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1. AI and the US Economy: Optimism, Pessimism, or Realism?

Author:
Fredrick Hernandez, Zach Moller, and Gabe Horwitz
Publication Date:
01-2024
Content Type:
Special Report
Institution:
Third Way
Abstract:
There were 130 websites on the internet in 1993; today there are 1.1 billion.1 Over those 30 years, the US economy quadrupled in nominal size and tripled in per capita income.2 The digital age has been very good for America. But it has also concentrated wealth and opportunity. The richest American in 1993 would only be the 101st richest today in inflation-adjusted dollars.3 There are now 735 billionaires living in America today, compared to fewer than 75 in the world in 1993.4 Meanwhile, the gains for the middle class were not stellar. Real median household income grew a solid, but not spectacular, 32% during the internet age. Most of that gain accrued to the two-fifths of working age America with a college degree.5 “50% to 70% of the changes in the US wage structure are intimately linked to automation, particularly digital automation,” MIT economist Daron Acemoglu estimates.6 That was the digital age. What about the artificial intelligence age? Ask McKinsey partner Michael Chui about AI and he says “it can be great not only for companies but for humankind.”7 But Eliezer Yudkowsky, co-founder of the Machine Intelligence Research Institute, said that if someone builds an over-powered AI, he expects “that every single member of the human species and all biological life on Earth dies shortly thereafter.”8 What seems clear is that whether we’re addressing the future of humankind or the well-being of the workforce, policymakers and industries must make intentional choices to get the best of AI and avoid the worst. Since AI will change the way we work and learn, this paper unpacks different economic projections to give policymakers a better read on what this technology will do to everything from American GDP to skill training. Broadly speaking, there are three distinct perspectives on AI and the economy. Optimists predict AI will elevate the working class, accelerate our national prosperity, and lower costs. Pessimists say AI will contribute to income inequality in the United States, jobs will be automated out of existence, and large corporations will gain far more than workers and families. Pragmatists accept AI will have positive benefits to the economy but acknowledge the mixed bag of how it will affect jobs and generally call for specific actions to mitigate harms and spread benefits. Below, we explore the key takeaways from each perspective. This is a product in a multi-year series to help educate policymakers on the implications and policy choices confronting Congress and the Administration on next generation Artificial Intelligence.
Topic:
Science and Technology, Economy, Artificial Intelligence, Digital Technologies, and Optimism
Political Geography:
North America and United States of America

2. Washington's and Taiwan's Diverging Interests Doesn't Make War Imminent

Author:
Hargisl Shirley Martey
Publication Date:
02-2024
Content Type:
Special Report
Institution:
Third Way
Abstract:
We are a month from the Taiwan 2024 election that sent shockwaves around the world. President-elect, Lai Ching-te (賴清德), dared to utter the world ‘independence” in a strike against the longstanding One China Policy (一个中国政策) in his successful campaign to lead the nation. The election was important enough for an increasingly assertive President Xi Jinping (习近平出席) to try (and fail) to influence the election’s outcome. Xi has been rattling cages for the last several years and has made no secret of his desire to bring Taiwan under Beijing’s thumb without explicitly ruling out the use of force. Meanwhile, a busy President Biden has had his hands full keeping allies committed to Ukraine, battling Putin-sympathetic members of Congress, while also dealing with cascading crises in Israel and the Middle East. With that as our backdrop, does Lai’s election, Xi’s frustration, and Biden’s preoccupation mean we are closer to conflict in the Taiwan Strait? In this brief analysis we argue that at present the answer is “no.” And we make this call by looking at the vantage points and early actions of each country. For America, the Taiwan election has put the country on alert. For Taiwan, domestic concerns are mainly driving voters – not cross-Strait policy. For the People’s Republic of China (PRC; 中华人民共和国), ignore the rhetoric because they’ve followed their Taiwan election disappointment by returning to their standard playbook.1 But stay tuned…. perhaps they’re saving the fireworks for Lai’s May 20 inauguration.
Topic:
Foreign Policy, National Security, Politics, Elections, and Strategic Interests
Political Geography:
China, Taiwan, North America, and United States of America

