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Vested interests have been actively reclaiming land from Jakarta Bay for speculative real estate development since the mid-1990s. Widespread institutional reforms and a changing urban political economy have invited greater contestation over these plans. However, one prominent developer's recent success in developing two islands into upmarket properties highlights the resilience of such interests today, writes … Continued

Annamaria Bianco's contribution aims to show how Arab migration writings and future writings have increasingly ended up overlapping, in the wake of the "speculative turn" taken by contemporary fiction. Through a review of a few novels published after the so-called "refugee crisis" in 2015 and drawing on different studies as well as on the notion of "refugeedom", the author will show how this literary genre juxtaposes the documentary function of prose with narrative strategies of estrangement and defamiliarization that aim to generate in the reader a desire to act on the present, to redeem the past and change the future of hospitality worldwide.

Contributor(s): Dr Tatiana Cutts, Professor Nigel Dodd, Dr Garrick Hileman, Dr Natacha Postel-Vinay | Welcome to LSE IQ, the monthly podcast from the London School of Economics and Political Science. This is the podcast where we ask some of the leading social scientists - and other experts - to answer intelligent questions about economics, politics or society. In 2008 a person or group going under the pseudonym 'Satoshi Nakamoto' published a white paper setting out the fundamentals of a peer- to- peer electronic cash system called bitcoin. This would do away with the need to rely on financial institutions, acting as trusted third parties, to process electronic payments. Instead money could be sent directly from one party to another. Transactions would be verified and recorded permanently on the blockchain. This digital ledger would be distributed across a large network of computers and guard against a risk specific to digital currency - that it can be fraudulently spent twice. Technology, Satoshi Nakamoto claimed, would replace the need for trust. Bitcoin was the first decentralised cryptocurrency, and hundreds of others have been created since. In this episode of LSE IQ, Sue Windebank asks, are cryptocurrencies the future of money, a speculative bubble that will burst, or something else? This episode features: Dr Tatiana Cutts, Assistant Professor, LSE Department of Law Professor Nigel Dodd, LSE Department of Sociology; Dr Garrick Hileman, Research Associate, University of Cambridge and LSE, Dr Natacha Postel-Vinay, Assistant Professor, LSE Department of Economic History.

Political economy seminar
Extroverted Financialisation: Banking on USD Debt
Speaker: Mareike Beck, University of Warwick
When: Wednesday 17 April, 3-4pm, 2024
Where: A02 Social Sciences Building, Room 341, The University of Sydney, and Zoom
About the talk: I will speak about my new book, Extroverted Financialisation: Banking on USD Debt, forthcoming with Cambridge University Press. The book offers a new account of the Americanisation of global finance. It advances the concept of extroverted financialisation as an original framework to explain US-led financialisation. The paradigmatic case study of German universal banks is used to demonstrate that the transformation of global banking towards US-style finance should be understood as a response to a revolution in funding practices that originated in US money markets in the 1960s. This new way of funding led to the securitisation of USD debt and rapid globalisation of USD flows, which has fundamentally reshaped the competitive dynamics of global finance as this has empowered US banks over their European counterparts. I argue that this has caused German banks to partially uproot their operations from their own home markets to institutionalise themselves into US money markets. I show that to be able to compete with US financial institutions, German banks had to fundamentally transform the core of their own banking models towards US-style finance. This transformation not only led to the German banks' speculative investments during the 2000s subprime mortgage crisis but also to rising USD dependency and, ultimately, their contemporary decline.

About the speaker: I am an Assistant Professor in International Political Economy at the University of Warwick. Previously, I was Leverhulme Early Career Fellow at King's College London, after having finished my PhD at the University of Sussex. My research agenda focuses on the drivers and socio-economic impacts of financialisation at the global and everyday level. My work has addresses this in three inter-related areas. First, I am interested in a social history of global finance. My book project Extroverted Financialisation: Banking on USD Debt (under contract with Cambridge University Press) develops a novel conceptualisation, extroverted financialisation, to frame the US Americanisation of global finance. I am particularly interested in the uneven nature of the USD-based global financial architecture, and how this has shaped financial globalisation, innovations in on- and offshore finance, and financial instability. Secondly, using a feminist political economy approach, I investigate how everyday asset management and global asset management interact to produce various forms of asset-based inequalities in financialised economies. My third area of interest concerns creative and performative methodologies for knowledge exchange and impact. I regularly engage with civil society groups and local communities. For example, in May 2023, I directed and performed in an aerial acrobatics circus show that performed feminist political economy theorising of homes in their dual function as (1) an everyday living space and (2) a global financial asset.
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Many people are familiar with Adam Smith's The Wealth of Nations (WoN), But Smith's ethical thinking was just as important. In fact, it was The Theory of Moral Sentiments (TMS), published 27 years earlier, on 12 April 1759, that made him famous.Just The Wealth of Nations, this book marked a complete break from the thinking of the time. Ethics had until then been widely assumed to be based on God's will (or the clerics' interpretation of it); or something that could be deduced through abstract reason; or even something that could be felt through some 'moral sense' like touch or vision. Replacing this speculative thinking by scientific method, Smith argued instead that morality stemmed from our human nature as social beings, and our natural empathy for others. By observing ourselves and others, he said, we could discover the principles of ethical behaviour. Ethics was a matter of human psychology, stemming from how we form judgements about ourselves and others, and the influence of customs, norms and culture upon it.This scientific approach to ethics was a sensation. It was very much in line with the Scottish Enlightenment, which sought to apply observation and scientific method to the study of human affairs. Old hierarchies were breaking down; industrialisation was eclipsing Scotland's feudal past; radical thinkers like Francis Hutcheson and David Hume were pushing new boundaries, and religious pluralism was creating a more active debate on virtue and morality.Smith's book explained that morality is rooted deeply in human psychology, especially the empathy we have for our fellow humans. By our nature, we understand, and even share the feelings of others. Wanting others to like us, we strive to act such that they do. Even if there is no one else around to see how we behave, we are still impelled to act honestly, says Smith, as if an 'impartial spectator' is judging us all the time, setting the standard by which we rate ourselves and others. And under this imaginary eye, every choice we make helps us appreciate that standard more clearly and act more consistently in accordance with it. It is as if an invisible hand is drawing us to act in ways that promote social harmony.TMS is mainly a descriptive account of human moral action. It examines how people actually make moral choices, and the pressures on them to do so. It also provides a guide on how we can cultivate our morality, emphasising the importance of self-reflection and self-improvement. Smith's radical scientific approach in TMS and WoN provided a foundation for the subsequent development of psychology, sociology, and economics, establishing them as distinct subjects of academic enquiry. And its suggestion that self-interested actions—wanting to be liked by others, or exchanging things we value less for others' things we value more—could produce a cooperative social and economic order, continues to have a central place in liberal thinking.All this makes the themes in The Theory of Moral Sentiments just as relevant today as they were in 1759. Through self-reflection, we can make better moral choices. Through our empathy with others, we can foster understanding and create a more peaceful society. Through an appreciation of our shared feelings and interests, we can live and work and collaborate together for the mutual benefit of the whole of humanity.

In April, the School of Social and Political Sciences, in collaboration with the Justice and Inequality research priority of the Faculty of Arts and Social Sciences, will be hosting Mike Savage, Martin White Professor of Sociology at the London School of Economics. He has a longstanding interest in the social and historical sources of inequality, within and across nations. From 2015 to 2020 Mike was Director of the LSE's International Inequalities Institute, and his most recent book is The Return of Inequality: Social Change and the Weight of the Past (Harvard University Press, 2021), praised by Thomas Piketty as a "major sociological contribution to the ongoing global debate on inequality and the return of social class".

