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6721. A Rotten Money Regime is Responsible for Pandemic and War Inflation

Author:
Brendan Brown
Publication Date:
10-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
Who is responsible for the Great Pandemic and War Inflation of 2021–22? Is it Federal Reserve Chair Jay Powell, former President Donald Trump, President Joe Biden, or President Vladimir Putin? The answer is that the buck stops at a rotten monetary regime—the so-called “2-percent-inflation standard.” Trying to blame particular individuals may help those who gain from the present monetary status quo. Yet blaming them absolves the monetary regime, which is trampling upon the green shoots whose growth is essential for the renaissance of competitive free-market capitalism. If the United States had a good money regime when first the pandemic and then the Russian war struck the economy, the great monetary inflation that these shocks spawned would not have occurred. The current money regime might well have done better with more capable leadership and good luck—but the regime’s deep flaws prevented the possibility of an overall good outcome. Furthermore, even if the pandemic and war had not struck, the bad money regime was producing bad outcomes—including economic sclerosis with sluggish growth rates for productivity and living standards while advancing monopoly capitalism. These outcomes could well have gotten a lot worse.. This policy memo focuses on the shocks of the pandemic and war rather than what could have happened without them. However, it does venture into the counterfactual of how a good money regime would have responded to those shocks, while helping demonstrate what has gone wrong. Demonstrating the links between the rottenness of the monetary system and the high inflation during the pandemic and Russian war requires sharing with the reader a preview of the differences between good and bad money regimes. A broader analysis of these should follow in subsequent policy memos
Topic:
Economics, Inflation, Fiscal Policy, and COVID-19
Political Geography:
North America and United States of America

6722. The Mixed Record of China’s Belt and Road Initiative

Author:
Thomas J. Duesterberg
Publication Date:
10-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
China’s Belt and Road Initiative (BRI), a signature program of Xi Jinping, has had undoubted success in supporting Xi’s ambitions to reestablish China as a global leader while strengthening its mercantilist economy. Nonetheless, developed and developing countries are reconsidering the program because of its success—largely for China itself—and because of the global economic and political crises since the onset of the COVID-19 pandemic. BRI also has increasingly visible problems caused by its operating structure, prompting participants and developed countries whose geoeconomic and geopolitical interests are undermined by the program’s expansion to reassess it. Continued BRI growth is at best questionable and probably unlikely in the wake of growing pushback to the program as well as growing problems inside China itself.`
Topic:
Economics, Infrastructure, Belt and Road Initiative (BRI), and Xi Jinping
Political Geography:
China and Asia

6723. Democratic Backsliding in the Indo-Pacific

Author:
Hudson Institute
Publication Date:
11-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
A negative trend of democratic recession has steadily unfolded across the Indo-Pacific region since the 2010s. Subregionally, Southeast Asia has suffered from the most severe drop in democracy scores, while East Asia and South Asia have experienced a moderate decrease. Oceania remains the most democratic subregion and has achieved a slight increase in its democracy scores. There has been a remarkable shift of balance from democratic advancement to democratic backsliding in the Indo-Pacific. In the three years from 2019 to 2021, the percentage of political regimes experiencing democratic backsliding surpassed those making democratic advancement. Evidence also shows that democratic recession is much more pronounced in populous societies than in sparsely populated societies. Overall, both the number and percentage of people living under autocratic-leaning regimes and autocratic regimes have reached record high levels. Democratic recession in the Indo-Pacific is caused by the coupling of domestic and geopolitical forces. Domestically, democratic recession has principally been driven by deep-rooted cleavages inherent within the countries and territories where illiberal strongmen, including populist leaders, army generals, and nationalist state leaders, exploit such cleavages to reinforce their repression of democracy. Geopolitically, under a multipolar Indo-Pacific, illiberal powers including China and Russia are expanding their spheres of influence by providing support to illiberal strongmen across the region. Traditionally, “democracy” and “security” are seen as two separate fields in the policy world. The major findings of this report, which documents the coupling of domestic and geopolitical forces in causing democratic recession across the Indo-Pacific, raises questions on the validity of the conventional thought pertaining to democracy promotion and security competition. Today, the Indo-Pacific region presents the free world with a double-challenge of democratic recession and security competition, indicating that it’s the time to tear down the longstanding artificial wall between democracy and security. There is an urgent need to invest in new knowledge infrastructures that can provide integrated strategic analysis to policymakers and practitioners.  
Topic:
Authoritarianism, Democracy, and Geopolitics
Political Geography:
Indo-Pacific

6724. Eleven Myths and Realities about Biden’s Missile Defense Review

Author:
Rebeccah L. Heinrichs
Publication Date:
11-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
On October 27, 2022, the Biden administration released the public version of the Missile Defense Review (MDR). The document is commendable in some respects and is concerning in others. Below are some myths and realities about the Biden MDR.
Topic:
Defense Policy, Arms Control and Proliferation, Weapons, Missile Defense, and Joe Biden
Political Geography:
North America and United States of America