3. Competing Values Will Shape US-China AI Race

Author:
Valerie Shen and Jim Kessler
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Third Way
Abstract:
President Biden’s AI executive order reflects a set of values recognizable to all Americans: Privacy, equal treatment and civil rights; free speech and expression; the rule of law; opportunity and free market capitalism; pluralism; and advancement of global leadership as the beacon of a free world. President Xi Jinping’s government has also issued AI regulations with values recognizable to China: Collectivism and obedience to authority; social harmony and homogeneity; market authoritarianism and rule of state; and digital world hegemony to restore China’s rightful place as the Middle Kingdom. The United States and China may share similar broad goals for “winning” AI along the lines of leading innovation and advancement, spurring broad-based economic growth and prosperity, achieving domestic social stability, and becoming the clear global influencer for the rest of the world—but they define those goals and seek to achieve those ends through very different values. Those values embedded in our respective AI policies and underlying technology carry high-stakes, long-term national and economic security implications as US and Chinese companies compete directly to become dominant in emerging global markets. They also share similar fears that reflect each country’s values. China worries that AI could cause social unrest if information to a sheltered population is too real and unfiltered. America fears that AI could cause social unrest if information Americans receive is too fake. And that massive disinformation and algorithms that rile the population could threaten our democratic system. Why do these value differences matter when it comes to the AI race? Below, we outline six contrasting values that we believe will be the most determinative in how the US-China AI competition plays out. We argue that understanding our different values-based approaches illuminates our respective advantages and disadvantages in this competition. It assesses who is currently set up to “win” across key metrics and determines how to lean into our democratic advantages or mitigate some practical disadvantages compared with the PRC, this will ultimately win the AI marathon.
Topic:
Science and Technology, Artificial Intelligence, and Strategic Competition
Political Geography:
China, Asia, North America, and United States of America

4. Introducing Third Way’s US-China Digital World Order Initiative

Author:
Valerie Shen and Jayson Browder
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Third Way
Abstract:
If it wasn’t clear three months ago, it is clear now: the next global era will be defined by democracy versus autocracy. In this competition, a new and decisive divide pits America’s approach of “digital democracy” against China’s approach of “digital autocracy.” This great divide places the US and allies on one side and China's unfettered access to sensitive data on the other. China’s digital authoritarianism has been described as "one giant QAnon" and is ubiquitous among the 1.4 billion inhabitants of the country. Moreover, one of the greatest threats to American national security interests is if China prevails in exporting and normalizing its model of digital supremacy. China’s global network of surveillance systems is antithetical to liberal democratic values, as it monitors, punishes, and conditions citizens, as well as influences them through automated disinformation campaigns. China’s ambition for global digital supremacy is real and supported by aggressive diplomatic efforts and massive financial investments. The effort by the United States and like nations to maintain a peaceful and prosperous world order will require a level of sophistication and commitment unrivaled in our history. China is not only an adversary. It is sometimes a partner whose massive economy is deeply entwined with that of the US and other friendly nations. This is not the zero-sum game of the Cold War conflict, and the hope is that it never becomes so. Will liberal democracies strengthen and proliferate or weaken and dwindle in the 21st century? The Chinese state intends to shape the global digital order in its image by redrawing technological norms and standards. Ultimately, the US-China national security competition may hinge on who sets the digital world order.
Topic:
Science and Technology, Authoritarianism, Democracy, Digital Economy, Innovation, and Rivalry
Political Geography:
China, Asia, North America, and United States of America

5. Three Reasons Why CHIPS-plus is a Big Win for US National Security

Author:
Tom Klein
Publication Date:
08-2022
Content Type:
Commentary and Analysis
Institution:
Third Way
Abstract:
On August 9th, 2022, President Biden signed vital bipartisan legislation to compete with China. H.R. 4346, called the CHIPS and Science Act or “CHIPS-plus,” would pave the way for nearly $280 billion in incentives to boost US-based chip manufacturing, scientific research, technology standards setting, and STEM education. These initiatives directly protect our immediate security vulnerabilities in the US military and support our long-term national security competition with China by promoting democratic norms and spurring critical defense innovations.
Topic:
Security, National Security, Science and Technology, Military Strategy, Innovation, and CHIPS
Political Geography:
China, Asia, North America, and United States of America