During Mike's visit, we will be holding two public events: a public lecture on ‘The Racial Wealth Divide’ and a forum on ‘The Eternal Return of the Rentier? How Our Past Weighs on Our Future’ (details below). In addition, we will be holding two closed workshops: one on the hold of finance on public policy (and how to loosen or break it) (April 4-5) and another on the methodological and theoretical challenges facing inequality researchers at a time of escalating inequality (April 16). These events are invitation-only, but spaces are available – please contact martijn.konings@sydney.edu.au for further information.
Forum: The Eternal Return of the Rentier? How Our Past Weighs on Our Future
Wednesday 3 April, 3:30-5 pm
A02 Social Sciences Building, Room 650, The University of Sydney
Please register to attend
Over the past decade, a certain strain of intellectual pessimism has migrated from social theory to popular culture. Our ability to make better futures, it advises, is hamstrung by the sheer weight of the past, resulting in economic stagnation, escalating inequality, generational rifts, and political instability. In political economy, that weight of the past has often been identified with the figure of the rentier, and Piketty's work has documented the return of this morally questionable character, living off the return on property. But today's rentiers are no longer top-hatted financiers, and whether owning a second home represents moral turpitude or a middle-class survival strategy is actively debated in the op-ed pages of Australian newspapers. Nor is it clear that we can account for the full extent of inequity in contemporary society by continuing to rely on existing definitions of wealth. As suggested by the current popularity of concepts such as "technofeudalism", the production of speculative claims on imagined futures shape what appear to be anachronistically exploitative forms of work.
The disorienting ways in which old and new combine to produce unfamiliar forms of inequality demands that we open up our concepts and reconsider our methods. One of the most ambitious and compelling attempts to do so has been advanced by Mike Savage in his recent book The Return of Inequality: Social Change and the Weight of the Past (Harvard University Press, 2021). Professor Savage will be visiting the University of Sydney in April, and, taking its cue from the subtitle of his book, this panel invites leading scholars to reflect on how the past weighs on [...]
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In this 300th year after the birth of Adam Smith, much of the focus has been on Smith's economics, as recorded in The Wealth of Nations (1776). But Smith's ethical thinking was no less profound. Indeed, it was The Theory of Moral Sentiments (1759) that made him famous.Like The Wealth of Nations, The Theory of Moral Sentiments (TMS) was a complete break from the thinking of the time. Ethics had until then been widely assumed to be based on God's will, or the clerics' interpretation of it; or something that could be deduced through abstract reason; or even something that could be felt through some 'moral sense' like touch or vision. Smith, by contrast, argued that morality stemmed from our human nature as social beings, and our natural empathy for others. This replaced speculative thinking by scientific method. Smith maintained that by observing ourselves and others, we could discern the principles of ethical behaviour. It was a matter of psychology: how we form judgements about ourselves and others, and the influence of customs, norms and culture upon those judgements. This scientific approach was very much in line with the Scottish Enlightenment, which stemmed in part from the exchange of ideas between Scotland and England following the 1707 Act of Union, and sought to apply observation and scientific method to the study of humankind. Old hierarchies were breaking down, with industrialisation replacing Scotland's old feudal lifestyles, and with religious pluralism, leading to a more active debate on morals and virtues. New thinkers, like Francis Hutcheson and David Hume, were role models for Smith's intellectual radicalism.TMS argues that morality is rooted deeply in human psychology, especially the empathy we have for our fellow humans. By nature we understand, and even share the feelings of others. We want others to like us, and we strive to act so that they do. Even if there is no one else around to see our actions, we are still impelled to act honestly, as if an 'impartial spectator' is judging us at all time, setting the standard by which we judge ourselves and others. Every choice we have to make helps us see that standard more clearly and act according to it more consistently. All of which leads us, as if drawn by an invisible hand, to create a harmonious social order.TMS is primarily a descriptive account of human moral action. It examines how people actually make moral choices, and the pressures on them to do so. But it also provides a guide on how we can cultivate our morality, emphasising the importance of self-reflection and self-improvement.It is no exaggeration to say that TMS laid the foundations for the subsequent development of psychology, sociology and economics, helping establish them as distinct subjects of scientific enquiry. His idea that self-interested actions—wanting to be liked by others, or exchanging things we value less for others' things we value more—had a profound effect on the rise of liberal thought. Smith's approach is just as relevant today as it was in 1759. Through self-reflection, we can make better moral choices. By sharing the feelings of others, we can foster understanding between individuals and groups and create a more peaceful humanity. By understanding our shared interests we can live and work and collaborate together for the mutual benefit of us all, both in economics and in life in general.

Last month, Foreign Policy published a report that stirred the debate on U.S. Middle East policy. It claimed "the Biden administration is reconsidering its priorities" in Syria and may conduct "a full withdrawal of U.S. troops." Now, legacy media is debating the future of American involvement in Syria. Missing from this discussion is the suffering that involvement has caused.Writing for the New York Times, retired general Kenneth McKenzie warns "it's not time for our troops to leave" Syria. Mere talk of a withdrawal (let alone actually withdrawing), he argues, is "seriously damaging to U.S. interests." It "gives hope to Tehran" that Iran might rival American influence in the Middle East — which is bad, supposedly. Why Iran has less of a right to influence its own region than people thousands of miles away is unclear.McKenzie also argues that American troops must remain to "secure the prisons holding ISIS fighters." Without boots on the ground, militants might escape and the Islamist group could "rejuvenate itself." McKenzie doesn't believe the Syrian government could prevent prison breaks on its own, or even with Russian and Iranian support.This argument is highly speculative. If the Americans leave, imprisoned ISIS fighters might escape. And, if enough do, they might rebuild their organization into a force too formidable for Syrian forces to handle. Multiple unlikely contingencies must materialize to even warrant taking this reasoning seriously.But McKenzie's claim suffers a more fundamental problem. It confuses the cause for the antidote. Everyone from Noam Chomsky to Rand Paul knows American intervention created the conditions that allowed ISIS to grow. Bombing Arab nations to smithereens, toppling their leaders, and starving governments through sanctions and outright theft generated a power vacuum. As did deploying troops indefinitely, which prevented states like Syria from maintaining territorial integrity and establishing the mechanisms for self-governance.McKenzie believes the Syrian government is simply too weak to quell the increasingly small threat an ISIS in retreat poses. Assuming he's correct, it's worth asking why that's the case. The facts again point to American intervention.Nearly 13 years into its ongoing civil war, Syria is in tatters. Once a middle-income nation with respectable living standards, it's now the poorest country on Earth. More than 90% of Syrians live below the international poverty line of $1.90 per day. Their paychecks are worthless, with the Syrian pound losing virtually all of its relative value since the war began.It's not all America's fault. The Syrian government undoubtedly bears significant blame for the humanitarian crisis. But American sanctions hamstring it from improving matters. The infamous Caesar Act targets anyone who "engages in a significant transaction" with the Syrian government. Signed into law by Donald Trump, this heinous policy effectively precludes the international community from helping Syria rebuild.A bipartisan but overwhelmingly Democratic coalition of lawmakers recently voted against slapping new sanctions on Syria. Unfortunately, for every one of them, there were 12 supporters of the legislation. Dubbed the Assad Regime Anti-Normalization Act, it would extend the sunset of the Caesar sanctions by eight years. The bill would also expand the list of proscribed transactions.But there's more. Years ago, with America's blessing, Turkish-backed militias stole capital from over 1,000 factories in the city of Aleppo alone. This assault on the productive forces of Syria's industrial hub left its economy in tatters. But that's not all the United States and its allies stole. America's occupying troops routinely commandeer Syrian wheat and petroleum. Trump admitted as much, saying that soldiers "were staying in Syria to secure oil resources."The Syrian state is starving. More American intervention isn't what Syria needs. It needs the United States' boot off of its neck.In these discussions of states and militants, we mustn't lose sight of what matters most: the people. American militarism in Syria has wrought dire human costs. It has helped to plunge Syrians into the depths of unimaginable despair. Over 80% of them are food-insecure and a similar proportion lack sustained access to electricity. Many enjoy just one hour of it per day. Without electricity, you can't refrigerate food and it rots. That causes shortages. People have taken to eating out of the garbage.McKenzie seems to care little about this immense suffering. And why would he? His job as a general was to project American military might, whatever the costs, a position he apparently continues as a guest writer for The New York Times.