6725. US Needs to Play Larger Role as Swing Producer of Oil and Gas in the Current Crisis

Author:
Thomas J. Duesterberg
Publication Date:
11-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
In response to Russian aggression in Ukraine, European nations have drastically reduced imports of crude oil, refined petroleum products, and natural gas from Russia. The 2021 levels of these energy imports were around 2.2 million barrels per day (mbd) of crude oil, 1.2 mbd of refined products, and 155 billion cubic meters (bcm) of natural gas on an annual basis.In addition to extreme difficulties in obtaining new sources of natural gas and to a lesser extent oil, the price increases throughout Europe since the onset of the war have been of historic proportions. In the days following the invasion, natural gas prices shot up by 62 percent, and UK energy prices were up by 150 percent. The full impact of the war, along with the related need to rein in the highest inflation numbers in over 40 years, has pushed Europe into a recession that threatens households and small businesses as well as European manufacturers’ ability to remain competitive. As a result, if the region cannot quickly assemble alternative supplies, the European commitment to assist in containing Russian aggression may weaken.
Topic:
Economics, Oil, Gas, Crisis Management, Supply Chains, Energy, and Russia-Ukraine War
Political Geography:
Europe, North America, and United States of America

6726. US Reengagement with Pakistan: Ideas for Reviving an Important Relationship

Author:
Husain Haqqani
Publication Date:
11-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
The US-Pakistan relationship has gone through many changes. The relationship had a high point when President Dwight Eisenhower described Pakistan as the ‘‘most allied ally of the United States,” and another high point occurred when President Ronald Reagan said that “the American people support close ties with Pakistan and look forward to expanding them.” The relationship has also had low points, such as when in January 2018 President Donald Trump said, “The United States has foolishly given Pakistan more than $33 billion in aid over the last 15 years, and they have given us nothing but lies and deceit, thinking of our leaders as fools. They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!” US administrations going back to President Eisenhower have pinned great hopes on their alliance with Pakistan only to be disappointed and frustrated. For policymakers in both countries, some of the most important recent issues have been Pakistan’s poorly veiled support for the Taliban insurgency in Afghanistan, its backing for jihadi groups targeting Kashmir, its close embrace of China, and its expanding nuclear arsenal. Successive American administrations have assumed that with the right kind of incentives—economic and military—Pakistan would finally change how its policy diverges from US interests. However, neither the award of military and civilian aid nor the cutoff of aid has been able to change Pakistan’s existing national security paradigm and the policies framed by its security establishment. Pakistan, for its part, has been upset as it believes it has offered a fair exchange to the US for its aid by abetting US strategic plans: containment of communism in the 1950s and 1960s, military assistance against the Soviets in Afghanistan in the 1980s, and post-2001 logistical and political support for the American military mission. Pakistan complains that Washington does not respect its contribution or fully appreciate its security threats, regional concerns, and aspirations.
Topic:
Foreign Policy, Economics, Bilateral Relations, and Strategic Engagement
Political Geography:
Pakistan, South Asia, North America, and United States of America

6727. Advancing the Quantum Advantage: Hybrid Quantum Systems and the Future of American High-Tech Leadership

Author:
Arthur Herman
Publication Date:
11-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
Quantum computers mark a transformational revolution in information technology. Whereas most computers process data using bits that consist of either a zero or one, quantum computers can use those digits simultaneously through superposition.1 The many resulting benefits will include the discovery of new drugs, new processes for carbon capture and advanced battery research, and a new exactitude in weather prediction, including in dealing with climate change.2 All in all, experts expect the global quantum computing industry to grow to $450–850 billion in value in the next 15 to 30 years.3 Yet because of the challenges of engineering qubits—the physical basis of quantum computing—most authorities push the timeline for full-scale quantum computer commercialization beyond 2040 and as far as 2050. Even some quantum experts do not expect any big breakthroughs until the 2030s at the earliest. The true path to the quantum future is the combination of quantum and classical digital technology, especially in computing, which will powerfully accelerate access to the potential benefits of quantum information science. While key players in the industry, including IBM and Microsoft, have recognized the potential synergy of hybrid architectures and applications, the federal government needs to expand its attention and resources devoted to this aspect of securing America’s quantum future and its leadership in the twenty-first century.
Topic:
Defense Policy, National Security, Science and Technology, Leadership, Innovation, and Quantum Computers
Political Geography:
North America and United States of America

6728. Attracting and retaining talents in the EU What role can the EU play in ensuring a sustainable and competitive ecosystem for labour migration?

