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Kavanaugh may restore separation of powers - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 07/16/2018 - 22:00
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Judge Brett Kavanaugh’s nomination to the Supreme Court involves something more important than social issues. His confirmation is likely to strengthen the court’s support for the Constitution’s separation of powers.

To protect the liberties of the American people, the framers designed a constitution that separated the three branches of government. Congress was to make the laws, and the president to enforce them—preventing a concentration of power that could turn tyrannical. The judiciary’s unique responsibility was to keep the elected branches within their assigned roles. But since the 1930s the courts have largely failed that test. In some cases, with the courts’ acquiescence, Congress has delegated legislative authority to executive-branch agencies. In others, agencies asserted powers Congress had not conferred.

In Chevron v. NRDC (1984), the Supreme Court directed federal judges to defer to agencies’ interpretations of their own statutory authority if they were “reasonable.” That, in effect, allowed administrative agencies to displace Congress as America’s primary lawgiver.

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During his 12 years on the U.S. Circuit Court of Appeals for District of Columbia, Judge Kavanaugh has been an advocate for restoring the power of Congress. In U.S. Telecom v. Federal Communications Commission, he dissented from a 2017 ruling that upheld the “net neutrality” rule (which the FCC later repealed). He argued that for decisions as important as this, agencies could not simply find new authority in an existing law. “If an agency wants to exercise expansive regulatory authority,” he wrote, “an ambiguous grant of statutory authority is not enough. Congress must clearly authorize an agency to take a major regulatory action.”

In practice, ‘fair trade’ = protectionism - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 07/16/2018 - 21:43

The quotation below is from the introduction to the book Fair Trade Fraud: How Congress Pillages the Consumer and Decimates American Competitiveness by James Bovard, who observed that complaints about unfair trade and calls for fair trade were at a historic high in 1991 when the book was published. Well, it’s now more than a quarter-century later, and I would say that complaints about unfair trade today and calls for fair trade, thanks to the Mercantilist-in-Chief, have far surpassed any previous historic level of complaints  and calls by at least several orders of YUGENESS.

Though complaints about unfair trade are at a historic high, American protectionists have always found some moral pretext to denounce imports. In the 1820s, protectionist proclaimed that trade between England and America could not be fair because England was advanced and America was comparatively backward. In the 1870s, protectionists announced the trade between America and Latin America could not be fair because America was comparatively rich while Latin America countries were poor. In the 1880s, protectionist warned that trade could not be fair if the interest rate among the trading nations differed by more than 2%. In 1922, Congress effectively defined “unfair competition” as any foreign cost of production advantage that existed for any reason on any product.

The myth of fair trade is that politicians and bureaucrats are fairer than markets – that government coercion and restriction can create a fairer result than voluntary agreement – and that prosperity is best achieved by arbitrary political manipulation, rather than allowing each individual and company to pursue their own interest. In practice, fair trade means protectionism. Government cannot make trade more fair by making it less free.

MP: From my experience, I totally agree with James Bovard that complaints about unfair trade and clamoring for fair trade are always accompanied by a call for some type of protectionist trade policy to make international trade “more fair.” So Yes, in practice, fair trade means protectionism.

Discussing President Trump’s management of the summit with Putin: Pletka on BBC’s ‘Beyond 100 Days’ - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 07/16/2018 - 18:03
President Trump raises uncomfortable issues with the Russians, but they serve his political interest in the "witch hunt" rather than stand for American interest.

The US does poorly on yet another metric of economic mobility - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 07/16/2018 - 17:39

The concept of economic mobility is relatively simple to grasp. Over the course of a lifetime, can people move up the rungs of the income ladder? Are children doing better than their parents when it comes to standards of living? How do we help people access opportunities that we know can make the climb easier? The questions come easily to us, but the solutions, not as much. The challenge is even tougher when we are talking not of one city, state or country, but for multiple countries around the globe. To be precise, a new report from the World Bank tracks 148 countries, with 96 percent of the world’s population, to answer the age-old question of how much economic opportunity and upward economic mobility a country really offers its citizens. This is a tremendous effort. To put it in context, we are still absorbing the results of the first comprehensive study on U.S. economic mobility that was released in 2017. Now, we can compare not only how the U.S. fares on mobility, but how developing countries in Asia and Africa are doing relative to the U.S. The results are striking.

@tnewevo.tt via Twenty20

Rather than using the more traditional metric of income, this study uses educational attainment as the basis for defining upward mobility. Absolute upward mobility refers to the ability of children to “out-learn” (my term) their parents. For example, if the parents only completed secondary school, but the children completed tertiary schooling, that would reflect absolute upward mobility. Relative mobility refers to the ability of children to do better than their peers compared to how the parents did relative to their own peers. In other words, if the parents were in the bottom quartile of educational attainment within their cohort, but the children were in the middle or upper quartile, that would reflect relative upward mobility.

Using data from a new Global Database of Intergenerational Mobility (GDIM) and comparing developing countries to high-income countries, the gap in absolute mobility appears to have narrowed. Using the 1980s cohort for both sets of countries, the Global database shows that 57 percent of children in high-income countries “out-learned” their parents. The corresponding number for the developing countries was 47 percent. This gap is nearly 10 percentage points lower than it was for the 1940s cohort for each group of countries. So absolute mobility appears to be converging.

But the problem is the reason for the convergence. The gap is narrowing not because developing economies are doing better today than they did before, but, in fact, because high-income economies are doing much worse than they were doing earlier. In addition, progress in mobility has stagnated at a much lower level of educational attainment for developing economies than for the average high income economy. Developing economies today have levels of educational attainment that are similar to where high income countries were 40 years ago. Even within developing economies, there is a great deal of variance. For the 1980s birth cohort, the study finds that only 12 percent of adults had more education than their parents in Sub-Saharan Africa, relative to more than 80 percent of adults of that same generation in the East Asia region.

Comparing the education metric to the income metric is important as well. Is education really a good proxy for income when we measure mobility? How well correlated are those two variables? After all, as the study notes, while gender gaps in educational mobility have reversed since the 1960s with girls acquiring higher levels of education than boys, this has not necessarily translated into higher income mobility for women. From an intergenerational perspective, it makes sense that education and income would trend in the same direction. Research shows that people with higher education levels typically have higher levels of income. Moreover, parents with financial resources are better able to invest in their children’s education, leading to persistence in incomes and education levels across generations. Even aside from investments in education, intergenerational mobility can be higher for those growing up in higher income households because of parental traits, access to good nutrition, childcare, and more stability in household settings. That is a big reason why intergenerational economic mobility is persistent. And there is a greater likelihood that children born into a certain quartile of the income distribution are more likely to stay there.