When it comes to announcing its targets without the slightest idea of how to achieve them, the Department for Energy Security and Net Zero (DESNZ) is world beating. Wisely or otherwise, DESNZ set its key target for net zero carbon emissions by 2050. Initially, emissions fell, largely because the UK exported carbon-emitting industries. In March 2022, the Public Accounts Committee report concluded: "The government has unveiled a plan without answers to the key questions of how it will fund the transition to net zero, including how it will deliver policy on and replace income from taxes such as fuel duty, or even a general direction of travel on levies and taxation. The government has no reliable estimate of what the process of implementing the net zero policy is actually likely to cost British consumers, households, businesses and government itself." In other words, it had no plan. In July 2022, Mr Justice Holgate ruled, in effect, that DESNZ had no plan to achieve its objective and they should prepare and publish one by 31st March 2023. In the event, no plan emerged and on 15th November 2023, the Public Accounts Committee reported on how DESNZ was managing innovation and its contribution to achieving net zero carbon 2050. It found it to be short-termist, muddled and had no central management.DESNZ has published numerous aspirational papers on what might be achieved but none bring the whole picture together or explain what the overall energy/electricity needs will be or how they will be generated without carbon emissions. On low wind and sun days, renewables and nuclear will be inadequate and so fossil fuels, with carbon capture, usage and storage (CCUS) will be needed into the foreseeable future.  For example this month, wind  generation reached a low of 0.4GW (1.7% of demand). Nominal installed wind capacity is over 27GW. As of now, CCUS is commercially unproven in the power sector, so it is all a bit speculative. At the 8th November Oral Evidence session with the ESNZ Select Committee, the Secretary of State claimed "we're now spending £20 billion on carbon capture and storage". Clearly net zero carbon will be impossible without CCUS. DESNZ claims the UK will be the world leaders in that and has set up a council to achieve it: "Commissioning of the first CCUS facility from the mid-2020s would help the UK to meet our ambition of having the option to deploy CCUS at scale during the 2030s, subject to costs coming down sufficiently."  The £20bn is possible in the future, but not currently and needs clarifying. It is not clear whether this should be government funding.  Surely the responsibility for, and costs of, decarbonising fossil fuel emissions should lie with the fossil fuel generators.The creation of the UK's CCUS market lies with its Council, inaugurated in 2018. Its last meeting was on 27th June. Some 45 or so members, including the Director, CCUS, DESNZ and his five deputies, discussed bureaucratic matters, like reporting lines, with little evidence of practical haste. The idea of having "a timeline to understand industry progress" was introduced.  Fancy that! Things would move a lot faster if they were left to the fossil fuel companies.The overall picture is that DESNZ in inadequate. What do its 8,498 staff actually do? Probably around 44% work from home.  The ESNZ Select Committee held a brief Inquiry into what DESNZ actually does. The new Secretary of State was not asked how the 2050 targets might be achieved, so it might be described as a soft ride but other ESNZ Committee inquiries are addressing those issues and will be reporting next year. The bottom line is that we have this vast number of people in DESNZ, their main target is achieving net zero carbon emissions by 2050 and, after years of prodding, have still not produced a plan, never mind a decent one, to achieve it.UK industry is back-peddling on CCUS as they wait to see how tough the post-election Government will be on CO2 emitters. The current Government seems to be supporting this by allowing the Emissions Trading Scheme to decline in effectiveness as evidenced by the UK's falling carbon price, in sharp contrast to the rising carbon prices in other countries. The Sunak Government seems to have thrown in the towel on tackling climate change and will, I imagine, keep a low profile at the upcoming COP.                                                                     

Last year's Hamas-led incursion into southern Israel and the subsequent Israeli war on Gaza, which has killed roughly 35,000 Palestinians, have impacted relationships within the Gulf Cooperation Council (GCC) — members appear to be moving closer together. As the Gaza war expands into Lebanon, Yemen, the Red Sea, and elsewhere, and while Iran and Israel's hostilities brought the region into uncharted waters earlier this month, the monarchies on the Arabian Peninsula are strengthening ties within the larger Gulf Arab family.In a historical context, this makes complete sense. To understand why, it is useful to first go back to the chaotic period of the late 1970s and early 1980s.For the Persian Gulf's Arab monarchies, 1979 was a terrifying year. To varying degrees, the Western-backed Gulf Arab leaders saw both Iran's Islamic revolution and the Soviet invasion of Afghanistan as dangerous developments. By 1981, the six conservative Gulf Arab states — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE) — came together to bolster their collective security by establishing the GCC.Over the decades, the GCC states have put their ideological and geopolitical differences aside in the interest of growing Gulf Arab unity, particularly during periods of increased instability. Cases include the 1990/91 Kuwaiti crisis, the 2010/11 Arab Spring uprisings, the meteoric rise of Islamic State in Iraq and the Levant (ISIL) in mid-2014, and the Taliban's return to power in 2021. By the same token, at times of greater stability in the region and fewer threats to the Gulf Arab monarchies, internal divisions and differences between the GCC members have tended to elevate to the surface.It was no coincidence that the first GCC crisis broke out in March 2014. At that time, the revolutionary tide of the Arab Spring had largely dissipated and the counter-revolutionary Gulf Arab states — Saudi Arabia, the UAE, and Bahrain — felt the need to pressure Qatar into abandoning the pro-revolutionary and Islamist-friendly policies that shaped Doha's approach to many of the 2010/11 uprisings which shook the Arab world. Yet, that GCC spat ended later that year after ISIL had usurped large portions of Iraq and Syria. Then, the second GCC crisis, which was an outcome of basically the exact same issues that led to the first GCC crisis, erupted in mid-2017 when ISIL was significantly less powerful.Although the Gulf Arab states — unlike Egypt, Jordan, Lebanon, and Syria — do not share land borders with Israel-Palestine, all six GCC members are extremely worried about the situation in Gaza and its ramifications for the wider region, including the Persian Gulf. Among the Gulf Arab monarchies, there is much common cause and shared concerns about further regionalization of the Gaza war. These concerns have led to Gulf Arab officials becoming increasingly frustrated with U.S. leadership in the region and the Biden administration's refusal to pressure Israel into agreeing to a ceasefire."[The] war in Gaza has unified GCC [states] in terms of moral, political, and diplomatic solidarity with Gaza and the Palestinians," said Abdulkhaleq Abdulla, a Dubai-based Emirati political scientist, in an interview with RS. "Israel has become a killer machine in Gaza for the past 200 days and this is to nobody's liking in the Arab Gulf states," he added.There are important domestic ramifications to consider too. Officials in the Gulf Arab monarchies fear the potential for the Palestinian cause to mobilize and/or radicalize their own citizens in ways that could upset the status quo in GCC states and the wider region. Palestine-related protests in Egypt and Jordan have potential to fuel significant unrest in those two countries, whose stability is vitally important to the Gulf Arabs.Saudi Arabia's Crown Prince and Prime Minister Mohammed bin Salman (MbS) recently spoke by phone with the president of the UAE Mohammed bin Zayed (MbZ) and the emir of Qatar Sheikh Tamim. In these two conversations, the Gulf Arab leaders discussed the heightening of regional tensions and threats to stability and security in the Middle East. MbS, MbZ, and Emir Tamim all agreed on the need to mitigate security risks and take measures to prevent the region's crises from spiraling out of control.On April 22, Oman's Sultan Haitham paid his first visit to the UAE since he became his country's head of state in January 2020. While in Abu Dhabi, Sultan Haitham and MbZ discussed a host of issues at the bilateral, regional, and global levels. During Sultan Haitham's visit, companies from Oman and the UAE signed $35.12 billion worth of deals in various sectors such as transport and energy. The Omanis and Emiratis are focused on advancing their countries' economic integration through various projects and initiatives, most notably the Etihad Rail which links Oman's Sohar port to Abu Dhabi.The GCC states have come a long way in terms of mending fences since the historic al-Ula summit of January 2021 officially ended the Emirati- and Saudi-led blockade of Qatar. Indeed, it was not long ago when a phone call between MbS and Emir Tamim, or between MbZ and the Qatari emir, would have created many headlines given the extent to which Saudi-Qatari and Emirati-Qatari relations had deteriorated. "The Gaza war has brought Qatar and the UAE closer," Abdulla told RS.These past rifts within the GCC were not only about Qatar. The UAE and Oman were having their share of problems in bilateral affairs throughout Sultan Qaboos's final decade on the throne. Yet, Sultan Haitham's recent visit to the UAE underscored how the leadership in both Muscat and Abu Dhabi are focused on both playing their diplomatic cards to try to bring regional crises under control while also pushing ahead with their economic transformations at home through ambitious visions aimed at eliminating their economic dependence on hydrocarbons.In all GCC states, there is an understanding that more discussions between their leaders and growing levels of inter-GCC cooperation across a host of domains is necessary to achieve progress on both fronts. The Gulf Arab monarchies realize that this is not a time for internal divisions and friction between the different royal families to prevent the six GCC members from reaching their potential through greater Gulf Arab unity.GCC states have strengthened their relationships with each other since October 7 because "there needed to be coordination given that Saudi Arabia, Qatar, and the UAE are playing leadership roles in this conflict," said Aziz Alghashian, a fellow with the Sectarianism, Proxies & De-sectarianisation project at Lancaster University.Nonetheless, while the GCC members are bolstering their cooperation as Israel's war on Gaza rages, some experts believe that competition between the Gulf Arab states vis-à-vis Gaza might emerge after the dust settles and the post-war phase begins in the Palestinian enclave."There is potential that it could be turbulent in the future once there is a real process of addressing the day after in Gaza and that could [relate to] aspects of burden sharing [and] aspects of competition," Alghashian said. "So, there is that to look out for in the future. Maybe it's speculative for now, but I don't think we should count it out."

