Democracy retreats. Larry Diamond, @hooverinst.
"...The Democratic Recession: Breakdowns and Erosions
The world has been in a mild but protracted democratic recession since about 2006. Beyond the lack of improvement or modest erosion of global levels of democracy and freedom, there have been several other causes for concern. First, there has been a significant and, in fact, accel- erating rate of democratic breakdown. Second, the quality or stability of democracy has been declining in a number of large and strategically im- portant emerging-market countries, which I call “swing states.” Third, authoritarianism has been deepening, including in big and strategically important countries. And fourth, the established democracies, beginning with the United States, increasingly seem to be performing poorly and to lack the will and self-confidence to promote democracy effectively abroad. I explore each of these in turn.
First, let us look at rates of democratic breakdown. Between 1974 and the end of 2014, 29 percent of all the democracies in the world broke down (among non-Western democracies, the rate was 35 percent). In the first decade and a half of this new century, the failure rate (17.6 percent) has been substantially higher than in the preceding fifteen-year period (12.7 percent). Alternatively, if we break the third wave up into its four component decades, we see a rising incidence of democratic failure per decade since the mid-1980s. The rate of democratic failure, which had been 16 percent in the first decade of the third wave (1974–83), fell to 8 percent in the second decade (1984–93), but then climbed to 11 per- cent in the third decade (1994–2003), and most recently to 14 percent (2004–13). (If we include the three failures of 2014, the rate rises to over 16 percent.)
Since 2000, I count 25 breakdowns of democracy in the world—not only through blatant military or executive coups, but also through subtle and incremental degradations of democratic rights and procedures that finally push a democratic system over the threshold into competitive au- thoritarianism (see Table). Some of these breakdowns occurred in quite low-quality democracies; yet in each case, a system of reasonably free and fair multiparty electoral competition was either displaced or de- graded to a point well below the minimal standards of democracy...."
Why do prime-age men prefer not to work for a living. @larry_kudlow Scott Winship @swinshi Director of Social Capital Project, Joint Economic Committee, Office of Vice Chairman @senmikelee .
• The inactive, not the unemployed, are behind falling male work rates. While it became more difficult for job seekers to find work starting in the 1970s, the decline in work was primarily a consequence of more men not looking for work; that is, of rising inactivity. The inactivity rate for prime-age men rose from under 2 percent in 1930 to 4 percent in 1970 and to 11.5 percent by 2016.
• While many observers assume that increasing inactivity rates reflect more men “dropping out” of the labor force out of frustration with the job market, relatively few prime-age inactive men fit the picture. Just 3 percent meet the official federal definition of a “discouraged worker,” and in 2014 just 7 percent of prime-age men inactive the entire preceding year said their reason for not working was that they could not find a job. The increase in their ranks accounted for just 9 percent of the rise in full-year inactivity from 1968 to 2014.
Few inactive men say they want a job in a typical week, and most of the increase in inactivity has involved men who do not want a job. This study estimates that only about one in four inactive men in 2014 wanted a job, and only about 25 percent of the increase in inactivity in a typical week from 1969 to 2014 involved men who wanted a job. Less than one-third of non-disabled inactive men want a job.
• Increasing male inactivity has been accompanied by rising, not falling, pay. After accounting for inflation, median pay among all men was higher by 23 to 31 percent in 2016 than in 1967, and the pay of less-skilled workers was 10 percent higher.
• Understanding why prime-age male inactivity has risen requires focusing on disability. No fewer than 58 percent of prime-age inactive men report being disabled. While they make up a smaller share of inactive men than in the past, they still play a major role in rising inactivity.
GETTING AN EDUCATION ISN'T ABOUT MONEY & entitlement programs in amerika "the cost of good intentions"
Schooling success isn't about the money. Eric Hanushek, Paul Peterson, @hooverinst.
"...Coleman found that variations in per-pupil expenditure had little correlation with student outcomes. Although this was one of the key findings of the report, little attention was paid to this inconvenient fact. At the time, the Johnson administration was trumpeting a federally funded compensatory education program that was supposed to equalize educational opportunity by concentrating more funding on students living in low-income neighborhoods. But the finding gradually assumed greater importance in policy debates, as extensive subsequent research engendered by the Coleman Report reinforced this conclusion.
"A defining moment came in the 1970s, when the California Supreme Court in Serrano v. Priest decided that in order to ensure equal educational opportunity for all children, all school districts in California must spend equal amounts per pupil, instigating a wave of school-finance court cases across the country. If expenditures must be equal in order for opportunity to be equal, then the amount spent per pupil must be critically important to student learning. Despite the Coleman findings, the claim that money matters was routinely made in courtrooms in nearly every state, provoking a bevy of research on the effects of school expenditure on student achievement. This is not the place to explore a debate that has relied on a mixture of scientific evidence, professional punditry, and misleading claims. Given the fiscal stakes involved, it is hardly surprising that the conversations have been politically charged and have led to an ongoing battle under the misleading sobriquet “money doesn’t matter...."