So what does the picture look like for the US? We know from work done by Raj Chetty and others using income to measure mobility, that absolute upward economic mobility has been declining since the 1940s. For children born in the 1940s, more than 90 percent were earning more than their parents. Today, that number has dropped to 50 percent. The figure below documents that decline.

Doing a similar analysis using the new World Bank data for educational mobility for the U.S., there is an unfortunate similarity. The chart below shows the average probability that a child in a particular birth cohort will attain higher education credentials than their parents. In the 1940s, the average probability was close to 70 percent. For the 1980s cohort, that number has dropped to below 45 percent.

In addition, the probability that kids with parents from the bottom half of the education ranks will “out-learn” their parents and reach the top education quartile is shown below. This probability, known as the poverty-to-privilege rate, has been declining over time as well.

The map of global economic mobility shows pockets of hope and pockets of concern. Thirteen of the fifteen least mobile countries globally are in Sub-Saharan Africa and South Asia, while some of the most mobile economies are in Western Europe, Canada, Australia and Japan. But the divisions are not clear cut. The threat to economic mobility exists even in developed, high-income countries such as the United States. The U.S. is one of only four high income economies amongst 50 economies with the lowest rates of relative upward mobility. While the problems in each country are unique, many solutions are universal. The report highlights much needed investments in early childhood through subsidized childcare and paid leave, nutrition programs, good quality public education programs and schools, improved occupational networks and labor market interventions such as employer tax credits to employ younger workers. But it also points to a new, and often overlooked, factor: the role played by aspirations, both of the parents and the children themselves, and the link between aspirations and mobility. In Mexico, for instance, among youth between the ages of 12-22, those who had higher aspirations for mobility were far more likely to stay in school and exhibit better behavior more generally, particularly in relation to health. Similar findings were reported in a diverse group of countries, such as India, Vietnam, United Kingdom, Pakistan and in the Dominican Republic as well. Perhaps not surprisingly, believing in the dream of upward mobility is critical to achieving it.

Policymakers have a simple mandate to making progress on this issue. Take real, practical actions to make that dream come true for people worldwide.

Janus v. AFSCME: Can teachers unions be saved? | WHAT IF - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 07/16/2018 - 14:24

Will the Supreme Court’s decision in Janus v. AFSCME end teachers’ unions? Well, probably not. But the public sector union landscape is going to change a lot, especially for teachers. AEI’s Nat Malkus explains.

Read the report:

China’s economy: Fake news and good(?) news - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 07/16/2018 - 14:03

China often complains that the US and our friends, or whatever’s left of them, give it no say in making global rules. Beijing argues the very language used is biased toward rich countries.

China’s National Bureau of Statistics (NBS) is fighting back. It took on an important term in international relations and crafted such a perfect illustration that the word has new meaning. In outlining economic results for the first half of 2018, the NBS proudly noted real GDP growth has stayed “within the range between 6.7 percent and 6.9 percent for 12 quarters consecutively.”

It thus redefined the word shameless.

China’s Finance Minister Liu Kun attends a session of the New Development Bank third annual meeting in Shanghai, China May 28, 2018. REUTERS/Aly Song

In late 2015 and early 2016 when capital was pouring out of China and the economy may have contracted outright — GDP gained between 6.7 and 6.9 percent. In early to mid 2017, when growth was much faster on every independent metric — between 6.7 and 6.9. And in the first half of this year, which is not at all like the other two periods — between 6.7 and 6.9.

If you didn’t get the message, Chinese industrial production grew 6.8 percent in the first quarter of 2018 and 6.7 percent for the first half. Services grew faster than that but also slowed one-tenth of a percent. Consumer prices rose 2.1 percent in the first quarter and 2.0 percent the first half.

Nominal growth in per capita disposable income slowed by the same one-tenth of a percent but real growth in per capital disposable income diverged wildly from this pattern. It stayed exactly the same in the first quarter and the first half. Do not be alarmed, citizens, EVERYTHING IS STABLE.

That settled, the NBS went on to imply developments which might actually be meaningful, if honestly reported. In the first quarter, it followed long-standing practice and offered retail sales as a consumption benchmark.

But last night’s announcement led with per capita consumption expenditure, a better measure whose continued use would be helpful. The question is whether it was trotted out only because retail sales are slow by historical standards.

Speaking of historically slow, investment growth hit multi-decade lows in the first half. Private investment outpaced overall investment. So did capital expenditure in agriculture, manufacturing, services, and real estate.

The dead weight was “non-manufacturing industry.” Looking deeper, this included railway and water transport, non-ferrous metal mining, textiles, and financial intermediation. China badly needs outright disinvestment in many sectors. If these lower-profile figures are accurate, it’s a welcome shift.

Record-low growth was recorded through June for broad money, M2. (Don’t worry about all the record lows — “between 6.7 and 6.9.”) The result is consistent with deleveraging, or borrowing less to spend less. This would also be welcome, since far too much debt was run up 2009–17.

Unfortunately, there’s a directly contradictory signal. Bank lending rose 12.7 percent through June, much faster than nominal GDP or almost anything else. Leveraging through banks is still increasing, at a fairly rapid pace.

One way to reconcile the results is Beijing’s attempt to take lending away from “shadow” financials and give it back to the state banking system. Bank lending could be quicker while other lending plunges. But it’s a bit puzzling that such formalization would cause overall money growth to ease.

Pulling assets and liabilities out of shadow finance should tend to make measured money stock larger. The explanation may be that money stock has been mis-estimated, which would undercut evidence for deleveraging. Or M2 may simply reflect slower economic activity, making the GDP series even less credible.

It’s always wise to look below China’s headline economic figures. In the second half of this year, best to focus on components of money supply and bank credit.

Learn more:

US has 99 trade war problems, but inflation isn’t one - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 07/16/2018 - 13:53

As President Trump ratchets up the trade war with China and as he threatens import tariffs on European automobiles, there are many reasons to be concerned about intensified U.S. trade protection.

This is especially the case insofar as those actions might negatively impact both the U.S. and the global economic recoveries by returning the world to the “beggar-thy-neighbor” policies of the 1930s. However, increased U.S. inflation should not be one of those concerns.

@RLTheis via Twenty20

To be sure, the direct impact of increased U.S. import tariffs might be to raise domestic costs and prices. However, there are important indirect effects from increased tariffs that might be expected to push down domestic U.S. costs and prices.

One might even expect that the indirect downward effects on costs and prices could more than offset the upward direct effects.