Russia's "Fundamentals of the State Policy of the Russian Federation in the Area of Nuclear Deterrence," a high-level strategic document, says that Russia "hypothetically" could allow the use of nuclear weapons only "in response to aggression using WMD [weapons of mass destruction]" or if there is "aggression using conventional weapons, when the very existence of the state is threatened."Responding to France's President Emmanuel Macron's February 6 statement that "no option should be discarded" in ensuring the defeat of Russia, including "troops on the ground" in Ukraine, Russia's President Vladimir Putin said that "we are ready to use any weapon, including [tactical nuclear weapons], when it comes to the existence of the Russian state and harm to our sovereignty and independence. Everything is spelt out in our strategy, we have not changed it."Macron replied that France is also a nuclear power. "We must first and foremost feel protected," Macron said, "because we are a nuclear power." He then added, "We are ready; we have a doctrine [for the use of nuclear weapons]."France is ready to send troops into Ukraine "to counter the Russian forces" and even to prepare for nuclear war. In a March 19 opinion piece in the French paper Le Monde, General Pierre Schill, Chief of the French Army Staff, declares that "nuclear deterrence safeguards France's vital interests." Reminding the world of France's "international responsibilities" and "interests" and "defense agreements," he says that "the French army is preparing for the toughest engagements, making this known and demonstrating it."But what do the French really mean by saying they are "preparing for the toughest engagement" and that Europe must be "ready" to have "troops on the ground" in Ukraine?Macron has said that NATO must not discard the option of "troops on the ground" to ensure that "Russia does not win." But win what? Does Macron want to ensure that Russia does not defeat Ukraine for Ukraine's sake, or does he mean that Russia should not win in Ukraine for the subsequent defense of Europe?Macron said that the time was coming "in our Europe where it will be appropriate not to be a coward" and that it is time for a "strategic leap." He pressed Germany to send their long-range Taurus missiles, reminding them that they once said, "'Never, never tanks; never, never planes; never, never long-range missiles'…. I remind you that two years ago, many around this table said: 'We will offer sleeping bags and helmets.'"When it came to the option of sending troops into Ukraine, Macron said that anyone who advocates "limits" on how the West helps Ukraine "chooses defeat." He insisted that "if the situation should deteriorate, we would be ready to make sure that Russia never wins that war." Europe must be "ready," he said, "to reach the means to achieve our objective, which is that Russia does not win."It sounded as if Macron was talking about Russian victory in Ukraine again when he considered the threshold for sending troops. "We're not in that situation today," he said, but "all these options are on the table." Following a March 7 meeting with parliamentary parties, Fabien Roussel, national secretary of the French Communist Party, reportedly said that "Macron referenced a scenario that could lead to intervention [of French troops]: the advancement of the front towards Odessa or Kiev." Macron's objective again seemed to solely be Ukraine when he said in a March 14 interview, "We are doing everything we can to help Ukraine defeat Russia, because I will say it very simply: there can be no lasting peace if there is no sovereignty, if there is no return to Ukraine's internationally recognized borders, including Crimea."But, against all these apparent narrow references to Ukraine, Macron's subsequent discussions of the threshold for troops sounded more as if they were about the defense of Europe than of Ukraine. He said that "war is back on our [i.e. Europe's] soil" and that Russia is "extending every day their threat of attacking us even more, and that we will have to live up to history and the courage that it requires."On March 14, Macron, again expressing his position that sending troops from NATO countries is an option that should not be discarded, said that "to have peace in Ukraine, we must not be weak." This time, he gave as his reason that Russia's invasion of Ukraine was "existential for our Europe and for France."He proceeded to say that "it wouldn't be us" who would trigger such a move and that France would not lead an offensive into Ukraine against Russia. "It would be Russia's sole choice and sole responsibility," he said. And then he added, "If war was to spread to Europe," it would "be weak, to decide today that we would not respond."But even if Macron means defending Europe from Russia, does he mean from an actual attack or simply a potential attack?With several of his aforementioned statements, Macron sounds like he means that Europe must be ready to defend against an actual attack from Russia after it defeats Ukraine. Yet elsewhere, Macron sounds like he is referring only to a potential attack, saying that Russia must not be victorious in Ukraine because that "would reduce Europe's credibility to zero" and would mean that "we have no security."Interpreting Macron's motives may be even more difficult than ascertaining his statements' bare meaning. Why would Macron express the previously inexpressible and risk crossing the red line of a third world war?It is of course impossible to know Macron's mind, so any analysis is speculative. But there are at least three possibilities.The first is that the intended target of his comments is not Russia at all, but the U.S. and Germany. With American war funding struggling against a congressional dam and Germany refusing to send Taurus long-range missiles, Macron may be trying to apply psychological pressure to his allies to send Ukraine more money and weapons assuming they would find that option more palatable than going even further and sending troops.The second is that the intended target of his comments is Russia. In this possibility, the goal is to create "strategic ambiguity." The purpose would be, as explained by one French diplomat, so that Russia, as it advances west in Ukraine, cannot rely on the assumption "that none of Ukraine's partner countries will ever be deployed" to Ukraine. The French newspaper Le Monde reports that "Macron's office explained that the aim is to restore the West's 'strategic ambiguity.' After the failure of the Ukrainian 2023 counter-offensive, the French president believes that promising tens of billions of euros in aid and delivering—delayed—military equipment to Kyiv is no longer enough. Especially if Putin is convinced that the West has permanently ruled out mobilizing its forces."The third possibility is that the intended target of his comments is Europe. Europe must prepare for the possibility of a Trump administration weakening its commitment to Europe and NATO. That would leave Europe with more responsibility for the defense of Ukraine and of itself. While Germany has been the economic leader of Europe, France has seen itself as the security leader.One diplomat told Le Monde that while Germany "is afraid of escalation…. France wants to give the impression that it isn't afraid." Macron "may have wanted to make it clear to Scholz that their two countries are not in the same league" as Macron positions France to be the security leader of Europe in a post-Biden Trump-led world. Macron has opened the door to the discussion of Western troops on the ground in Ukraine. With the risks that come with opening that door, it will be important for everyone to clarify both Macron's threshold and his motivation for sending troops to Ukraine.This piece has been republished with permission from The American Conservative.