Author:
Marcel Muraille
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
When the European Commission unveiled its New Pact on Migration and Asylum in September 2020, one of its most decried shortcomings was the lack of specific initiative to develop legal avenues of arrival in the EU, especially in the area of labour migration. On 27 April 2022, the Commission presented a new package of initiatives which aims at both reducing irregular immigration and addressing labour shortages by simplifying aspects of the legal routes and stays into the EU, and proposed a number of steps to operationalise the Talent Partnerships, a unique framework to stimulate mutually beneficial international mobility and to match labour market demands and skills needs between Member States and third countries. The EU Talent Partnerships will build on previous experiences and lessons learnt from a handful of EU-funded pilot projects on labour mobility that were launched following the adoption of the Joint Valletta Action Plan in 2015. While these pilot projects have offered an opportunity to experiment with different options on how to meet labour market demands in the EU, they have only achieved relative success due to the difficulty of mobilising the private sector and, more generally, the competitiveness of EU labour markets. Despite its fragmented competences on labour migration, the EU still has room to play to increase the attractiveness of its Member States’ labour markets and to facilitate the involvement of the private sector in recruiting candidates internationally. This policy brief seeks to provide insights into the role of the EU to improve private sector engagement and develop a sustainable and competitive ecosystem for future labour mobility schemes.
Topic:
Migration, Regional Cooperation, Labor Issues, and European Union
Political Geography:
Europe

6729. Europe’s Energy and Resource Challenge The Arctic Is Part of the Solution

Author:
Marie-Anne Coninsx and Karen van Loon
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
The EU’s increased climate ambitions require unprecedented growth in renewable energy and a diversified supply of critical raw materials. Building long-term partnerships and investing in innovation will be vital to pave the way for a clean and secure energy future. With energy being used as a prominent geopolitical weapon and energy prices soaring, the need for enhanced energy security and reliable resource suppliers is essential. The EU has realized it must reduce its natural resources’ dependence to ensure its prosperity, safeguard its interests, and reinforce its strategic autonomy. Especially the European Arctic region should be taken into account when considering the role it can play as a provider of renewable energy, sustainable development, and a reliable supplier of critical raw materials. Despite the specific challenges and costs associated with its cold and vulnerable climate, the region has certain advantages over parts of the world where political instability or low environmental standards are problematic. With its available resources, expertise, and technological innovations, the Arctic, which is often called an innovative testbed and a high-tech knowledge hub, can be instrumental for the EU to realize its Green Deal objectives, end its dependence on fossil fuels, strengthen its autonomy, and ensure its prosperity.
Topic:
Energy Policy, Regional Cooperation, Natural Resources, and European Union
Political Geography:
Europe and Arctic

6730. Stabilizing the European Continent Reflections on the Future of EU Enlargement

Author:
Jean De Ruyt
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
Since the decision to accept Croatia as a candidate member in 2011, the debate in the European Union about its enlargement has been rather subdued. But in 2022, after the bloody invasion of Ukraine by Russian troops, the new European security architecture that the EU (and NATO) tried to build after the end of the cold war has been profoundly shaken. We thought we could manage our ambiguous relationship with Russia and the European members of the ex-Soviet Union through dialogue and economic partnerships. We underestimated the urgency of stabilizing the Western Balkans through EU accession. After membership was offered to Croatia, gestures have been made – more bureaucratic than political – to negotiate the accession of other Western Balkan countries. But ‘enlargement fatigue’ fast developed – ignoring the fact that Russia and China were growing as non-democratic competitors and that Turkey was drifting out of the Western values system. Time has come now to redraw the map. The EU, NATO and the G7 reacted to the Russian aggression in Ukraine with a spectacular show of unity. In the European Council of June 24, 2022, candidate status has been offered to Ukraine and Moldova as well as a membership perspective to Georgia, and a meeting with the leaders of all Balkan countries has revived their hope for a reinvigoration of their own accession. Even if the war in Ukraine is still ongoing, it is time to prepare public opinion in the EU to this new approach to enlargement policy – starting with the fulfilment of the promises we made to the Western Balkans countries as early as in 2003 at the Thessaloniki summit. Looking also where the enlargement of the EU should end, in order to restore as best as possible ‘stability’ on the continent, the aim of the European project from the start. The basic premise that has to be kept in mind from the outset, is that the launching of the European community, its transformation into a Union, and its step by step enlargement, contrary to what Vladimir Putin pretends, has nothing to do with imperialism – nor a secret American plot to prolong or revive the cold war. It aims only at reinforcing the stability of the continent. The purpose of this article is to demonstrate this premise through the history of EU enlargement, and to look at how future steps in this direction could make this happen.
Topic:
Security, NATO, Regional Cooperation, and European Union
Political Geography:
Europe