Those concerned about the inflationary impact of increased tariffs point to the increased cost of U.S. imports resulting directly from those tariffs. They also suggest that there might be a reduced degree of domestic competition as a result of a move to a more closed international trade system.

There are those who estimate that the combined inflationary effect of these two factors from the recent Trump import tariff increases to date could be as high as 0.6 percent.

Those worried about the inflationary impact of increased tariffs tend to overlook three indirect factors that could push U.S. costs and prices lower.

First, our trade partners are retaliating to our import tariffs by reducing their demand for some key agricultural products like soybeans and pork. This is pushing those prices sharply lower. Since March, when President Trump started intensifying protection, soybean prices have fallen by some 20 percent.

Second, and more importantly, increased U.S. protection is contributing to a slowdown in the Chinese and European economic growth by denting investor confidence in those economies. That in turn is being reflected in a generalized appreciation in the U.S. dollar and a significant drop in international commodity prices.

In this context, one would think that the 5-percent appreciation in the dollar and the 8-percent drop in international commodity prices since March would have a major moderating impact on U.S. inflation.

One might also expect additional dollar depreciation to occur in the period ahead as U.S. monetary policy becomes increasingly out of sync with that in Europe and Japan.

Third, an intensification of U.S. trade protection has the potential to slow U.S. and global economic growth. It could do so by increasing investor uncertainty, by disrupting global supply chains and by roiling global financial markets.

If such a cooling in the U.S. and global economies were to occur, one would expect that there would be a generalized deceleration in inflation. This would occur as employment got impacted and as the size of labor and product market gaps increased.

In short, the real reason to worry about an intensification of U.S. trade protection and the possible consequent drift to a global trade war is not that it will raise domestic inflation. Rather, it is that it has the potential of derailing both the U.S. and the global economic recoveries.

This is what occurred with the infamous Smoot-Hawley Act of increased U.S. import tariffs in the 1930s as the world economy drifted to beggar-thy-neighbor policies. Sadly, this is what could very well occur today with the Trump import tariffs.

Leadership Network: Midwest Summit - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 07/16/2018 - 13:00
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From October 17–19, 2018, we will host the AEI Leadership Network Midwest Summit at the Marriott Marquis in Chicago, Illinois. This gathering, which builds on the success of our national Leadership Network, will bring together talented state and local leaders from the worlds of business, non-profits, and public service for a series of conversations with AEI scholars on increasing opportunity in our country. After attending the summit, participants will become part of our Leadership Network—Midwest and will continue their involvement with AEI through virtual and regional programming.

What: A series of policy conversations with AEI scholars and national Leadership Network (LN) members on increasing opportunity in our country, training in effective messaging and communication, and opportunities to hear from and network with fellow leaders in the Midwest.

Where: Marriott Marquis. Click here to reserve lodging in our room block at the discounted rate of $220 per night (plus taxes).

When: The summit begins the afternoon of Wednesday, October 17, and concludes the morning of Friday, October 19, 2018. The deadline to register is August 31. We expect the summit to sell out, so please register ASAP.

Who: Talented mid-career professionals in business, non-profits, state and local policy, and community organizations from throughout the Midwest. We will gladly consider members from other states, especially if a summit will not be hosted in their region in the near future.

Why: To foster a dialogue on increasing individual opportunity in our country through the lenses of poverty alleviation, education, and economic growth.

How: The registration fee for the event (which covers all of your meals and materials) is $149.00. The room rate at Marriott Marquis is $220. Participants are expected to cover their travel and lodging and most are submitting it to their employers as a professional development expense. If that is an issue for you, AEI has funds available to assist. You can learn more about how to apply for a scholarship at this link.

Participation Costs:

  • Registration fee: $149.00, which includes all meals and conference materials.
  • Lodging at Marriott Marquis: $220 per night
  • Travel to and from Chicago

FAQs:

What is AEI's Leadership Network?

AEI's Leadership Network (LN) is a policy education and leadership development program for state-based, mid-career professionals in the private, non-profit, and public service sectors. LN members participate in a three-day summit in Washington, DC, focused on issues of poverty alleviation, K–12 education, free enterprise economics, and effective messaging, and then carry these conversations back to their communities through virtual and regional programming.

What is AEI's Leadership Network—Midwest?

Over the past three years, AEI's national Leadership Network has grown significantly, now numbering more than 500 members from 34 states. Yet we know there are thousands of other leaders across the country who should be part of this growing coalition to increase opportunity in our country. To make these connections possible, and to open up our programming to an even wider audience, we are bringing AEI to the states through the creation of regional networks in the Southeast, Mountain West, and Midwest. Our first Regional Network summit was held in Jacksonville, Florida, in October of 2017, and we are looking forward to hosting our Midwest summit this year. Participants in the AEI Leadership Network Midwest Summit will participate in a three-day ideas summit in Chicago followed by ongoing regional and virtual policy programming.

Which states are included in AEI's Leadership Network—Midwest?

AEI's Leadership Network—Midwest includes Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. We will gladly consider members from other states who would like to attend, especially if a summit will not be hosted in their region in the near future.

What are the benefits of being part of the Leadership Network—Midwest?

Regional LN members participate in a three-day ideas summit and receive ongoing virtual policy education, including monthly conference calls with AEI scholars and curated resource mailings. We also work with LN members on regional events and programs that help bring AEI to the states. Moreover, LN members benefit from joining an interdisciplinary network of talented professionals, and can connect with their fellow members both locally and across the country to partner on the causes that are most important to them.

Which policy areas does the AEI Leadership Network focus on?

AEI's LN programs focus on poverty alleviation, education policy, and free enterprise economics more broadly, especially with respect to the workforce and economic growth. We also include training on effective messaging and the importance of communicating with diverse audiences. These are our core issues because we believe they are particularly relevant for state leaders, but we often highlight other areas of AEI scholarship in our monthly conference calls and newsletters.

What is the profile of a regional Leadership Network member?

Ideal regional LN candidates are talented, ambitious, and open-minded state-based professionals in the private, non-profit, or public service sectors. They are dedicated to increasing opportunity for everyone in our country. They hold a diversity of opinions on politics and policy but have a deeply held commitment to and willingness to engage in the competition of ideas and are intrigued by arguments about how free enterprise can ensure human flourishing through earned success. While our national Leadership Network focuses on executive-level leaders in their 30s, 40s, and 50s, the regional Leadership Network includes a wider range of experience levels, including exceptional young professionals.

How much does it cost to participate in the Leadership Network—Midwest?

