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AT&T/Time Warner foreclosure argument
After five grueling weeks, the Department of Justice's challenge to the proposed merger between AT&T and Time-Warner reached a milestone of sorts on Tuesday with the government resting its case. The centerpiece of the government's argument has been the model and analysis of economist Carl Shapiro, a former Justice Department official now at the University of California at Berkeley predicting the likely behavior of the merged firm. Via REUTERS Shapiro's model suggests that the merged firm will engage in a form of behavior known as strategic foreclosure, where it will engage in strategic bundling of its products and charge higher prices for Read More >>
Sat, Apr 21, 2018
Source: Marc Thiessen Category: MARC THIESSEN
From today's Washington Examiner, my article “On Earth Day, let's appreciate fossil fuels“: On Earth Day, according to various advocates, “events are held worldwide to increase awareness and appreciation of the Earth's natural environment.” As we observe the annual environmental event on Sunday of this week, it might be a good time to appreciate the fact that Americans get most of their plentiful, affordable energy directly from the Earth's “natural environment” in the form of fossil fuels: coal, natural gas, and petroleum. It's largely those energy sources from the natural environment that fuel our vehicles and airplanes; heat, cool, and light our Read More >>
Sat, Apr 21, 2018
Source: Marc Thiessen Category: MARC THIESSEN
For the first time in the history of the republic, it appears increasingly likely that a majority of the Senate Foreign Relations Committee will vote against the president's nominee for secretary of state. If this happens, it would be a black mark not on Mike Pompeo's record, but on the reputation of this once-storied committee. CIA Director Mike Pompeo testifies before a Senate Foreign Relations Committee confirmation hearing on Pompeo's nomination to be secretary of state on Capitol Hill in Washington, U.S., April 12, 2018. REUTERS/Leah Millis There are no instances of a secretary of state nominee ever receiving an unfavorable committee Read More >>
Fri, Apr 20, 2018
Source: Marc Thiessen Category: MARC THIESSEN
AEIPro-network economics is pro-growth economics: A review of ‘Why Information Grows' “Why Information Grows: The Evolution of Order, from Atoms to Economies” (Basic Books, 2015) by MIT's Cesar Hidalgo offers a model of economic growth that eschews the usual suspects of capital, labor, and innovation. Hidalgo, a statistical physicist by training, sees an economy as a “collective computer” formed of myriad human networks. At the heart of Hidalgo's model are matter, energy, and information. By “information,” Hidalgo means the physical order of atoms, how they are arranged. When that order is changed — say when a fancy car hits a wall Read More >>
Fri, Apr 20, 2018
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
The Trump presidency has produced a continual stream of sweeping, yet misinformed, analysis regarding the internal state of the Republican Party. Amongst journalistic, academic, and political commentators today, the condition of opinion within the GOP regarding foreign policy issues is regularly misunderstood. Here are several prevalent and mistaken assumptions that have circulated since November 2016: Among Republican voters, support for American internationalism is dead. Republicans are now pro-Putin. The GOP base strongly opposes free trade. Republicans are deeply divided over President Trump's foreign policy. Trump's foreign policy views are not representative of the median voter. Donald Trump has revolutionized Republican foreign policy opinion. A closer look at Read More >>
Fri, Apr 20, 2018
Source: Marc Thiessen Category: MARC THIESSEN
It is tempting to categorize next week's visit by French President Emmanuel Macron to the United States as a meeting of opposites: Macron the “globalist” supporting free trade and the European Union versus US President Donald Trump, the nationalist and populist. And it's clear their discussions will include tough issues over which they disagree, from the fate of the Iran nuclear agreement to the fight against climate change, all against a background of looming trade wars. But the reality of the two presidents' close relationship has been misinterpreted — mostly because Macron himself has been misunderstood. Despite their radically different platforms Read More >>
Fri, Apr 20, 2018
Source: Marc Thiessen Category: MARC THIESSEN
Do you know why most people are poor, and what would make them better off? Mauricio Miller is pretty sure you do not. In The Alternative: Most of What You Believe About Poverty Is Wrong, he argues that people involved in anti-poverty work today regularly do more harm than good. In fact, he fires staffers within his organization who simply “help” poor families. Low-income families, Miller says, need to be aided to solve their own problems, not temporarily rescued with outside resources. “Helping” people may sound charitable, but it keeps the helper in control, makes the beneficiary dependent, and only offers Read More >>
Fri, Apr 20, 2018
Source: Marc Thiessen Category: MARC THIESSEN
The nation's 2017 NAEP results, often called “The Nation's Report Card,” were just released. The results were not great. AEI's Nat Malkus reviews the data and explains that, while results have stalled since 2015 and seem unremarkable, the details add to the story. Read More >>
Fri, Apr 20, 2018
Source: Marc Thiessen Category: MARC THIESSEN
Why do our courts make decisions about the fate of children on a timeline designed for adults? That's the question that Rachel Schneiter and her family are asking themselves as they await a decision about what will happen to the now-3-year-old baby girl they took into their home shortly after her birth. Schneiter never planned to be a foster mother. A nurse for 18 years in a suburb of Buffalo, she volunteered through a church group to help young, at-risk mothers. One day in 2014, a pregnant mother who already had two small boys at home asked for help setting up a Read More >>
Fri, Apr 20, 2018
Source: Marc Thiessen Category: MARC THIESSEN
Many agree that Facebook needs to make some changes. But those changes are a lot more complicated than the public conversation suggests. Let's discuss three of what would seem to be the simplest moves Facebook could make: tighter standards for political speech, user verification, and allowing people to take their social network with them when they stop using Facebook. Tighter controls on political content seem relatively simple to implement. In fact, a few days before Facebook CEO Mark Zuckerberg came to Washington for congressional testimony, he announced a major policy change to this effect: “Every advertiser who wants to run political or Read More >>
Fri, Apr 20, 2018
Source: Marc Thiessen Category: MARC THIESSEN
how America can win the tech war against china
The U.S.-China trade throwdown isn't just about helping “American steel,” protecting Corporate America's intellectual property, reducing bilateral trade deficits, or really much of what President Trump typically tweets about. To focus exclusively on tariffs or international investment flows misses the big picture. What's actually playing out on a global stage is an escalating conflict to be the technological leader and thus leading economic superpower of the 21st century. President Donald Trump takes part in a welcoming ceremony with China's President Xi Jinping at the Great Hall of the People in Beijing, China, November 9, 2017. Reuters Beijing made its fighting intent clear in Read More >>
Fri, Apr 20, 2018
Source: Marc Thiessen Category: MARC THIESSEN
AEIQuestions you always wanted to ask an economist (but were too afraid to ask): A long-read Q&A with Stan Veuger On this special episode of Political Economy, we structured the podcast around one theme: “Questions you always wanted to ask an economist, but were too afraid to ask.” After soliciting questions from friends, family, and Twitter, we posed them to AEI economist Stan Veuger. Stan Veuger is a resident scholar at the American Enterprise Institute, where his research is in political economy and public finance. He is also the editor of AEI Economic Perspectives. Below is a lightly-edited transcript of our conversation. You Read More >>
Fri, Apr 20, 2018
Source: James Pethokoukis Category: JAMES PETHOKOUKIS

