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141. Deter, Defend, Repel, and Partner: A Defense Strategy for Taiwan

Author:
Dan Blumenthal, Gary J. Schmitt, Michael Mazza, Randall Schriver, and Mark Stokes
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Taiwan is a great success story. It is a prosperous, thriving democracy living at peace—and it wants to remain at peace. A recent poll shows that more than 90 percent of Taiwanese support maintaining the “status quo,” meaning principally that an overwhelming majority of the island's citizens wants to avoid a conflict with the mainland if at all possible while retaining their de facto sovereignty.
Topic:
Defense Policy, Diplomacy, Peace Studies, and Bilateral Relations
Political Geography:
Israel, Taiwan, and Asia

142. Economic Conditions and U.S. National Security in the 1930s and Today

Author:
Martin S. Feldstein
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
This paper comments on the experience of the U.S. economy in the 1930s, its lessons for managing the current economic downturn, and the relation of U.S. economic conditions to our future national security. Some of the conclusions are: (1) Although the current recession will be long and very damaging, it is not likely to deteriorate into conditions similar to the Depression of the 1930s. Policy makers now understand better than they did in the 1930s what needs to be done and what needs to be avoided. (2) The focus on domestic economic policies in the 1930s and the desire to remain militarily neutral delayed the major military buildup that eventually achieved the economic recovery. (3) A well-functioning system of bank lending is necessary for economic expansion. We have yet to achieve that in the current situation. (4) Raising taxes, even future taxes, can depress economic activity. The administration's budget proposes to raise tax rates on higher income individuals, on dividends and capital gains, on corporate profits and on all consumers through the cap and trade system of implicit CO2 taxes. (5) Inappropriate trade policies and domestic policies that affect the exchange rate can hurt our allies, leading to conflicts that spill over from economics to impair national security cooperation. Reducing long-term U.S. fiscal deficits would reduce the risk of inflation and thereby reduce the fear among foreign investors that their dollar investments will lose their purchasing power. (6) The possibilities for domestic terrorism and of cyber attacks creates risks that did not exist in the 1930s or even in more recent decades. The scale and funding of the FBI and the Department of Homeland Security is not consistent with these new risks.
Topic:
Economics, International Trade and Finance, Terrorism, and Financial Crisis
Political Geography:
United States

143. The United States-Peru Trade Promotion Agreement

Author:
Philip I. Levy
Publication Date:
10-2009
Content Type:
Working Paper
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Bilateral free trade agreements have generally been analyzed as instances of preferential reciprocal tariff liberalization. Viewed through this lens, such agreements raise concerns both about new competition and about trade diversion. The United States-Peru Trade Promotion Agreement, an example of a serious North-South accord, demonstrates that new market access was not a principal Peruvian goal in the trade negotiations. Instead, the agreement was intended to encourage investment by locking in Peru's economic reforms. This motivation has very different implications for the global trading system than a quest for preferential access.
Topic:
International Trade and Finance, Markets, and Treaties and Agreements
Political Geography:
United States, Latin America, and Peru

144. Climategate and Climate Science

Author:
Kenneth P. Green and Steven F. Hayward
Publication Date:
12-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
AEI's environmental team has been especially busy lately responding to numerous press inquiries about the “Climategate” scandal. We reprint below two pieces, one by Steven F. Hayward that appeared in The Weekly Standard, and another by Kenneth P. Green, which appeared on The American. Hayward's piece was mentioned prominently on Fox News Sunday. Green also testified on the science of global warming recently before the Senate Committee on Finance. In addition, Samuel Thernstrom and Lee Lane, who are codirecting AEI's Geo engineering Project, have been following the developments and commenting on them. AEI released an updated version of its Public Opinion Study “Polls on the Environment and Global Warming,” which shows that, even before the latest controversy, opinion about the seriousness of global warming had declined sharply in several recent polls.
Topic:
Climate Change, Environment, and Science and Technology
Political Geography:
America

145. Addicted to the Physician Payment "Fix"

Author:
Bryan E. Dowd
Publication Date:
11-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Congressional mismanagement of Medicare is a bipartisan project in which Democrats and Republicans set aside the rancor of party politics and ideological differences and work hand in hand to run the program into the ground. The latest attempts to "fix" physician payments by replacing a sizeable cut in Medicare fees with a small increase provide the evidence.
Topic:
Debt, Health, Markets, and Politics