Regional Network members cover the cost of participating in the kick-off summit, including travel, lodging, and a small registration fee. A limited number of scholarships are available for candidates who are not able to have costs covered as a professional development expense through their employer and would not otherwise be able to attend.

Are there scholarships available to participate in the Leadership Network Midwest Summit?

A limited number of scholarships are available for candidates who are not able to cover costs of attendance personally, or have the costs covered as a professional development expense through their employer. To learn more about how to apply for a scholarship, read our financial assistance document here.

Discussing the opening statements of the US-Russia summit: Aron on CNBC’s ‘Squawk Box’ Part 2 - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 07/16/2018 - 12:15
By talking about the World Cup, President Trump exchangede a perfectly acceptable initial pleasantry.

Discussing America’s diplomatic relationship with Russia: Aron on CNBC’s ‘Squawk Box’ Part 1 - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 07/16/2018 - 12:00
Holding a summit between Russia and the US when there is nothing to agree on or sign only serves to bolster the leaders' support domestically.

From the archives: Helsinki then and now - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 07/16/2018 - 11:45

President Ford meets with General Secretary Leonid Brezhnev at the Soviet Embassy, Helsinki, Finland. August 2, 1975. Gerald Ford Presidential Library Archive

On July 16, Donald Trump and Vladimir Putin will meet in Helsinki, Finland. Another famous summit took place there in 1975, when President Gerald Ford and Soviet leader Leonid Brezhnev met and signed an agreement known as the Helsinki Accords. The Final Act recognized existing East-West boundaries in Europe and committed the 35 signatory nations to observe basic human rights. Ronald Reagan was critical of the Final Act when it was signed, but in a memorable speech during his presidency in 1988, he argued that the accords had set “new standards for conduct” in human rights. “For all the bleak winds that have swept the plains of justice since that signing day in 1975, the accords have taken root in the conscience of humanity and grown in moral … authority,” Reagan said.

Many people, including many at AEI such as Jeane Kirkpatrick and Michael Novak, helped in their writings and government service to keep the pressure on the Soviet Union to cement a linkage between human rights and foreign policy. In a speech at AEI’s World Forum in 2002, Natan Sharansky, who became a prominent political dissident and prisoner in the years following the Helsinki Accords, revisited those tumultuous time. He described the moment when he and his fellow prisoners, communicating by Morse Code, “knew that the days of communism would be defeated.” They had heard that Reagan had called the Soviet Union an “evil empire.” Sharansky was freed in 1986 and allowed to emigrate to Israel where he later became deputy prime minister. At a panel at AEI after the September 11th, 2001 terrorist attacks, he urged not to be content with immediate victories in the war in terror, but to work to secure the underpinnings of freedom and democracy. His 2002 speech at the World Forum analyzed the struggle between the world of democracy and the world of terror, a struggle that continues to this day.

To learn more about AEI’s Archive Project and to read recent blogs by Karlyn Bowman and Joseph Kosten, click here.

Why does California want to adopt India’s failed internet regulation? - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 07/16/2018 - 10:00

In 2015, US regulatory advocates attempted to implement full price controls on internet access and interconnection. While they did not succeed at the Federal Communications Commission, they and their counterparts did succeed in India, achieving a complete ban on flexible pricing. India outlawed and discounted offers, believing that they are harmful and discriminatory, a position confirmed by India’s telecommunications secretary as the world’s strictest policy. Now that this policy has been in place for three years, it’s appropriate to review its effectiveness.

Via REUTERS

Data from the International Telecommunications Union (ITU) on internet penetration provides preliminary insight. From 2009 to 2014, India’s rate of internet adoption (year-over-year growth) averaged 38 percent, but after 2015, it plummeted to 13.6 percent in the most recent measure. Only one in three Indians is online today, a ratio that hasn’t budged since the policy took effect. Had adoption remained at its previous rate, there could be as many as 400 million more Indian internet users today, almost doubling the number of people online in just four years. Of course, the rate of internet adoption has been slowing precipitously around the world because of lack of relevant content and the inapplicability of traditional advertising models to emerging markets. According to internet analyst Mary Meeker, the “easy growth” of internet adoption ended in 2015. But she notes India as the exception, suggesting that the country with 1.3 billion people could still adopt the internet quickly.

In addition to significant personal and social benefits, internet adoption is important because it improves economic growth. The World Bank suggests that every 10 percent increase in internet penetration in developing countries increases gross domestic product (GDP) growth by 1.21 percent. Had India not discriminated in favor of a single form of access, it could have improved its GDP by as much as $125 billion today. India’s mobile broadband prices are less than half of the world’s average, but for the poor in India, the effective price is two to three times higher because of the cost of a device and electricity.

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The value of flexible pricing is underscored by economist William Baumol in “Regulation Misled by Misread Theory: Perfect Competition and Competition-Imposed Price Discrimination” (AEI Press, 2006). (Jules Dupuit noted this as early as 1854; Google’s Hal Varian agreed in 1996.) Baumol shows that effective competition drives various price points in the market. Once a broadband network has been built, uniform prices prescribed by regulatory advocates deny the network operator the ability to recoup costs. In the real world, internet providers have no choice but to offer free and discounted options — the market demands it. While regulatory advocates like to invent concepts for regulatory prejudice, such as “zero rating” and “paid prioritization,” these are normal activities across the entire economy, and without them, there would be no market for telecommunications.

While India rejects more than a century of economic evidence favoring flexible prices, dozens of emerging countries have embraced free data mobile apps for basic communications, health, employment, and government services. These countries enjoy internet adoption rates significantly higher than those of India, now ranked at 143rd of 208 countries measured by the ITU for internet penetration. 1 World Connected, a project led by Christopher Yoo at the University of Pennsylvania, is evaluating over 700 projects for broadband adoption to produce evidence-based policy recommendations.

Regulatory prejudice will harm California’s poor and old

Internet penetration is 76 percent in the US. While this exceeds the world average of 51 percent, it falls short of many developed countries. According to the Pew Research Center, Americans aged 65 and older are least likely to access the internet. At least a third don’t connect for fear of online threats and a belief that the internet has nothing valuable to offer. Of California’s 40 million residents, some 5.5 million are 65 or older. Additionally, four in 10 Californians, including 135,000 homeless people, live at or near poverty. These groups — and some 10 million immigrants — would benefit tremendously from free data and differential pricing to access the internet. “Ending free internet data is particularly harmful to younger, low-income and minority Californians,” noted the California State Conference of the NAACP. Nevertheless, it appears that California Democrats want to prohibit such freedoms to please the digital elite’s preferred forms of internet access.