THE HIGH COST OF GOOD INTENTIONS: ENTITLEMENT PROGRAMS IN AMERIKA
AMAZON BOOKS a.co/6S174Ka
Federal entitlement programs are strewn throughout the pages of U.S. history, springing from the noble purpose of assisting people who are destitute through no fault of their own. Yet as federal entitlement programs have grown, so too have their inefficiency and their cost. Neither tax revenues nor revenues generated by the national economy have been able to keep pace with their rising growth, bringing the national debt to a record peacetime level.
The High Cost of Good Intentions is the first comprehensive history of these federal entitlement programs. Combining economics, history, political science, and law, John F. Cogan reveals how the creation of entitlements brings forth a steady march of liberalizing forces that cause entitlement programs to expand. This process―as visible in the eighteenth and nineteenth centuries as in the present day―is repeated until benefits are extended to nearly all who could be considered eligible, and in turn establishes a new base for future expansions. His work provides a unifying explanation for the evolutionary path that nearly all federal entitlement programs have followed over the past two hundred years, tracing both their shared past and the financial risks they pose for future generations.
HOW REAGAN'S TAX CUTS SHOULD SHAPE TODAY'S G.O.P. AGENDA IN CONGRESS & JAMES CAESAR ON TRUMP'S IDEOLOGICAL VACANCY
Republicans need tax principles. Like these.
Michael R. Strain | Bloomberg ViewMichael Strain argues that effective tax reform should be guided by big-picture goals and principles. Strain outlines some of these goals such as a tax system that treats similarly situated people equally and reform that encourages long-run economic growth. He believes that tax reform needs to both reduce distortions and encourage fiscal responsibility to promote economic growth. Strain argues that the primary purpose of the tax system is to provide the government with revenue -- that revenue should be raised in the least distortive way possible.
Best part of Republican tax plan is repeal of the state tax deduction
Alex Brill | The HillAlex Brill argues in favor of repealing the state and local tax (SALT) deduction, believing it would be an important move toward broadening the tax base. He believes that repealing the SALT deduction alone can finance a cut in the top tax rate to 35 percent and a reduction in other rates, preserve the tax code’s progressivity, substantially increase the number of taxpayers on the standard deduction, and cut taxes for half of all filers. Brill elaborates on and provides a graphical illustration of the SALT deduction here. His illustrations show that by removing the unfair tax advantage people in high-tax states currently have, this change will result in a tax cut for 80 million taxpayers.
AEI tax brief: The child tax credit versus the earned income tax credit
Aparna Mathur and Cody Kallen | AEI AEI Tax Briefs aim to offer insights using open source models. In this AEI Tax Brief, Aparna Mathur and Cody Kallen explore doubling the child tax credit and expanding the earned income tax credit. They find that the benefits of the EITC expansion would be more concentrated among low-income households, but the benefits of doubling the child tax credit can spread across the income distribution.
Single payer: What is it?
Joseph Antos | AEIdeas
THE TURNING POINT HAS ARRIVED: THE AGENDA TO UNSEAT THE PRESIDENT USING THE 25TH AMENDMENT, WILL IT WORK?
The New American Civil War: Tiberius vs. Rome, Trump vs. Washington. Michael Vlahos @jhuworldcrisis
All of which means that Republicans in Congress need to think of themselves as governing with an independent President—if they don’t already. This doesn’t mean joining Democrats as “the Resistance.” But it does mean acting on their own to fulfill their legislative promises with or without the support of Mr. Trump. If the President goes his own way, at least Republicans can point to votes for legislation that they put on his desk.
Start with the GOP’s main priorities after Labor Day, which include lifting the debt ceiling, funding the government, and passing a budget outline that sets the stage for tax reform. Congress needs to move on all of them no matter what Mr. Trump tweets from the sidelines.
On the debt ceiling, the smart political play is to pass an increase with GOP votes and move on. Some conservatives want to tie policy reforms to the increase, but Democrats know Republicans will get the blame if there’s a default on U.S. debt. GOP voters won’t care about the debt limit in 2018 if Republicans have enough other policy victories.
On funding the government, Republicans in Congress will get no benefit from a shutdown fight over building a border wall. Two-thirds of the country doesn’t support an expensive and largely symbolic wall, and even most Republicans who do won’t like a shutdown to pass it. The GOP should pass a budget that has as many of its priorities as possible, and more money for border enforcement ought to satisfy the immigration restrictionists. The physical wall is Mr. Trump’s personal preoccupation. He can veto a bill without it, but then he’d be responsible for the shutdown.