Norbert Michel


A few weeks ago, American Compass released Rebuilding American Capitalism, A Handbook for Conservative Policymakers. After I provided a very brief critique of the handbook's "Financialization" chapter in a Forbes column (American Compass Points To Myths Not Facts), Oren Cass, American Compass's Executive Director, released a response titled Yes, Financialization Is Real. (Cass's response lists many reports and statistics, but it does not answer my critique of the "Financialization" chapter. I encourage everyone to read Cass's response, or one of his Twitter threads, to better understand how Cass and his organization produce research.)
To provide a more thorough critique of the "Financialization" chapter, my colleague Jai Kedia and I will release a series of Cato at Liberty posts over the next few days. The present post is the first in the series, and it expands on the most basic of my criticisms: American Compass's failure to define financialization, the most important term in the chapter.
Although the American Compass handbook does not provide a coherent definition of financialization, it still claims "financialization is a blight on capitalism" and that financialization diverts "resources away from capital intensive projects and toward financial assets." (See page 59 of the "Financialization" chapter.) In the foreword, Cass warns that "Financialization shifted the economy's center of gravity from Main Street to Wall Street, fueling an explosion in corporate profits alongside stagnating wages and declining investment."
None of these scary‐​sounding phrases define the term financialization or explain precisely what is (supposedly) diverting resources away from other projects, much less why such diversions are suboptimal. A robust research report would not make such mistakes. It would immediately define the term as clearly as possible to avoid any confusion, a bare minimum requirement to provide well‐​supported policy prescriptions to policymakers.
It is true, of course, that effective political campaigns often employ such rhetorical tactics. But American Compass isn't a political campaign. It claims to be a think tank engaged in serious analysis of economic problems. It is American Compass's responsibility to clearly define terms and problems so that policymakers (and others) can understand and evaluate American Compass's recommendations. On this score, American Compass fails miserably.
From the very beginning of the chapter, the financialization concept is so broad that it could be construed as almost anything. For instance, after the chapter introduction acknowledges that "Robust financial markets are vital to a productive economy," it states:
In recent decades, American finance has metastasized, claiming a disproportionate share of the nation's top business talent and the economy's profits, even as actual investment has declined. Businesses, rather than invest their own profits in growth and innovation, increasingly disgorge capital back into the market, where it flows into speculative frenzies that drive the prices of existing assets higher rather than creating new ones. The private equity and hedge fund industries have captured hundreds of billions of dollars in fees while underperforming simple market indices. Strategies that load debt onto companies place workers and their communities at risk while transferring the profits far away. This "financialization" of the American economy weakens the nation and threatens our future prosperity.

Based on this introduction, whatever financialization is, it consists of at least six different concepts. And just in case these concepts aren't broad enough, the chapter also warns that the "ideas and ideologies" inside of corporations, as opposed to merely financial incentives, "play a primary role in setting business investment decisions." It then states, "In this sense, 'financialization' is also a useful shorthand for the predominance of financial considerations in business management." (It would be difficult to argue this last version of financialization is some kind of new phenomenon, but I digress.) On Page 62, the "Financialization" chapter includes the following items under the financialization umbrella: "corporate profit strategies and compensation schemes, rival foreign subsidies and industrial policies, [and] cumbersome environmental and permitting regulations."
Even more confusingly, the chapter also claims the aforementioned resource diversion is both "one definition" and "the most pernicious effect" of financialization.
Further, citing a publication released by Senator Marco Rubio (R‑FL), the "Financialization" chapter argues that "For most of modern American history," corporations primarily raised capital from the "rest of the economy and spent it on non‐​financial assets." Supposedly, though, "Financialization (whether as cause or effect) disorders this cycle." The parentheses are included in the original text.
So, while it seems this idea – corporations should invest less in financial assets and more in non‐​financial assets – might be the core of American Compass's argument, it is impossible to tell whether financialization is causing the disorder or whether some disorder is causing financialization. Identifying what is cause and what is effect is a primary responsibility of the authors of such a report.
Yes, American Compass could be arguing that it is both cause and effect, but the question of precisely what financialization is remains a mystery. This critique – that American Compass fails to provide a coherent definition of financialization – is more than a technical matter. This failure is a major research flaw because it is impossible to analyze a problem without identifying the variables that would be affected by it, let alone the cause of the supposed problem.
American Compass uses the term so broadly that it can point to virtually any economic phenomenon or statistic, even a socially beneficial one, as "evidence" of how harmful "financialization" has been. (In this interview, Cass defines the term even more broadly than the "Financialization" chapter.) It allows critics of financial markets to engage in circular arguments, such as: financialization makes corporate profits explode, so public corporations are buying back shares, so investment is declining, which itself is also financialization.
Under such broad terms, anyone could easily associate "financialization" with any number of facts. For instance, financialization may have caused the female labor force participation rate to be almost 30 percentage points higher in 2022 than it was in 1950. Perhaps it caused the percentage of American households with a computer to increase from 8 percent in 1984 to 92 percent in 2018, or real median household income to rise from $50,000 in 1967 to $67,521 in 2020. Maybe it even caused workers with an associate degree to earn $157 more in median weekly earnings in 2020 than those with just a high school diploma.
The problem, of course, is that these kinds of statements amount to little more than opinions because the term "financialization" is used so broadly. And when critics provide evidence against these alleged effects (or causes?) of financialization, American Compass can easily push back by focusing on a different alleged effect or using a different piece of evidence. When critics point out that, for example, investment has not declined, American Compass can easily point to a different investment metric, thus changing the debate.
Obviously, this elusiveness is a great political strategy.
It becomes very easy, for example, to pit "Main Street" against "Wall Street" with what appears to be empirical evidence. It becomes easy to vilify the "speculators" who profit by "trading piles of assets in circles" instead of financing the "real" economic activity that provides jobs to typical Americans. American Compass can simply point out that someone earned high profits or that someone's income declined. But neither these slogans, nor these simplistic data points, amount to evidence.
This kind of populist attack on finance is hardly new, and it's one that lawmakers such as Senator Elizabeth Warren (D‑MA) use to vilify "Wall Street" for "looting" businesses. It is eerily reminiscent of the way government officials blamed Wall Street for the Great Depression, ultimately winning support for the Glass‐​Stegall Act. It also has some of the populist themes (the common man versus the banks) William Jennings Bryan used in his "Cross of Gold" speech at the 1896 Democratic National Convention, though Bryan failed, three times, to win the U.S. presidency. In fact, many aspects of American Compass's concept of financialization are virtually indistinguishable from Karl Marx's concept of fictitious capital versus real capital in Volume 3 of Capital.
With this Cato at Liberty series, we will not try to cover all the different versions and descriptions of financialization that American Compass uses. Instead, we will focus on the specific claims discussed in the original critique along with a few that didn't make the cut in that Forbes piece. In the next post, we will discuss claims involving the nation's top business talent leaving for the financial industry.