Like Indian legislation, the proposed California Internet Consumer Protection and Net Neutrality Act of 2018 bans flexible pricing for internet access. It also includes this ominous language: “Almost every sector of California’s economy, democracy, and society is dependent on the open and neutral Internet that supports vital functions regulated under the police power of the state.” There is no empirical evidence for this statement. Moreover, we should strongly reject the idea that the internet should be regulated by the “police power of the state,” which clearly violates freedom of speech.

There are serious legal issues for California to make its own internet policy, but as I explain in my forthcoming AEI paper “Tech Policy and the Midterm Election,” state policymakers do it for symbolic reasons, to win media attention, and to fundraise. Adopting India’s policy that unduly burdens two of every three people from getting online can’t be a good idea for California. Leaders should welcome economic instruments that make internet access more affordable and widespread. Promoting internet adoption will improve California’s economy and quality of life.

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Discussing the Trump-Putin summit: Pethokoukis on CNBC’s ‘Worldwide Exchange’ - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Mon, 07/16/2018 - 09:00
DeWitt Wallace Fellow James Pethokoukis discusses how President Trump traveling to Helsinki, Finland validates Putin's belief that Russia is a world power.

Get ready for summit with no agenda and calculated risks - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Sun, 07/15/2018 - 16:56

As the first “full” and “formal” meeting between American and Russian leaders since the one between Barack Obama and Dmitry Medvedev in 2010, the summit in Helsinki this week is long overdue and could be helpful in a number of ways. The subjunctive mood of “could,” however, is the key to the framework of this summit. It will be one of the very rare diplomatic events when heads of state meet without a fixed agenda.

As with any freewheeling exercise, it has a potential for both breakthroughs and calamities. The former is very unlikely, and the latter is real and dangerous enough to be guarded against. The last such “informal” summit between an American president and a Soviet or Russian leader was the disastrous meeting between John Kennedy and Nikita Khrushchev in Vienna in 1961, which led to the Cuban missile crisis 14 months later.

President Donald Trump and Russia’s President Vladimir Putin talk during the family photo session at the APEC Summit in Danang, Vietnam November 11, 2017. Reuters

This summit between Donald Trump and Vladimir Putin is without an agenda not only because there are no treaties or even agreements to sign, but because it lacks the default and almost ritual quartet of issues that have formed the skeleton of such meetings since at least the détente between Richard Nixon and Leonid Brezhnev almost half a century ago: arms control, nuclear weapons, energy, and terrorism.

Given the state of relations between the United States and Russia today, every one of these is issues is virtually moot because they run counter to Putin’s goals and Russia’s irrelevance to North Korea. Moreover, the two countries are diametrically opposed. While Russia is colluding with Saudi Arabia to jack up oil prices, the United States, which is emerging as a leading oil producer, is seeking to bring prices down.

As to joining forces against terrorism, former Secretary of State John Kerry’s incessant efforts failed spectacularly in Syria during the Obama administration. Former Secretary of Defense Ashton Carter admitted that Russia was not “of any help whatsoever” in fighting ISIS and instead decimated Western forces. To be sure, the American and Russian secret services appear to cooperate in individual cases, as Putin called to thank the United States for a tip that prevented a terrorist act in Saint Petersburg last year. But such “cooperation” is way below summit level.

What, then, is on each leader’s plate? Putin seeks to have the proverbial “cake and eat it too.” However, have no illusions, because at home he cannot afford any substantive “détente” with the United States. For the past six years or so, the dominant domestic propaganda narrative that is also the basis of his popularity has been America’s alleged “war on Russia.” Putin’s brilliance is in not only protecting the motherland but also restoring it to some of the glory lost in the collapse of the Soviet Union.

For Putin, the relationship with the West, especially the United States, is a zero-sum game. The West looks for “peace” and “better” relations, while Putin needs victories to bolster his regime during very bleak economic times. His overarching goal is a new “Yalta”: A real or imagined agreement between America and Russia followed by a geographical division into “spheres of influence,” which Putin, as an ardent Soviet patriot, would love to reconstruct. As for any Russian leader, an invitation to the White House would result in a huge domestic political boost.

As to Trump, his agenda seems to boil down to one thing, which is to succeed where Barack Obama and Hillary Clinton failed. His leitmotif seems to be “you could not handle Putin but I can.” It is here where the danger of the “informal summit” lurks. In his efforts to “manage” Putin, Trump may create an illusion that the United States is ready to meet Russia “halfway” on Crimea, on Ukraine, and on sanctions. By dangling a deal in front of Putin that he cannot possibly deliver because of fierce opposition from Congress, the American public, and almost certainly from his own top advisers, Trump may turn a merely hostile Putin into a disappointed Putin, who will be far more dangerous.

Sure, they do “speak Russian” in Crimea, as Trump noted at the G7 summit last month, implying that the peninsula’s annexation of Russia has legitimacy. But at least a quarter of Latvians and Estonians also speak Russian, and both countries are likely to be in Putin’s crosshairs. So anything implying an “understanding” by the United States of Russian efforts to pick up some of the geopolitical assets lost in the collapse of the Soviet Union could result in dire consequences.

Ditto for the other side of the negotiating table. If Putin succeeds in leading Trump down the proverbial garden path, and Trump later realizes that he has been had, this will result in a dangerous Trump indeed. In the end, then, the best possible outcome of this summit with no agenda is to do no harm. Meet, greet, shake hands, and pat each other on the back, with nothing toxic emanating in the days and months ahead.

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Leon Aron, Ph.D., is a resident scholar and director of Russian studies at the American Enterprise Institute. Born in Moscow and now in Washington, he has written more than a dozen books and papers on Russian politics.

The CD ‘chart of the century’ makes the rounds at the Federal Reserve - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Fri, 07/13/2018 - 22:11

Over the last 12 years, I’ve probably created and posted more than 3,000 graphics on CD, Twitter, and Facebook including charts/graphs, tables, figures, maps and Venn diagrams. Of all of those graphics, I don’t think any single one has ever gotten more attention, links, re-Tweets, re-posts, and mentions than the one above (and previous versions), which has been referred to as “the Chart of the Century.” Here are some examples from earlier this year for the version of the chart with price data through December 2017.

Just this week, the chart got some fresh attention this week when Bloomberg published an article on Tuesday titled “Chart of Century Gives Powell Gloomy Glimpse of Trade-War World,” with this opening:

A multi-colored graphic that’s made the rounds at the Federal Reserve hints at what Chairman Jerome Powell could face if President Donald Trump succeeds in throwing globalization into reverse: Higher prices for many goods and potentially faster inflation.

