - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 01/08/2018 - 20:42

My AEI colleague James Pethokoukis wrote a blistering column last week decrying the Trump administration’s “foolish economic Cold War with China.” The specific object of his ire was the decision to block the sale of MoneyGram, a Dallas-based money transfer company, to Ant Financial, a money transfer company controlled ultimately by Jack Ma, the Chinese tycoon who owns Alibaba.

The MoneyGram logo is seen on a kiosk in New York, U.S. January 3, 2018. REUTERS/Shannon Stapleton

While I agree with the critique of this action and have been in the forefront of attacking Trump’s moves to “stifle trade,” there needs to be additional context added to the MoneyGram decision. First, the Trump administration’s action does not come out of nowhere and is not just another example of this president’s particular folly. Under President Obama, the US had begun to signal a harder line on Chinese investment. Obama blocked the Chinese takeover of a semiconductor company, and just before leaving office directed the indictment of Chinese officials in connection with cyberattacks and theft of intellectual property. Further, with regard to overall Chinese investment and with regard to the MoneyGram deal specifically, there is large and growing bipartisan congressional pressure to clamp down (see below). Congressional critics of the MoneyGram deal have charged (falsely) that vital security information from US military personnel could be compromised with the deal.


Second, while Pethokoukis argues correctly that in this case the financial information required “is about what you hand over when signing up for a fitness gym,” other and larger proposed financial deals may involve much more detailed financial information — for instance, Chinese companies’ takeover deals encompassing investment planning, insurance, hedge funds, or commercial mortgage lending. Indeed, there are several more complicated financial services cases now pending before The Committee on Foreign Investment in the United States (CFIUS), including a $2.6 billion bid by the Chinese company Oceanwide Holdings for the insurer Genworth Financial Inc., and the purchase of the US hedge fund SkyBridge Capital LLC., by the Chinese firm, HNA Group.

Further, these recent events highlight the problems of utilizing the CFIUS process for making new or expanded policy decisions regarding foreign direct investment (FDI) in the US. CFIUS by statute cannot discuss the details behind any of its individual findings and actions. Thus, in this instance and others, we are left in the dark about US policy. What are the boundaries for blocking investments that involve the financial data of US citizens? Do these restrictions apply to all foreign companies — or only to Chinese companies? Beyond the legal technicalities, what are the implications for US efforts to open the closed Chinese financial markets to competition from US and other foreign multinationals? Will reciprocal Chinese personal data regulations also block US companies from establishing a presence in China?

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Finally, it should be noted that Congress is moving to create additional potential barriers to future FDI in the US, through new amendments to the CFIUS process. Though Sen. John Cornyn (R-TX) is sincerely committed to an open investment policy for the US, his bill (which is the major legislative vehicle for CFIUS) would greatly expand — and hugely complicate — the criteria by which foreign investment proposals are evaluated. Specifically, the bill will expand potential scrutiny by CFIUS beyond mergers and acquisitions to joint ventures and other commercial arrangements between US and foreign firms. This will result in a huge increase in the number of transactions to be judged, and almost certainly stretch the capabilities of the CFIUS staff beyond its current (and future) competence.

Cornyn’s bill will also represent the first time the US government has undertaken the regulation of outward investment, as opposed to inward investment by foreign companies. The aim is to allow the US government to reach more subtle and sophisticated Chinese investment with US companies, particularly start-ups. The problem (and again as above) with using CFIUS as a vehicle for policy changes is that while aiming at Chinese companies, the reach of CFIUS is far wider. It will have a great impact on the much greater universe of FDI from the real major investors in the US — England, the Netherlands, France, Germany, and Japan are major examples. Congress should carefully weigh the unintended negative consequences of proposed CFIUS changes before taking this momentous step.

James Pethokoukis got it dead right on MoneyGram, but the issues spread far beyond this one action.

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The 2010s look more like Trump’s ideal America than Obama’s - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 01/08/2018 - 20:17

One of my favorite Christmastime presents is the Census Bureau’s end-of-the-year release of its annual population estimates for each state. Comparison of the April 1, 2010, Census enumerations and the June 30, 2017, estimates for the states shows how each state fared in the Obama years since this period includes 82 of the 96 months of the Obama administration and only five months of the Trump presidency.