Paul Matzko









This global public opinion poll asking respondents whether they have a favorable view of the USA has been bouncing around the interwebs. The topline finding — the US is pretty popular! — surprised many American cultural critics who remember the bad old days of the Iraq War when global criticism of US imperialism surged.
I find the handful of countries where the opinion of the US remains more negative just as interesting. Hungary's worst‐​in‐​Europe result is amusing given how the far Right in the US fetishizes Viktor Orban's reactionary politics. American Hungary stans suffer from sublimated self‐​hatred, wishing they could be as xenophobic and culturally chauvinist as team "Make Hungary Magyar Again."
But the other outlier country on this list with a marked dislike of the US might be more of a surprise to Americans: Australia. We're almost underwater Down Under. This is in sharp contrast with how highly Americans think of Australia; if you combine all positive responses from this survey, Americans consider Australia their warmest ally. Which means the gulf between how Americans and Australians view each other would be one of the widest in the world!
As it so happens, I spent eight summers as a teenager living in Australia. That certainly doesn't make me a country expert — and it's been two decades since I was last there — but it does mean that Australian antipathy towards the US doesn't take me by surprise.
That dislike was very much on the surface when I was a 10 or 11 year old trying to make Aussie friends. The most popular country singer in Australia at the time was the man, the legend, John Williamson. I've written about Australian country music elsewhere, but I can still sing many of Williamson's top hits from memory, including his rip‐​roaring nationalist anthem "A Flag of Our Own" (1991). Williamson was a republican, which meant that he believed Australia should leave the British Commonwealth, reject the monarchy, and take the British stripes off the Australian flag. Here's the song's chorus:
'Cause this is Australia and that's where we're from We're not Yankee side‐​kicks or second class P.O.M.s And tell the Frogs what they can do with their bomb Oh we must have a flag of our own

Let me decipher that for you. P.O.M.s stands for "Prisoners of Her Majesty," or Brits, which is often amended with an adjective such as "whingeing POMs" to describe those who yearn for ye olde country and constantly complain about Australia's supposedly backward ways. This was a particularly popular complaint in Australia in the aftermath of Australia's 1975 constitutional crisis. The Australian Governor‐​General — a crown appointee in a mostly symbolic role — had invoked a long neglected royal power and replaced the elected left‐​wing prime minister with a conservative. (For comparison, imagine the hoopla if King Charles III were to kick British Prime Minister Rishi Sunak out of office and install a Labour prime minister!)
"Frogs," of course, are the French, who were on the radar of Aussie nationalists in the 90s for conducting nuclear testing in their Polynesian colonies — which Australia considered its own backyard — and doing so without regard for the effects of nuclear fallout on surrounding islands and Australia itself.
That leaves us with Yankees, commonly shorted to "Yanks," which quickly becomes, via Australia's penchant for rhyming puns, "Septic Tanks," or then shortened further to "seppos." (Aussies are world leaders in slang. It's like if Cockney wasn't just the lingo of one neighborhood in London but had been exported en masse via prison ships, transported to the other side of the globe, and then had taken over an entire continent. Oh wait…)
Maybe you're wondering why America made that opprobrious list alongside the POMs and Frogs. We weren't testing any nukes in the Pacific (at least, we hadn't for a while) and we weren't meddling in their domestic politics (though blaming the CIA for the 1975 constitutional crisis remains popular among Aussie conspiracists).
But when this song was released in 1991, the Australian military had just participated in the US‐​led Gulf War. Although suffering no combat casualties, Australian nationalists saw this as yet another example of Australia blindly serving the interests of foreign superpowers, from dying at the command of callous British generals in the trenches at Gallipoli — the subject of a 1981 blockbuster starring a young Mel Gibson — to the failed fight alongside the Yanks in the jungles of Vietnam.
Bear in mind that Australia's anti‐​Vietnam War protests in 1970 were the *largest* protests in their history; by contrast, the much feted anti‐​Vietnam war protests in the US don't even crack our top 27! Australia's involvement in the Iraq War did little to assuage critics who believed Australia should stop playing second fiddle to the US, especially after leaked documents showed that the Aussie government's primary purpose for sending troops was to cozy up to the US. All the talk about eradicating weapons of mass destruction and promoting democracy was merely "mandatory rhetoric."
However, when I was a teenager in Australia in the late‐​90s, especially while visiting rural communities in Northern Queensland, the complaint I heard the most often revolved around US trade policy, specifically US tariffs on the import of Australian lamb meat. I remember riding around the bush in a ute (flatbed pickup truck) with a local farmer who was spitting mad about US tariffs and who said that the Monica Lewinsky scandal was Bill Clinton getting his just desserts for harming Aussie sheep farmers. What a thought! Australian headlines from the time were simply scathing in their critique of Clinton's hypocrisy in signing a free trade deal with Canada and Mexico while slapping new tariffs on Australia.
Yet other than the mad cow panic, meat import policies — let alone veal tariffs, lol — have never been a major political issue in recent US national politics. But they sure mattered a great deal to Australia, which is the second largest sheep exporting country in the world (Australia and New Zealand combine for an incredible 93% of the global market). In any case, US trade policy in the 1990s fit with Australian nationalists' broader critique of the US as a bully who simply expected Australia to meekly comply with its broader geopolitical agenda regardless of whether it was in Australia's own national interest.
So Australians' mixed opinions regarding the US are grounded in real, pragmatic considerations. It's yet another situation in which our imperial entanglements and trade protectionism have provoked blowback.
It's possible that in the future those feelings might revert towards the more US‐​positive, Australasian mean given Chinese economic and military expansionism in the region. Up until now, Australia has been insulated from the downside risks of Chinese expansion — funnily enough, the intervening Indonesians have been a more significant target for Australian jingoism — while benefitting greatly as a supplier of raw materials for the post‐​Mao Chinese economic miracle. Until the pandemic, Australia hadn't experienced a recession in nearly thirty years (!).
On a more speculative note, if Noah Smith and other India boosters are correct, Australia's role as a potential trading partner with India could matter as much for that country's success as its trade with China has for the past three decades. Last year, Australia signed a new free trade deal with India and expects its exports to triple by 2035. And given the ongoing decoupling of global investment from the Chinese market, Australia could benefit from a major boost of foreign investment given its proximity and ties with India, Vietnam, and other high growth South and Southeast Asian markets (nicknamed "Altasia"). There's little in the way of Australia enjoying another thirty years of torrid economic growth.
The US should forge a new, peer relationship with Australia, signaling that it takes Australia seriously as a vital regional ally rather than treating it as a junior partner in our foreign misadventures. We have a golden opportunity to do so right now. As Doug Bandow has noted, China has foolishly kicked off a trade war with Australia, and while Trump considered following suit with new tariffs on Australian exports, he was finally persuaded not to. We should take advantage of China's mistake by expanding our 2005 free trade agreement with Australia and lower rates on agricultural products that are feeling the pinch from Chinese tariffs.
This is a crosspost from the author's Substack. Click through and subscribe for more content on the intersection of history and policy.