Plugged as possibly the chart of the century by economist and originator Mark Perry, it shows that prices of goods subject to foreign competition — think toys and television sets — have tumbled over the past two decades as trade barriers have come down around the world. Prices of so-called non-tradeables — hospital stays and college tuition, to name two — have surged.

That report was followed yesterday with a CBS MoneyWatch article “Inflation risks, trade war costs, make Fed’s job much harder.”

A chart that has been making the rounds at the Fed from economist Mark Perry shows how falling prices for trade-sensitive things like TV sets and toys have helped offset rising costs for things like medical services, housing and education.

Based on yesterday’s BLS report for CPI price data through June, I’ve updated the chart with prices for the first six months of this year. During the period from January 1997 to June 2018, the CPI for All Items increased by 57.4% and the chart displays the relative price increases over that time period for 15 selected consumer goods and services, and for average hourly earnings (wages). Seven of those goods and services have increased more than average inflation, led by hospital services (+216%), college textbooks (+204%) and college tuition (+191%). Average wages have also increased more than average inflation since January 1997, by 84%, indicating an increase in real wages over the last several decades.

The other seven price series have declined since 1997, led by TVs (-97%), toys (-74%), software (-67%) and cell phone service (-52%). The CPI series for new cars, household furnishings (furniture, appliances, window coverings, lamps, dishes, etc.) and clothing have remained relatively flat for the last 20 years while average prices have increased by 57% and wages increased 84%. Various observations that have been made about the huge divergence in price patterns over the last several decades include:

a. The greater (lower) the degree of government involvement in the provision of a good or service the greater (lower) the price increases (decreases) over time, e.g., hospital and medical costs, college tuition, childcare with both large degrees of government funding/regulation and large price increases vs. software, electronics, toys, cars and clothing with both relatively less government funding/regulation and falling prices. As somebody on Twitter commented:

Blue lines = prices subject to free market forces. Red lines = prices subject to regulatory capture by government. Food and drink is debatable either way. Conclusion: remind me why socialism is so great again.

b. Prices for manufactured goods (cars, clothing, appliances, furniture, electronic goods, toys) have experienced large price declines over time relative to overall inflation, wages, and prices for services (education, medical care, and childcare).

c. The greater the degree of international competition for tradeable goods, the greater the decline in prices over time, e.g. toys, clothing, TVs, appliances, furniture, footwear, etc.

MP: I’ll continue to update the price chart every six months, look for the next version in January 2019 with data through December 2018.

 

AEI’s Leon Aron on the danger of Trump and Putin’s ‘informal summit’ - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Fri, 07/13/2018 - 19:50

On Monday, President Donald Trump and Russia’s Vladimir Putin will hold their first one-on-one summit in Helsinki, Finland. Among other topics, President Trump and his Russian counterpart are expected to discuss Russia’s interference in the 2016 US election, an issue which President Trump told reporters at the NATO summit that he will “of course” raise. The pair is also likely to discuss the war in Syria, nuclear arms control, and Russia’s illegal annexation of Crimea, though the Kremlin has insisted the issue is not on the agenda.

Writing on the upcoming summit, AEI Resident Scholar and Director of Russian Studies Leon Aron criticizes Trump’s eagerness to succeed in diplomacy with Putin, even when he has little real power to make substantive promises. He writes:

  • Putin is seeking to have the proverbial cake and eat it too. Have no illusions: at home he cannot afford any substantive “détente” with the US. For at least the past six years, the dominant domestic propaganda narrative (and the basis of his popularity) has been America’s alleged “war on Russia” and Putin’s brilliance in not only protecting the motherland but also restoring to it at least some of the glory lost in the Soviet collapse. For Putin, the relationship with the West, especially the US, is a zero-sum game. The West is looking for “peace” and “better relations”—Putin needs victories to bolster his regime during very bleak economic times. … And as for any Soviet (or Russian) leader, an invitation to the White House would result in a huge domestic political boost.
  • As to Donald Trump, his agenda seems to boil down to one thing: to succeed where Obama and Hillary Clinton (especially Hillary!) have failed. “You could not handle Putin – but I can!” appears to be his leitmotif… In his effort to “manage” Putin, Trump may create an illusion in Putin’s mind that the US is ready to meet Russia “half-way”: on Crimea, on Ukraine, and on the sanctions. By dangling in front of Putin something that he, Trump, cannot possibly deliver domestically because of fierce opposition from Congress, public opinion (and almost certainly from his own top advisors), he may turn a merely hostile Putin into a disappointed Putin – who will be far more dangerous.

To arrange an interview with Leon Aron or Dalibor Rohac please contact AEI Media Services at mediaservices@aei.org or 202.862.5829.

Trump isn’t attacking NATO. He’s strengthening it. - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Fri, 07/13/2018 - 19:30

As President Trump put Germany and other allies on notice for the harm they are doing to NATO with their failure to spend adequately on our common defense, Democrats in Washington came to Germany’s defense. “President Trump’s brazen insults and denigration of one of America’s most steadfast allies, Germany, is an embarrassment,” Senate Minority Leader Charles E. Schumer and House Minority Leader Nancy Pelosi said in a joint statement.

President Donald Trump takes questions from the media during a news conference after participating in the NATO Summit in Brussels, Belgium July 12, 2018. Reuters

Sorry, Trump is right. The real embarrassment is that Germany, one of the wealthiest countries in Europe, spends just 1.24 percent of its gross domestic product on defense — in the bottom half of NATO allies. (The U.S. spends 3.5 percent of GDP on its military.) A study by McKinsey & Co. notes that about 60 percent of Germany’s Eurofighter and Tornado fighter jets and about 80 percent of its Sea Lynx helicopters are unusable. According to Deutsche Welle, a German parliamentary investigation found that “at the end of 2017, no submarines and none of the air force’s 14 large transport planes were available for deployment due to repairs,” and “a Defense Ministry paper revealed German soldiers did not have enough protective vests, winter clothing or tents to adequately take part in a major NATO mission.” Not enough tents?

To meet its promised NATO commitments, Germany needs to spend $28 billion more on defense annually. Apparently Germany can’t come up with the money, but it can send billions of dollars to Russia — the country NATO was created to protect against — for natural gas and can support a new pipeline that will make Germany and Eastern European allies even more vulnerable to Moscow.

Sadly, Germany is not alone. Belgium, where NATO is headquartered, spends just 0.9 percent of GDP on defense — and fully one-third of its meager defense budget is spent on pensions. European NATO allies have about 1.8 million troops, but less than a third are deployable and just 6 percent for any sustained period.

When Trump says NATO is “obsolete,” he is correct — literally.