I would caution patience though for those who think an AI-driven productivity boom is right around the corner. Here's McKinsey on the many obstacles to the broad diffusion of AI technology:

Organizational challenges around technology, processes, and people can slow or impede AI adoption

Organizations planning to adopt significant deep learning efforts will need to consider a spectrum of options about how to do so. The range of options includes building a complete in-house AI capability either gradually in an organic way or more rapidly through acquisitions, outsourcing these capabilities, or leveraging AI-as-a-service offerings.

Given the importance of data, it is vital for organizations to develop strategies for the creation and/or acquisition of training data. But the effective application of AI also requires organizations to address other key data challenges, including establishing effective data governance, defining ontologies, data engineering around the “pipes” from data sources, managing models over time, building the data pipes from AI insights to either human or machine actions, and managing regulatory constraints.

Given the significant computational requirements of deep learning, some organizations will maintain their own data centers, because of regulations or security concerns, but the capital expenditures could be considerable, particularly when using specialized hardware. Cloud vendors offer another option.

Process can also become an impediment to successful adoption unless organizations are digitally mature. On the technical side, organizations will have to develop robust data maintenance and governance processes, and implement modern software disciplines such as Agile and DevOps. Even more challenging, in terms of scale, is overcoming the “last mile” problem of making sure the superior insights provided by AI are instantiated in the behavior of the people and processes of an enterprise.

On the people front, much of the construction and optimization of deep neural networks remains something of an art requiring real experts to deliver step-change performance increases. Demand for these skills far outstrips supply at present; according to some estimates fewer than 10,000 people have the skills necessary to tackle serious AI problems and competition for them is fierce amongst the tech giants. Companies wanting to build their own AI solutions will need to consider whether they have the capacity to attract and retain these specialized skills.

While the report is thin on implications for policymakers, the authors suggest a few ideas to encourage the broad adoption of AI: greater public investment in AI research and training programs to nurture more AI talent, open data initiatives, and opening up public-sector data to spur private-sector innovation.