Adam N. Michel


The current federal budget deficit and the accumulated debt result from Congress spending more than they are willing to raise in taxes. Ultimately, the question of which is more to blame—steady taxes or ballooning spending—will depend on our priors: should the government consume an ever-increasing share of private resources, or should its growth be constrained?
However, the recently updated CBO long-term budget outlook makes clear that the causes of the future budget deficit is not a question of normative judgment. Tax increases cannot fix the underlying growth of health and retirement spending. Even if tax revenues permanently increased to the levels collected when the United States had a budget surplus in 2000, projected deficits would still rise above 9 percent of GDP by 2053. Tax cuts are not to blame for the demographic and benefit-formula-fueled growth in mandatory spending.
This short piece will begin with context on U.S. fiscal trends and then discuss the two distinct issues in budgetary sustainability—the growth rate of future spending and the desired level of government spending. Fixing the unsustainable growth rate of federal spending is necessary regardless of the desired level of government spending and preferred tax rates. However, without spending restraint, any tax relief will necessarily be short-lived.
Spending Consistently Outstrips Revenue
Federal spending has been systematically higher than tax revenue for the last half-century. Revenues have fluctuated around an average of 17.4 percent of GDP, while spending has followed much larger swings around an average of 20.9 percent. For a brief time between 1998 and 2001, Congress ran a surplus when revenue was high during the strong economy, and outlays dipped due to a temporary political consensus against deficits that limited defense spending, discretionary appropriations, and entitlement growth. Since then, spending has steadily ratcheted up, punctuated by the Great Recession and COVID-19.
Figure 1 shows historical and projected revenue and outlays from 1970–2053. In 2022, federal revenue as a percent of GDP was at a two-decade high, and this year's revenue as a share of the economy is projected to be 18.4 percent of GDP, a whole percentage point above the historical average. Over the next three decades, revenues will remain above the historical average, climbing to 19.1 percent by 2053. After recovering from the pandemic spike, outlays are projected to climb past their current highs, rising from more than 24 percent of GDP in 2023 to 29.1 percent of GDP in 2053.











The CBO projections are subject to some well-known flaws. First, it is based on current law, which assumes unrealistic things, such as Congress allowing all the temporary 2017 tax cuts to expire and discretionary spending growing slower than the economy. Second, it cannot account for new spending Congress will authorize in the future, whether due to an emergency—war, recession, pandemic—or politically expedient spending on student loan forgiveness or additional energy subsidies. Third, the projections are based on speculative assumptions about economic growth, inflation, interest rates, and healthcare costs. None of these flaws change the critical takeaway from the CBO projections: even with assumed significant tax increases and conservative spending projections, the federal budget is unsustainable.
Congress has been much better at constraining projected revenue growth than they have been at constraining spending. Spending grows as benefits increase faster than inflation and more people become benefit-eligible. Baseline tax revenue grows as temporary tax cuts expire, and inflation slowly pushes people into higher tax brackets. The largest source of additional tax revenue over the next 30 years is inflation-caused real bracket creep, accounting for almost twice as much additional revenue as the expiration of the 2017 tax cuts in 2053.
Periodic tax cuts have kept revenue as a share of the economy flat rather than increasing while spending growth remains on a consistent upward path.
Taxes and Fiscal Sustainability
Some commentators have claimed that "without the Bush and Trump tax cuts, debt as a percentage of the economy would be declining permanently." However, CBO budget projections from before the 2001 Bush tax cuts tell a different story. In 2000, when the U.S. was running budget surpluses, the first line of CBO's long-term budget outlook begins by noting that "projected growth in spending on the federal government's big health and retirement programs—Medicare, Medicaid, and Social Security—dominates the long-run budget outlook." Even in its most optimistic scenario—in which the federal government saves the temporary surpluses—CBO still notes that "the growing expenditures projected for health and retirement programs would quickly push the budget back into deficit," and debt would again begin to grow exponentially.
There are some more recent years, such as 2012, when CBO projected declining deficits and debt, but these years are flukes of the current law scoring process in which the CBO assumed both significant automatic tax increases and large automatic spending cuts that Congress never intended to allow. The 2012 alternative baseline, which more realistically assumed Congress would extend the 2001 tax cuts and halt automatic payment cuts to Medicare providers, among other spending increases, showed a more realistic scenario with deficits growing to 17.2 percent of GDP by 2037.
Focus on Unsustainable Spending First
Ultimately, focusing on revenue distracts from fixing the existential fiscal problems faced by the U.S. The growth rate of health and retirement spending is not a problem that can be fixed with higher taxes. As Jeff Miron wrote in 2013, "If higher taxes have even a modest negative impact on growth, tax increases have no capacity for restoring fiscal balance. That finding leaves expenditure cuts—especially to Medicare, Medicaid, and ACA subsidies—as the only viable avenues for significant reductions in fiscal imbalance."
CBO has similarly warned every year for the past several decades that spending on health and retirement programs cannot continue to grow faster than the economy forever; eventually, something has to give. These major entitlement programs are responsible for almost all of the non-interest spending growth over the next three decades and, as a share of the economy, are projected to increase by 36 percent over the same time. Such rapid health and retirement spending growth is neither caused by nor fixable with the tax code.
If Treasury collected as much revenue as it did in 2000 when it had a record 2.3 percent budget surplus, the U.S. would still have a 2022 budget deficit of about 5.1 percent of GDP (compared to the actual 5.5 percent deficit). Figure 2 shows an illustrative estimate of federal deficits if tax revenue increased permanently to 20 percent of GDP, the high revenue mark from the early 2000s. The only slightly larger deficits under CBO's current law projections show that even significant tax increases cannot compensate for fundamentally unsustainable spending growth.











Debate the Level
After policymakers address the unsustainable growth rate of mandatory spending, they can debate the appropriate size and scope of government. Reasonable people can disagree over the appropriate level of government spending and, thus, the level of revenue.
As I've written before, big government is expensive, and advocates of larger government should be clear that by blaming deficits on tax cuts, they are calling for significantly higher taxes on middle-class Americans. Additional taxes only on the rich are not a sustainable or mathematically feasible way to fund a European-style social welfare state. Paying for the current level of government spending—let alone what some Democrats have proposed—will require an unprecedented tax increase.
Broad-based tax increases are also no guarantee of lower deficits and debt. Historically, new or increased taxes to remedy fiscal imbalances deepen and prolong economic recessions, do not reduce debt‐​to‐​GDP ratios, and are associated with new spending in excess of the revenue raised.
As Congress prepares for the 2025 fiscal cliff when the 2017 tax cuts expire and taxes automatically increase on basically every American, legislators should be clear that by keeping taxes low, they are also committing to constraining the level and growth of federal spending. Without spending restraint, any tax relief will necessarily be short-lived.