This is not a new problem. I was at the Pentagon on Sept. 11, 2001, and vividly recall how, when it came time to take military action in Afghanistan, only a handful of allies had any useful war-fighting capabilities they could contribute during the critical early stages of Operation Enduring Freedom. At NATO’s 2002 Prague summit, allies pledged to address these deficiencies by spending at least 2 percent of GDP on defense and investing that money in more usable capabilities. Instead, defense investments by European allies declined from 1.9 percent of GDP in 2000-2004 to 1.7 percent five years later, dropping further to 1.4 percent by 2015.

Little surprise that when NATO intervened in Libya a decade after 9/11, The Post reported, “Less than a month into the Libyan conflict, NATO is running short of precision bombs, highlighting the limitations of Britain, France and other European countries in sustaining even a relatively small military action over an extended period of time.” An alliance whose founding purpose is to deter Russian aggression could not sustain a limited bombing campaign against a far weaker adversary.

President Barack Obama called NATO allies “free riders,” and President George W. Bush urged allies to “increase their defense investments,” both to little effect. But when Trump refused to immediately affirm that the United States would meet its Article 5 commitment to defend a NATO ally, NATO allies agreed to boost spending by $12 billion last year. That is a drop in the bucket: McKinsey calculated that allies need to spend $107 billion more each year to meet their commitments. Since polite pressure by his predecessors did not work, Trump is digging in on a harder line: On Thursday he suggested NATO members double their defense spending targets to 4 percent of GDP.

This is not a gift to Russia, as his critics have alleged. The last thing Putin wants is for Trump to succeed in getting NATO to spend more on defense. And if allies are concerned about getting tough with Russia, there is an easy way to do so: invest in the capabilities NATO needs to deter and defend against Russian aggression.

Trump’s hard line also does not signal that he considers NATO irrelevant. If Trump thought NATO was useless, he would not waste his time on it. But if allies don’t invest in real, usable military capabilities, NATO will become irrelevant. An alliance that cannot effectively join the fight when one of its members comes under attack or runs out of munitions in the middle of a military intervention is, by definition, irrelevant.

NATO needs some tough love, and Trump is delivering it. Thanks to him, the alliance will be stronger as a result.

The trouble with polling - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Fri, 07/13/2018 - 18:56

As political pundits and the general public prepare for the 2018 midterm elections this fall, it’s a safe bet that pollsters will undergo fresh scrutiny. Questions are still being raised about their performance in the 2016 presidential election, and the results from some major 2017 contests did little to allay those concerns. Few polls, for example, predicted the size of Virginia governor Ralph Northam’s nine-point victory last November. And in the special election last December for a U.S. Senate seat in Alabama, the final polls ranged from a nine-point victory for Republican Roy Moore to a 10-point victory for Democrat Doug Jones. Jones won by one and a half percentage points.

The problems of election polling aren’t limited to the U.S. The list of recent high-profile misses includes the elections in Britain and Israel in 2015, the Brexit referendum in June 2016, and the referendum on the Colombian peace deal with the Revolutionary Armed Forces of Colombia later that year. In France, pollsters gave presidential candidate Emmanuel Macron a substantial lead in the 2017 runoff. But according to CNN’s Harry Enten, not one of the 18 polls conducted in the final two weeks of the campaign predicted his landslide 32-point margin of victory. At 10 points, the gap between the two-week polling average and the actual results of the 2017 French election, Enten noted, was greater than it had been in eight previous presidential-election runoffs. All the final polls in the 2017 British general election, in which Prime Minister Theresa May’s Conservative Party lost its parliamentary majority, had the Conservatives ahead, though their margins differed significantly. And last November, polls overstated the vote of the first-round winner in Chile’s presidential contest.

These results demonstrate weaknesses that experts across the industry are working to address. On our shores, the highly respected American Association for Public Opinion Research (AAPOR) conducted a thorough post-mortem on the 2016 polls. Another exhaustive analysis by Will Jennings and Christopher Wlezien — which included more than 30,000 polls from 351 general elections in 45 countries, covering the years between 1942 and 2017 — acknowledged that the industry faces significant challenges, but concluded that there was “no evidence to support the claims of a crisis in the accuracy of polling.”

But there are other problems with the polls that go unnoticed by blue-ribbon commissions examining outcomes and methodology. The polling business has changed significantly in recent decades: There are more entrants, and there is more competition. Moreover, pollsters are deeply dependent on media coverage. Whether these developments have improved polling and deepened our understanding of the public is debatable. The issues the AAPOR committee examined are real, but other, more subtle changes reveal a chasm between pollsters and the public they observe, posing a threat to the credibility and usefulness of polls.

Read the full article in National Affairs. 

Pollsters and Supreme Court nominees: A little history - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Fri, 07/13/2018 - 18:06

Within minutes of President Trump’s announcement that he would nominate Brett Kavanaugh to serve on the Supreme Court, the emails began arriving, with groups supporting or opposing the nomination and claiming to have public opinion on their side. The advocacy campaigns began even before the nomination was announced. Axios reported that the Judicial Crisis Network spent $1 million on its “another great justice” campaign after Kennedy’s departure was announced. Immediately after the selection was announced, according to the report, the group planned to start running ads in key states in support of Trump’s pick. On the other side, Demand Justice plans to spend $5 million to oppose Trump’s selection. NARAL is already gearing up in response to the threat the group sees to Roe v. Wade. Since Franklin Roosevelt proposed enlarging the Court, pollsters have asked the public about the Court, but poll scrutiny of individual nominees is more recent.

The Hughes Court, 1932–1937. Front row: Justices Brandeis and Van Devanter, Chief Justice Hughes, and Justices McReynolds and Sutherland. Back row: Justices Roberts, Butler, Stone, and Cardozo. National Archives

In the late 1930s, survey pioneers George Gallup and Elmo Roper asked the first survey questions about the Supreme Court. They asked about President Franklin Roosevelt’s plan to enlarge the Court (opinion turned against it), whether a woman should be appointed to the high court (the answer was no), and whether justices should be required to retire at a certain age (the public said they should). The pollsters continued to ask questions about Court decisions, but they rarely asked about Supreme Court nominees.