6. 2020 Country Brief: Afghanistan

Author:
Third Way
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Third Way
Abstract:
After 19 years of war in Afghanistan and a peace agreement signed with the Taliban, it’s time for the United States to withdraw. Although the United States has slowly reduced troops in Afghanistan, the Trump Administration has left the remaining troops vulnerable to the Taliban and to Putin’s Russia, which is paying bounties to Afghans for murdering American soldiers.
Topic:
Military Strategy, Political stability, Military Intervention, Peace, and State Building
Political Geography:
Afghanistan, Russia, Europe, Middle East, North America, and United States of America

7. 2020 Country Brief: Iran

Author:
Third Way
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Third Way
Abstract:
A nuclear-armed Iran is an unacceptable threat to America and our allies. But because of Donald Trump, we are closer to—not farther from—this nightmare scenario. Donald Trump chose a bellicose, chaotic, go-it-alone strategy toward Iran. He blew up the Iran Deal, the international agreement that froze Iran’s nuclear weapons program, because it was negotiated by Barack Obama. When he blew it up, our European allies were shocked—and for the first time ever, they sided with Iran to preserve the deal over the Trump Administration. And that’s what just happened again at the United Nations in August of this year. Now it will be more difficult to stop Iran’s malign activity in the future. President Obama brought international pressure to bear to force Iran into a difficult choice: they could have an economy or nuclear weapons, but not both. Iran chose an economy, and in doing so, accepted restrictions on its nuclear program and submitted to international inspections. In return, the United States, our European allies, Russia, and China began to resume economic activity with Iran. After freezing Iran’s nuclear program, the United States could have begun dealing with Iran’s other malign activity. Unfortunately, against the advice of his senior national security advisors and allies, President Trump unilaterally withdrew from the Iran Deal. Then he threatened our negotiating partners with sanctions for attempting to salvage the deal. And when that didn’t work, in January, he ordered a unilateral strike to kill one of Iran’s senior military leaders, Qasem Soleimani, risking outright war. Despite all this, he signaled he was open to negotiations with Iran but has not indicated what a successful agreement would include. Trump’s chaotic, bellicose strategy has yielded no positive results. Future policymakers will need to rebuild the coalition to deal with Iran and develop a long-term strategy to get Iran to abandon its nuclear ambitions, end its support for terrorists, and become a responsible global player.
Topic:
Diplomacy, International Cooperation, Nuclear Weapons, Military Strategy, and Conflict
Political Geography:
Iran, Middle East, North America, and United States of America

8. Unpacking US Cyber Sanctions

Author:
Allison Peters and Pierce MacConaghy
Publication Date:
01-2021
Content Type:
Commentary and Analysis
Institution:
Third Way
Abstract:
Malicious cyber activity poses one of the greatest threats to America’s national, economic, and personal security. Yet, the perpetrators of these crimes largely operate with pure impunity and face little consequences for their actions. This is particularly the case for cybercriminals who cost the US economy anywhere from $57 billion to $109 billion in 2016 alone.1 Since 2015, the United States has imposed targeted sanctions (e.g., asset freezes, travel bans) on over 300 individuals and entities in response to malicious cyber activity.2 Many of these sanctions were issued under the cyber-related sanctions program administered by the Department of Treasury and established by a series of Executive Orders under Presidents Obama and Trump and bills passed by Congress.3 Sanctions have largely been imposed on individuals with ties to Iran, Russia, and North Korea, and, in about half of these cases, sanctions have followed indictments. An overwhelming majority of these sanctions have targeted individuals with suspected links to government entities and, only recently, have cyber sanctions targeted cybercriminals.4 As targeted sanctions increasingly become a tool deployed by the US government to punish malicious cyber actors, it remains unclear whether they are having an impact in changing behavior. Research on the impact of sanctions more broadly indicates that sanctions can be an effective tool to impose consequences on bad actors and change their actions when employed multilaterally, as part of a coherent strategy, and effectively messaged.5 However, imposing sanctions on malicious cyber actors without continuously reassessing their impact and the expected reciprocal actions by the target(s), risks a number of potentially negative outcomes. While Congress introduced legislation in the 116th Congress to impose new or codify existing cyber-related sanctions into law,6 it has not exercised the necessary oversight over the Executive Branch’s strategy in issuing cyber-related sanctions and determining their efficacy. With other countries now following America’s lead in issuing these sanctions, the time is ripe for the new Congress to push for an inter-agency, holistic assessment of the impact of US cyber-related sanctions.7 And with cybercrime increasingly threatening all sectors of the US economy, Congress must call for an evaluation as to whether sanctions on non-state cybercriminals should increasingly be used.
Topic:
Science and Technology, Sanctions, Cyberspace, and Digitalization
Political Geography:
North America and United States of America