I look puzzled or annoyed as the anchorgot my title wrong, suggesting I run NPSIAI have been thinking a lot lately about profs and punditry.  To start, I am just going to accept that profs who appear on TV are "pundits" as the definition of a pundit is: "an expert in a particular subject or field who is frequently called on to give opinions about it to the public."  Yep, that's us, among other folks.  Plenty of profs who aren't pundits, plenty of pundits who are not profs, but those who profess in the media are, indeed, pundits.   This came up last week at the International Studies Association as there was a panel on "How Not To Bridge The Gap" which is about as deceptive as one can get in a panel title since it was really about how to bridge the gap--how to have the academics talk to the policy people and vice versa.  After a couple of decades of Bridging the Gap [BTG], a group dedicated to fostering the exchange, and a few years of a bit of that in a Canadian accent--the CDSN which has as BTG as a founding partner--folks are now asking about whether this is a good thing, whether it is dangerous, how to do responsible engagement, and such.While all of this can be and should be quite complicated, I have a basic take on whether or not to do media stuff (and since I do a fair amount, you can guess where this is headed):We get public money to do our research, so we should give back.  Indeed, many grant applications require a dissemination plan.A fundamental part of professing is to disseminate knowledge.And if not us, then who?This last thing is my focus today and was when I piped up from the audience last week.  That if we don't speak, the media will find someone else to fill that time slot, that page, that podcast, whatever.  So, one must ask themselves if one can bring more to something than whoever else they might get or whether one might not be as fit for that topic or issue than whoever else they might get.This is where I borrow a concept from the analytics revolution in sports.  There have been all kinds of ways to measure the value of baseball players compared to each other, basketball players (one measure is called RAPTOR!), and so on.  My personal favorite happens to be from baseball.  I like it so much both because it has a good conception and has a fun acronym is VORP: Value Over Replacement Player.  This enables one not only to assess how a generic player in their position in the same season or time frame, but to compare players at different positions or in different time frames.  While technology, strategy, and medical care and the rest have changed over time, we can use this measure to figure out the relative value of players from different generations.  Babe Ruth is still #1 followed by Walter Johnson, Cy Young, and then Barry Bonds and then Bonds's godfather Willie Mays (this settles the Mantle/Mays thing).  I am happy to see Tom Seaver above Greg Maddox, that Seaver was much better than the replacement level starting pitcher of his era compared to Greg Maddox to the replacement level starting pitcher of his era.  In basketball, this puts Lebron over Jordan, which folks might disagree with just a bit. The point is not to stir up a debate about sports, but the idea of measuring someone compared the person a team could get that is easily available--off the street, from the waiver wire, from the minor leagues, whatever.  When it comes to media stuff, the producers of the various radio, television, podcast, and other programs need to fill content, so they will grab someone, anyone, to fill in a spot.  So, the point I raised at the conference and part of the reason why I do media stuff is: would we rather have a knowledgeable expert or some schlub off the street?  Of course, they don't get just any schlub, they go to the experts who are already on their rolodex (to date myself even further).  We tend to see mostly the same folks again and again depending on the issue, so the question is, for every expert, are they more expert or less (dare I say it) hacky than the person who might be called instead?  The VORP in sports is easy to calculate even if what goes in the calculations can be and is debated--how much does excellence at anyone time count compared to lifetime achievement, etc.  In punditry, how do we calculate VORP?  It will be less about what is quantified and more about what can be compared and ranked.  So, what may be in the minds of the producers and should be in our minds as we come up with a Value Over Replacement Pundit:How well they know the topic at hand?  Some folks are super sharp at one thing, others know a bit about a lot.  This measure here is about how much they know about the specific topic?What is their range?  How broadly can they speak?  Because you know the anchor is going to go off script and ask questions that are not necessarily in the strikezone.How articulate are they?  Can they speak/write clearly and dynamically?  I will mention my Lebron/Babe Ruth in Canadian circles on this measure below.How measured or responsible are they?  Folks saying that war between US and China is inevitable, for instance, have a lower VORP because they may very well be creating a self-fulfilling prophecy.  My speculating about terrorism in 1996 Lubbock should have set my VORP at a negative number.  On the other hand, I was far more responsible last March about calls for a No Fly Zone than a bunch of retired military officers in the US and Canada.  Availability: in sports, health is a gift/attribute in its own right, which means that some players rank higher because they can play most days.  Kevin Durant's VORP has been hurt by his various injuries.  In the pundit game, the question is whether one is willing to do it a bit, some, or a lot.  This can obviously tradeoff with expertise/responsibility pieces.  There are probably other ingredients/variables, but let's stick with those for now, and folks can suggest additional ones.The first item--how well they know the topic--allows us to bring in the positions from sports.  That one can have a high VORP if one is playing a position they are good at and a low one if they play one that is not their strength.  Babe Ruth has an incredible VORP because he was both a terrific hitter and an amazing pitcher.  So, some folks will have high Value Above Replacement Pundit because they know a lot about a lot, and they have the other key ingredients. In thinking about this and my experiences both in the media and watching other folks, I thought I should use a few key issues to highlight who has a high VORP.  And, yes, this was partially inspired by watching two NPSIA colleagues and one PhD student absolutely rock the Canadian intelligence beat.  So, enough with the explanations and definitions, who has a high VORP in Canada?  Note, this is illustrative, not exhaustive.I think number one on Canadian foreign policy, broadly defined, is Roland Paris.  He brings his years of academic experience on peacekeeping and international relations to bear along with his various times in government at different levels.  He is simply terrific at articulating complex stuff--his quotes today about Biden's visit to Ottawa were both accurate and delightful.  He is also very responsible--he's not going to say something that is wildly speculative.  If I were a producer, I would always go to him first on damn near anything.  When I appeared on TV with him once, I just basically said: "I agree with Roland." It did not make for good tv.  Bessma Momani has wide-ranging expertise, is compelling and clear, so she's a great go-to for Canadian relations with a variety of places.On intelligence matters, Canada has quite a few folks who are super sharp on this: Stephanie Carvin, Leah West, Jess Davis, Artur Wilcyznkski, and Craig Forcese clearly have very high VORPs (I think Amar Amarasingam does too, but I haven't seen as much of his stuff).  Stephanie, Leah, Jess, and Craig have done extensive research, Artur has far more experience than the others in government in so many spots (he is a great podcast co-host for a couple of the podcasts on the CDSN Podcast Network).  Each are quite responsible, sticking within their lanes of expertise, not speculating wildly, and not having any ideological axes to grind (that's a hint for many of the folks who have low VORPs--who tend to dominate the editorial pages).On defence stuff, Thomas Juneau has among the highest VORPs because he has academic and policy expertise, a willingness to do the media stuff, is excellent in both official languages. Stéfanie von Hlatky would have the highest defence VORP except she does not do that much media.  I wish she did more as she is super responsible, knows the Canadian defence scene, knows the US and NATO well, again strong in both languages.  I had fun watching her at a couple of NATO summits where the Canadian media grabbed us to "scrum" with them.  Of the columnists, I think Shannon Proudfoot easily has the highest VORP.  Her columns always are well reported, provide valuable perspective, making one see things from a different angle. Where do I fit in?  I think I have a decent, positive VORP score, but not as strong as those mentioned above.  I am not as articulate or as responsible.  I have a wider range than most, except perhaps Thomas and Roland (reminds me of the polls that show that men are far more confident about landing planes or battling bears), but with that greater willingness to talk about stuff at the edges of my expertise, I say stuff like Ukraine is going to lose the war.  I was wrong (many were wrong about that).  I should have been a bit more circumspect about potential predictions even while being clear as I could why a No Fly Zone was super dangerous. I did have fun saying "your guess is as good as mine" when an anchor went against the instructions asking about the pipeline sabotage.One of the things I have been emphasizing in recent years is saying no to the media where my VORP trends negative or where I know folks who have much more value.  During the Vance/McDonald/Sajjan stuff of two years ago, I kept directing the media to people who studied gender and the military.  I was far more willing to talk when the story focused on civilian control of the military, something I study.  I have declined to speak much about balloons or about election interference as I really don't have that much to say.  I really don't know much about China, for instance.  I will speak beyond my areas of expertise on the Battle Rhythm podcast because it is a smaller audience, I can edit myself afterwards, and my co-host and guests can and will correct me.  For a five minute hit on radio or TV, the anchor person is not going to push back if I say something wrong.  They may want me to do so since it might make for better tv.  Who has negative VORPs, where a replacement pundit available off the street or waiver wire would be a significant improvement?  I could name a few obvious retired senior military officers, but that would be unnecessary.  I could also name some columnists for national papers in Canada including one who used to own a bunch of them before/after? he was convicted.So some caveats here--I don't watch as much tv and I certainly don't listen to too much radio, so I am mostly influenced by the times I have appeared with other folks.  And, yes, most of the people listed above are very good friends.  I don't think I have to agree with someone to give them a high score.... but it probably doesn't hurt. Does that make me biased or do I simply hang with people with high VORPs?  ¯\_(ツ)_/¯There
is a tradeoff I forgot to mention in the first posting of this: if you
say no a lot, they won't come back.  Which can be cool if one does not
want to be bothered.  But saying yes a fair amount means that when I do
say no, I can refer them to sharp, younger people who they don't know
about, and this allows me to connect the media to diverse voices.  And
they often listen.  The media wants good people, but they also have lots
of time pressure, so they often go to the easiest get.  But if you give
them help, they will add to their rolodex. Feel free to nominate in the comments folks in the Canadian IR media space who are at either end of the VORP spectrum or in between.