The mid-1980s, with more pollsters in the field, appears to represent a turning point in the pollsters’ interest in the nominees. More than 150 questions were asked by pollsters who released their data publicly in 1987 about the nominations of Robert Bork and Douglas Ginsburg. Not only were there more questions than in the past, but many of them also had a less even-handed tone than earlier questions. The business didn’t always distinguish itself. In October 1987, in the Wall Street Journal, economist Milton Friedman and law school professor Gerhard Casper took Lou Harris to task for questions that purported to show that a solid majority opposed Robert Bork’s confirmation. In side-by-side presentations, they wrote their own versions of Harris’s questions which would likely have produced a different result for Bork. Harris responded in a letter to the editor of the Wall Street Journal by defending his practice of asking “projective questions” that “alternate a positive statement on a subject with a negative one.” One major pollster asked a question not about Ginsburg, but about his wife. Those who had heard of his nomination and knew that his wife had performed a few legal abortions early in her career were asked whether this was “enough of a reason by itself to keep him off the Supreme Court or not?” (Nearly nine in ten Americans said it was not.)

The advocacy group People for the American Way weighed in before Bork’s nomination was announced with a 1986 survey on the Senate’s role in the confirmation process and whether there should be litmus tests for a nominee. Reagan’s popularity was sky high in this poll (73 percent), but a larger majority (86 percent) wanted the Senate “to play an active role in reviewing nominees.” When asked about some recent decisions, 74 percent said they supported the “decision that leaves the choice on abortion mainly up to a woman and her doctor, without government interference.” The press release on the survey describes the public’s “sophisticated view” on whether a nominee’s philosophy should be an issue. “The voters do not believe that either branch of government – the administration of the Senate – has the right to require that nominees pass specific litmus tests. By a margin of 77 to 14 percent, voters reject the idea of requiring that prospective judges oppose the Supreme Court’s abortion decision; even those who oppose the decision (20 percent) reject an anti-abortion ‘litmus test’ for judges by a margin of 59 to 31 percent.”

In a July 1987 CBS News/New York Times taken after Bork’s nomination, 52 percent said they favored the Supreme Court’s ruling “that a woman may go to a doctor to end her pregnancy at any time during the first three months of pregnancy;” 41 percent were opposed. When asked if the Senate should count Bork’s criticism of Roe v. Wade in his favor or if it should be counted against him, a plurality (48 percent) said it shouldn’t matter.  

It’s hard to pinpoint when polls became part of the arsenal of political weapons to test Court nominee strengths or vulnerabilities, in part because polling by advocacy groups isn’t usually released publicly. One poll that showed how it can be done was released publicly after Bork’s nomination was announced. In the extensive poll commissioned by the American Federation of State, County and Municipal Employees union for the Leadership Conference on Civil Rights, pollsters tested roughly 20 statements of views it attributed to Bork. It is doubtful that Bork would have recognized the descriptions of his views. The pollsters analyzed the three main issue areas where they believed Bork was most vulnerable: civil rights, privacy and individual freedom, and big business vs. the individual. Senator Ted Kennedy’s infamous speech on the floor of the Senate condemning Bork echoed these points. Gallup described the nomination as the “mostly hotly contested in modern times,” and millions of dollars were spent by advocacy groups to derail it. The hearings hurt Judge Bork, and Gallup’s final poll taken before the Senate vote showed people split on confirmation, with 38 percent in favor and 35 percent opposed. Twenty-six percent said they did not have an opinion.

Only a few years later, in 1991, more than 400 questions were asked publicly about Clarence Thomas’s nomination. The charges leveled against him by Anita Hill muddied the waters because Americans didn’t know who to believe, but in each of the 29 polls conducted by major pollsters from July 1 to October 14 (he was confirmed on October 15) that asked about his confirmation, more people supported than opposed it. In these polls, however, many people gave the response that they didn’t have an opinion or were not sure.

Gallup’s surveys show that views on Supreme Court nominees have become more politically polarized in recent years. Nominees have long received stronger support from people who identified with the president’s party, but Jeffrey Jones noted in Gallup’s 2017 survey release  following Neil Gorsuch’s nomination that “majority opposition from the other party has been a more recent development, likely resulting from the growing political divide in evaluating presidents and their actions.” Given the present political climate, it seems unlikely that views on Kavanaugh’s nomination will be any less polarized.

Confidence in the high court, like other institutions, has suffered in recent decades. In 1986, 54 percent had a great deal or quite a lot of confidence in the Supreme Court. In Gallup’s latest from June, 37 percent had that level of confidence. Opinion about the Court is polarized today and has been since Bush v. Gore. Gallup’s release noted that “When one looks at fluctuations in confidence over the years, a president’s political party and the justices he has appointed appear to affect the public’s views of the nation’s highest court as much as the decisions it hands down.” It remains to be seen how this year’s nomination and impending confirmation fight might affect partisans’ views and overall confidence in the Court.

Unseemly theatrics aside, Trump is essentially right on May’s Brexit plan and the US-UK trade agreement - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Fri, 07/13/2018 - 17:47

There will be more analysis regarding Prime Minister Teresa May’s proposed “soft Brexit” next week, after going through the British government’s White Paper on the subject. But for now, I want to lay down a marker that while the president as usual jumped the gun by stating flatly that May’s plan would “probably kill the deal,” he is correct in warning that the terms of a soft Brexit would sharply circumscribe the British government’s freedom to craft future free trade agreements on its own.

US President Donald Trump and British Prime Minister Theresa meet at Chequers in Buckinghamshire, Britain July 13, 2018. REUTERS/Kevin Lamarque

Briefly, the proposal foresees that the UK and EU would accept “a common rulebook on industrial goods and agricultural products after Brexit.” On services trade and investment, the UK would diverge in some ways (largely unspecified) from EU regulations with disputes to be worked out jointly — or at times, through the auspices of the European Court of Justice. The plan produced an open revolt in the Tory party and the widely covered resignation of Foreign Secretary Boris Johnson and Brexit coordinator David Davis. In his resignation letter, Johnson charged that May’s plan would make the UK an “EU colony.”

No matter how over the top Johnson — and Trump — are in their immediate assessments of the May proposal, it is true that while it may not “kill” the prospect of a US-UK FTA, it will certainly make negotiating such an agreement vastly more difficult. The US and the EU have widely differing approaches to issues such as the environment, digital trade, internet regulation, food safety (GMOs), and trademarks, to name a few.

At this point, it is not clear how much of the UK proposal will survive during future negotiations over Brexit. But the degree to which the UK accedes to the EU rulebook on issues, such as those identified above, is the degree to which a US-UK trade deal becomes ever more difficult.

Postscript: This morning in a joint press conference, both President Trump and PM May tried to walk back yesterday’s comments and paper over differences. Trump claimed his own interview with the Sun newspaper was “fake news,” and May claimed there is “no limit” on UK trade policy after Brexit. All of which brings to mind the old country and western song, “Who You Gonna Believe, Me or Your Lying Eyes?”

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