9. Taking Action on Cyber Enforcement: Assessing US Legislative Progress in the 116th Congress

Author:
Michael Garcia and Pat Shilo
Publication Date:
02-2021
Content Type:
Commentary and Analysis
Institution:
Third Way
Abstract:
The 116th Congress experienced events like no other in American history, including unprecedented levels of malicious cyber activity. Global estimates say that ransomware attacks have increased by 148% since February 2020, with many US hospitals and schools falling victim and having their operations suspended.1 Leading up to and during the pandemic, Members of the 116th Congress responded and drafted cybersecurity legislation, introducing 316 bills to tackle the issue—a 40% increase from the previous Congress. This memo presents a comprehensive analysis of the cybersecurity legislation introduced in the 116th Congress and is a successor to our memo assessing the cybersecurity legislation in the previous Congress. Unlike the 115th Congress, the two chambers of the 116th were each under the control of a different party. Still, more than half of the introduced bills were bipartisan, including 85% of the bills signed into law. However, only 11% of the introduced bills focused on imposing consequences for the human actors behind cyberattacks, such as imposing sanctions or strengthening laws to prosecute criminals to hold them accountable for their actions. Following the trend of past congresses, most of the bills focused on protecting data and securing critical infrastructure. But while defending data and infrastructure is important, the lack of legislation to address the challenges of imposing consequences on the human actor suggests that Congress should prioritize introducing and passing bipartisan legislation that reduces the impunity with which malicious cyber actors, particularly cybercriminals, act. Here are the main takeaways from the bills introduced last Congress: Cybersecurity-related legislation increased by 40% since the 115th Congress. Of the 316 bills introduced, 14 became law, with nine related to appropriations or agency authorizations legislation. However, only 36 of the 316 bills introduced in the 116th Congress, and just three of the 14 provisions signed into law, focused on imposing consequences on the human actors behind cyberattacks. Cybersecurity remains a largely bipartisan issue. Over 50% of all legislation and 85% of all bills signed into law had a bipartisan co-sponsor.
Topic:
Security, Science and Technology, Cybersecurity, Legislation, and Cyberspace
Political Geography:
North America and United States of America

10. Follow the Money: Few Federal Grants are Used to Fight Cybercrime

Author:
Michael Garcia
Publication Date:
02-2021
Content Type:
Special Report
Institution:
Third Way
Abstract:
Like traditional crime, not all cybercrime rises to the level that requires a federal response. And like other crimes, victims will call upon state and local law enforcement to respond.1 They are unprepared. The 18,000 law enforcement agencies in the United States lack the tools, personnel, and resources to respond to cybercrime effectively. State and locals have turned to federal funding to fill these gaps, but federal government grants do not prioritize combatting cybercrime. The Justice Department (DOJ) has never identified cybercrime as an “Area of Emphasis” for their main criminal justice grant that awards state and local criminal justice agencies $400-$550 million annually.2 And while DOJ and the Department of Homeland Security (DHS) provided nearly $2 billion that state and local officials could use for cyber enforcement purposes in Fiscal Year (FY) 2019, data from DHS implies that very little is used for cybercrime. Only 2% of all DHS preparedness grant programs were used for all cybersecurity needs in FY 2019.3 Moreover, just three grants in FY 2019 were solely dedicated to cybercrime with a total budget of $12.7 million.4 As a result, only 45% of local law enforcement agencies have access to adequate digital evidence resources, according to one survey. This leads to a backlog of un-analyzed evidence needed to investigate cybercrime and a sense of futility about law enforcement’s ability to close cases.5 While Members of Congress have introduced several bills to create dedicated cybersecurity grant programs for state and local entities, these proposals tend to not include cyber enforcement needs as an eligible expense.6 Moving forward, Congress should: Call on DOJ and DHS to prioritize combatting cybercrime as a main law enforcement issue within their grants. Require prioritization of cyber enforcement needs in grant programs administered by DOJ and DHS in annual appropriations bills; and List cyber enforcement spending as an eligible expense in any bills creating new cybersecurity grant programs for state and local governments.
Topic:
Crime, Law Enforcement, Cybersecurity, Police, Justice, and Cyberspace
Political Geography:
North America and United States of America