Who are the big population gainers? Some small units: the District of Columbia at 15 percent (big government, gentrification), North Dakota at 12 percent (fracking, which liberals failed to stop), Utah at 12 percent (1950s-style high birth rates).

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Those with the largest impact, however, are Texas at 13 percent and Florida at 12 percent. Together, their population increase was 5.3 million, nearly one-third of the national total. Why? No state income taxes, light-touch regulation, and the resulting private sector booms. Immigration? Not so much this decade, with their 1.6 million immigrants outnumbered 2-1 by 3.5 migrants from other states.

Three states actually lost population. Two are small and easily explainable. West Virginia, minus 2 percent: Obama’s war on coal. Vermont, minus 1 percent. Woodstock-era migrants — Bernie Sanders, Howard Dean — liberalized the state’s culture and politics. But with high taxes and stringent environmental bans, no one is following.

The third loser is Illinois, minus 0.3 percent. It takes some doing to get people to flee one of mankind’s greatest artifacts, Chicago. But Michael Madigan, Speaker of the Illinois House for all but two years since 1982, has proved up to it.

High and rising taxes, to pay for hugely underfunded public pensions, have done the trick. Net domestic outmigration from Illinois in 2010-17 was 642,000, more than any other state but New York’s 1,022,000.

The nexus between high taxation and domestic outflow is plain when you look at percentages. Domestic outmigration was 5 percent of 2010 population in Illinois and New York, 4 percent in New Jersey and Connecticut (which General Electric left behind for the former Taxachusetts, which cut taxes sharply in the 1990s). In only three other continental states was outmigration more than 2 percent.

Domestic inflow was 4 and 5 percent of 2010 population in Texas and Florida, and also in the Pacific Northwest and five Mountain states (Colorado, Nevada, Arizona, Idaho, Montana). It was even higher, 6 percent, in North Dakota and South Carolina.

In the first decade of this century, up to the 2007-09 recession, it was widely observed that foreign immigration was spreading from its initial foci — California, Texas, New York, Florida — to other states, especially in the South. That trend seems to have been petering out in 2010-17.

Nationwide, immigration in these years was 2.3 percent of 2010 population, lower than during the 1982-2007 surge. And in only 12 states and D.C. was that rate above the national percentage.

This reflects the 2008-14 halt in net immigration from Mexico. States that used to get many Mexican immigrants had only slightly above average immigration rates, 3 percent in California and Texas, or were below average, 1.7 percent in Illinois. Immigration rates were below the national average also in Nevada and Arizona, immigration magnets before 2008.

Higher immigration rates were registered in Florida, at 5 percent the nation’s highest, and in states clustered around New York, Boston, and Washington: 3 to 4 percent in Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Maryland, and Virginia, with D.C. at 5 percent.

Florida’s gains reflect immigrants from Latin America south of Mexico, but the others represent increased immigration from Asia, which in recent years has produced more arrivals than Latin America — a reversal of the 1982-2007 trend. Increased Asian immigration is reflected also in the above-national-average immigration rates in Hawaii and Washington state.

Census data show Asian concentrations in university communities and medical centers. Of course, not all Asian immigrants are high-skilled techies or M.Ds, but overall the immigration inflow in the 2010s has been more high-skill and substantially less low-skill than before.

All of which suggests a counterintuitive hypothesis: The patterns of internal and immigrant migration of 2010-17 looks less like Barack Obama’s ideal America and more like Donald Trump’s.

The flight from high-tax to low-tax states, diminished by higher-skill immigration, the fracking boom in North Dakota, and the decline in hip Vermont: You might even say Trump started winning even when Obama was still in office.

‘Chaos’ puts Trump just where the GOP wants him - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 01/08/2018 - 20:09

“Fire and Fury,” Michael Wolff’s book about the Trump White House, elicited from its subject exactly what its title promises.

The scorched-earth attack on Wolff was probably a strategic error. Trump’s initial statement on the book did not treat it as a collection of lies. Instead, the president took the book seriously, lashing out at former adviser Steve Bannon’s remarks in it.