The most overlooked obstacle here though might be public disapproval, if the

AEIAI is the transformational technology of our age … if businesses ever adopt it As I've blogged about at length in this space, the US economy won't see sustained growth unless we can boost productivity. And there are a few different theories out there for why productivity growth has been so sluggish since the mid-2000s. Maybe ideas are becoming harder to find, maybe productivity has increased and we aren't measuring it correctly, or maybe productivity growth is here but it's just not evenly distributed yet. If that last theory is correct, and there's some reason to think it is (per a Commerce Read More >>
Fri, Apr 20, 2018
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEIHow technology affects jobs and wages, in two graphics The Asian Development Bank has issued a lengthy report on technology and jobs. And it's a pretty upbeat one, as described by the Financial Times: The ADB's analysis of 12 developing Asian economies between 2005 and 2015 found that rising demand had more than compensated for jobs lost to automation. The adoption of new technologies, such as modern machine tools and computer systems in factories and offices, had stimulated higher productivity and economic growth. That transformation, it estimated, had created 134m new jobs, compared with the 101m jobs lost to technology. I also wanted Read More >>
Tue, Apr 17, 2018
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEISo when will the next productivity boom happen? Barclays If the US economy is going to generate sustained 3% annual growth, or anything close to that, it will require much faster productivity growth. The bull case looks something like this one, via my AEI colleague Bret Swanson and economist Michael Mandel: The 10-year productivity drought is almost over. The next waves of the information revolution—where we connect the physical world and infuse it with intelligence—are beginning to emerge. Increased use of mobile technologies, cloud services, artificial intelligence, big data, inexpensive and ubiquitous sensors, computer vision, virtual reality, robotics, 3D additive manufacturing, and Read More >>
Tue, Apr 17, 2018
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEIWill the US-China digital cold war hit Apple? The US-China tech/trade war just escalated. You see, ZTE is an important Chinese company. It is the country's second largest telecom equipment maker after Huawei Technologies. It is also the fourth largest seller of smartphones in the United States. And now its future is in serious doubt, thanks to the Trump administration. Reuters reports: The United States has banned American firms from selling parts and software to China's ZTE Corp for seven years, potentially devastating for the telecoms equipment maker and exacerbating tensions between the world's two largest economies. . . . The U.S. Read More >>
Tue, Apr 17, 2018
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEIThe unintended consequences of ending the internet's grand bargain Is the Facebook kerfuffle really about privacy? Or is there something more fundamental happening here? I've written previously about my skepticism that people really value digital privacy as much as the media or activist groups suggest they do. And if Facebook doesn't see an exodus of users after the Cambridge Analytica maelstrom, that will be a powerful bit of evidence my instincts are correct. Facebook CEO Mark Zuckerberg testifies in a House Energy and Commerce Committee hearing regarding the company's use and protection of user data on Capitol Hill in Washington, US, April Read More >>
Mon, Apr 16, 2018
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEIWorrying about trade deficits while pushing fiscal stimulus doesn't make sense One of the tensions in Trumponomics is between his protectionist, trade-deficit focused trade policy and his expansionist fiscal policy. First, a brief economics lesson, courtesy of my colleague Claude Barfield back in 2016: We've had trade deficits for the last four decades because of a simple macroeconomic fact: If you don't save enough — and that's both government saving and government having a surplus and the private sector or individuals saving more than they consume — then you total that up, if you don't have enough, somebody will do it for Read More >>
Mon, Apr 16, 2018
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEIWhat Facebook's trouble says about how much people really care about data privacy Facebook is changing how it handles user data. How could it not given the media and political maelstrom in which it finds itself? Of course I still think that users don't actually value data privacy as much as they say they do or as much as tech reporters think they should. And the early evidence we have about the Facebook data controversy tends to support my position. From Wired: But life's not so bad for Zuckerberg. His exhaustive, highly publicized grilling appears to have had minimal impact on the Read More >>
Fri, Apr 13, 2018
Source: James Pethokoukis Category: JAMES PETHOKOUKIS
AEIAn econ chart that every policymaker should keep handy Capital Economics If I had a Hall of Fame of charts, a version of the above one from Capital Economics would be a charter member. It gives a clear view of the internals of America's growth challenge and in the process suggests solutions: skills, machines, innovation. To be a consistent 3% grower in an aging society, productivity growth will need to be more like it was in the 1995–2007 period (really 1996–2005) and less like it's been over the past decade. And I have written quite a bit about the role of technology Read More >>
Fri, Apr 13, 2018
Source: James Pethokoukis Category: JAMES PETHOKOUKIS