146. Building Up to Tearing Down the Wall

Author:
Ronald W. Reagan
Publication Date:
11-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
In 1988, as he was about to step down as president, Ronald Reagan received the Francis Boyer Award, AEI's highest honor. He chose for the theme of his speech that December evening, eleven months before the Berlin Wall fell, the struggle of people everywhere for freedom. In his speech, he anticipated the momentous events that would occur in 1989: “So while our hopes today are for a new era, let us remember that if that new era is indeed upon us, there was nothing inevitable about it. It was the result of hard work—and of resolve and sacrifice on the part of those who love freedom and dare to strive for it.” Freedom works, he said. He saluted the Solzhenitsyns, the Sakharovs, and the Sharanskys, saying, “We have seen the thrilling spectacle of mankind refusing to accept the shackles placed upon us.” As we recall the events of November 1989, it is important to remember the struggle and to recommit ourselves to the hard work of extending freedom to those who have yet to enjoy its blessings.
Topic:
Conflict Resolution, Cold War, and Power Politics
Political Geography:
Russia, United States, and Berlin

147. In Memoriam—Irving Kristol

Author:
Christopher DeMuth
Publication Date:
10-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
AEI senior fellow Irving Kristol—godfather of the neoconservative movement and one of the towering intellectual figures of the twentieth century—died peacefully on September 18 at the age of eighty-nine. Mr. Kristol's connection to AEI began long before he became a full-time scholar at the Institute in 1988. In 1973, he gave the first of AEI's Distinguished Lectures on the Bicentennial of the United States. The lectures were delivered at historic sites around the country, and Mr. Kristol's lecture, “The American Revolution as a Successful Revolution,” was given at St. John's Church in Washington, where many of the nation's presidents have worshipped. We reprint excerpts from it below after a tribute to him written by Christopher DeMuth, the D. C. Searle Senior Fellow at AEI.
Topic:
Cold War, Politics, International Affairs, and Political Theory
Political Geography:
United States and Washington

148. Getting the Story Right: The True Origin of the Financial Crisis

Author:
John H. Makin, Vincent R. Reinhart, and Peter J. Wallison
Publication Date:
09-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
One year ago, on September 14, Lehman Brothers declared bankruptcy. The next day the Dow fell five hundred points. Soon thereafter, the government essentially nationalized AIG, made Goldman Sachs and Morgan Stanley into bank-holding companies, and petitioned Congress for aid. In early September, Fannie Mae and Freddie Mac had been placed in government conservatorship. These events followed the bursting of the housing bubble. We present here three essays written by AEI scholars in the spring and summer of 2009 on the origins of the financial crisis whose reverberations we continue to feel today. Vincent R. Reinhart sets the stage by reminding us of the importance of getting the story of what happened right, as policy recommendations flow from our understanding of what occurred. He also tells us that “the narrative first written about the Great Depression was wrong in many important respects.” John H. Makin and Peter J. Wallison focus on the misguided policies that contributed to the crisis. In a new Economic Outlook, Makin discusses three important lessons of the financial crisis that should be understood in order to enable a faster, more effective policy response to future crises.
Topic:
Economics, Markets, and Financial Crisis

149. China: Bogus Boom?

Author:
John H. Makin
Publication Date:
08-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
China's economic statistics have become the envy of the world. On July 15, China reported a 7.9 percent growth rate for the second quarter of 2009 compared to the same period a year earlier. Meanwhile, China's stock markets are on fire, and its property markets are heating up fast as well. Shanghai's two stock markets are up 75 percent and 95 percent respectively so far this year. The more widely traded Hong Kong Index is up 27 percent, a stellar performance compared to largely flat stock markets in the United States, Europe, and Japan. In even stronger contrast, Russia, which is one of China's emerging-market peers, has seen its economy drop by 10.1 percent during the first half of this year, while its stock market has struggled as well.
Topic:
Economics, Emerging Markets, and International Political Economy
Political Geography:
Russia, United States, Japan, China, Europe, and Hong Kong

150. Can China Keep Growing?

Author:
John H. Makin
Publication Date:
05-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Governor Zhou Xiaochuan's comment is an open acknowledgement that the “adverse feedback loop,” in which financial-sector problems hurt the real economy, which in turn intensifies negative conditions in finance, has hit China hard. China's real growth rate, which peaked at 13 percent in 2007 and is heavily dependent on exports, plunged to 6.1 percent on a year-over-year basis in the first quarter of 2009. Nominal growth, a measure of the current money value of goods and services, fell even more sharply, from 21.4 percent in 2007 to 3.6 percent in the first quarter of this year. The fact that the nominal growth rate is 2.5 percent below the real growth rate suggests that, at least as far as output is concerned, deflation has taken hold at a 2.5 percent rate in China.
Topic:
Economics, Emerging Markets, and International Political Economy
Political Geography:
China