His attack on Bannon as an incompetent lunatic raised the question of why Trump had appointed him to high positions in his campaign and administration in the first place — just as his later attacks on Wolff as a malicious fabulist raised the question of why he had allowed him nearly free rein in the White House. Trump’s reaction has tended to confirm Wolff’s overall portrait of a petty, ill-tempered and self-pitying president.

But even if Trump gave the book credibility, the harm it can do to him is limited. We didn’t need the book to spot these character traits in Trump, which have been as visible in the last two years’ news as his name is on his buildings. And the long-running debate over Trump’s fitness for office would probably be a little more productive without the book, which cuts enough corners to leave unclear which stories to believe.

Both sides are thus confirmed in their prior assumptions: It reinforces Trump’s opponents in their negative opinion of the president, and Trump’s supporters in their negative opinions of the media.

Because the main effect of the book is to freeze existing divisions, you could argue that on balance it is good for him. In an ordinary presidency, of course, saturation coverage of a book describing a White House mired in “chaos and dysfunction” would be a P.R. disaster. In this presidency, there’s a silver lining: It is binding the president closer to the Republican party.

Senate majority leader Mitch McConnell is delighted to see Trump sever his ties with Bannon. Bannon had sought to oust McConnell and to run primary campaigns against as many Senate Republican incumbents as he could, since the destruction of the existing party has been his goal. Republican establishment types would oppose Bannon bitterly, even if they agreed with his version of populist nationalism, which they don’t. If Trump is training his fire on Bannon, they will salute Trump as a font of wisdom.

One nagging problem remains: The Republican establishment’s agenda is unpopular, which is part of the reason Trump was able to defeat it during the 2016 presidential primaries. Bannon’s agenda of an infrastructure boom, protectionism and an immigration crackdown may be ill-considered in many respects, but it is more popular than the ideas of the congressional Republican Party and more coherent than anything Trump himself has to offer.

Bannon may have wanted to steer the White House in the wrong direction. He does, at least, have a sense that a direction is needed. Without it, all the administration has to give its supporters is more fire and fury.

National Housing Market Index release for Q3 2017 - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 01/08/2018 - 19:36

The National Housing Market Index (NHMI) combines AEI Center on Housing Markets and Finance (CHMF) data on the federal agency market (Fannie Mae, Freddie Mac, Federal Housing Administration, Veterans Affairs, and Rural Housing Service) with data provided by First American via for the private side of the mortgage market and for cash and non-institutionalized lender sales. CHMF and First American both provide data for the top metropolitan areas. The combined data set covers nearly 100% of the national volume. To account for the small amount of incomplete data, housing data are scaled to estimate total market volume.

National housing market demand continued to surge and the national housing market index (by count) stood at 121 in 2017:Q3. This compares to 114 in 2016:Q3 and 110 in 2015:Q3. On an annualized basis, 6,160,000 sales transactions were reported, which is up 490,000 transactions, or 8.6%, from a year earlier.

Other key takeaways include:

  • The national home purchase market continued its rally in 2017:Q3. Sales transactions increased 6.2% in the third quarter compared to a year ago, marking the 12th consecutive quarter of such increases.
  • This rally came despite a 6.3% jump in national house prices during that period. This quarter’s briefing offered an outlook for house prices in 2018 and prospects for a continuation of the home price boom, now going on 5 1/2 years. We will also look at the impact of tax reform, the historically low levels of supply, and changes to loan limits taking effect on January 1, 2018.
  • In September, Freddie’s share of the GSE purchase business surged to 45%, a record level for the series and up from 37% a year earlier. The briefing provided details and explanations on this stunning development given that Freddie’s risk level relative to Fannie has declined over the same period.
  • With talk about GSE reform heating up in Washington, this briefing laid out a guiding principle for the government’s involvement in the housing market — to help low- or moderate-income families buy homes. An evaluation of the GSE’s business shows that only about 10% of their business meets this simple test. Further, that help must be both sustainable and build wealth.

View the entire release on the International Center on Housing Risk website

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