On tax reform, the White House and Congress are still working together because Mr. Trump is leaving the details to economic adviser Gary Cohn and Treasury Secretary Steve Mnuchin. Mr. Trump could muck it up at any moment with a call for higher income-tax rates, but Congress will have to ignore it. Mr. Trump will have little choice other than to sign whatever Congress sends him if he wants the political victory, and he needs a win as much as Congress does.
Republicans also can’t count on Mr. Trump to provide them any political air cover for tax reform. Taxes were supposed to be the GOP theme during the August recess, but none of the speeches or TV appearances are breaking through because the President can’t give up the spotlight, even if he is hurting himself. The business community and Republicans in Congress will have to sell reform.
Legislative success—especially on tax reform—is the best way Republicans can protect themselves from any Trump undertow in 2018. They need a record to change the campaign subject from whatever the President is tweeting a year from now when he might be contemplating a political affair with Nancy Pelosi.
In defense of NAFTA trade and in doubt of China trade. @richardaepstein @hooverinst
"...Each of these three pieces benefits the United States. Therefore, so does the package taken as a whole. Trump thinks that the trade deficit means that the United States has somehow lost in international trade. But he would never go so far as to say that other nations should shut down their trade with the United States because we run a trade surplus with them. In both domestic and international markets, we shouldn’t impose any external “fairness” constraint on the outcome of voluntary transactions.
The situation with China is far different, because the Chinese only pay lip service to free trade in setting their trade policy. Their chief misdeed is to engage in the widespread theft of intellectual property, which includes the theft of trade secrets, the infringement of patents, and the shipment of counterfeit goods into international markets. The second vice is that China often ties the entrance of American firms into the Chinese market to the willingness of those firms to share their intellectual property with their local Chinese partners who can, of course, use that property in unrelated transactions to obtain an illicit comparative advantage.
These classic hold-up games often lead to a major decline in trade. No state inside the United States is allowed to condition the entry of out-of state businesses into their market on the condition that they surrender intellectual property or agree to special taxes, or to sacrifice access to federal courts. The dominant nondiscrimination rule under the United States Constitution precludes the states from taking these one-sided actions. The result is that the domestic market is free from counterproductive trade wars among the states.
The hard question is what to do in response to outright theft and these illicit tie-in arrangements. Trump has threatened to initiate an enforcement action under Section 301 of the Trade Act of 1974 to unilaterally “impose trade sanctions on foreign countries that either violate trade agreements or engage in other unfair trade practices.” The problem here is that proceeding under this section puts the United States at risk of violating the World Trade Organization’s elaborate system of adjudication to sort these matters out. Stopping unilateral action cuts out the risk of abuse by home countries in favor of their own goods. But the flip side here is that it allows chronic abusers like the Chinese to string out proceedings, which in turn allows them to reap gains from their illicit practices for an indefinite period.
The Chinese insist that any sanctions from the Trump administration would lead to a trade war that neither side could win, given the certainty that the Chinese would retaliate in kind against any unilateral American action. But doing nothing is an implicit ratification of the status quo ante of China’s ongoing trade abuses. At the same time, the Trump administration needs China at the table to discuss its actions in the South China Sea and how best to contain North Korea...."
NAFTA negotiations: AEI’s terms of trade
AEI staff and Claude Barfield | AEIdeas Last week, the first round of NAFTA renegotiation began. Since its passage, AEI experts have played an important role in shaping the debates on the social and economic impacts of NAFTA and other trade issues. Claude Barfield, a resident economics scholar and trade policy expert, has examined whether an expanded NAFTA or other trade agreements will become building blocks or stumbling locks on the future path of trade.
In his 2015 working paper, Barfield provides detailed background analysis and policy recommendations for the area of economics and trade. Specifically, Barfield assesses the objectives that underpin the Global Internet Strategy (GIS) program goals, such as protecting and promoting freedom of expression and combating fragmentation of the Internet. He urges future US administrations to uphold and prioritize the vital digital agenda in order to maintain a free and open internet.
Recently, Barfield has discussed the possible opportunity for NAFTA renegotiations to set precedent for e-commerce rules. He argues that the administration should take advantage of its opportunity to regain some of the initiative for a future pro-market digital trade regime.
Trump’s Talk of Leaving NAFTA Is Thankfully Just Bluster – Allan Golombek, RealClearMarkets
Fix NAFTA Once and for All – Richard Trumka, USA Today
What might have been
James C. Capretta | National Review Online
Here’s how a president really pushes tax reform
James Pethokoukis | AEIdeas
Taxes matter, but maybe not in the way most people think. Most of the time, anyway
James Pethokoukis | AEIdeas