Economy | Areas

However, there are existential defense threats for which the nation is not prepared—existential in the sense that they could make the continued functioning of democratic government within U.S. borders nearly impossible.

These threats get short shrift in national strategy, either because they have never occurred before or because there are no easy remedies. Unfortunately, the vulnerability of the U.S. to the threats could make them attractive options for America’s enemies in the future.

February 3, 2020

Cyber War Happening Now – We Are Not Ready

January 16th, 2020- Issue Brief by GPI President Paolo Von Schirach, We are at war. Aggression which one day can take devastating dimensions is targeting America on a daily basis. I am talking about cyber warfare. Unfortunately, it is very hard to label cyber war as “war”, simply because it is vastly different from the “conventional war” we are used to study, discuss and prepare for.

January 16, 2020

Back to the economics of 1792

January 16th, 2020- Issue brief by GPI Fellow Martin Hutchinson, When William Pitt the younger made his great and optimistic Budget speech of 1792, he attributed Britain’s increased prosperity not to technological improvement but to the wealth-enhancing effect of the compounding increase in the country’s capital stock.

Only a generation later, in the administration of Robert, Earl of Liverpool, was technological change given credit for the country’s growth and prosperity. Today, as productivity growth slows or even halts, we may be returning to the economics of 1792, in which only capital increase brings greater wealth. This has uncomfortable implications.

Europe’s Dreams

January 13th, 2019- Issue Brief by GPI President Paolo Von Schirach, We heard from Ursula von der Leyen, the new President of the European Commission, that she will lead a “geopolitical” Commission. So, we are led to believe that, under her leadership, there will be deep thinking and strategizing about how to effectively combine the significant European economic, business, investments and military assets so that the EU will play a leading role on the world stage.

January 13, 2020

War With Iran?

January 10th 2020- Issue Brief by GPI President Paolo Von Schirach, The killing of General Qassem Soleimani, the legendary head of the Iranian al Quds force, is a game changer in America’s creeping hostilities with Iran. I wrote recently that unless the US wants to engage in a conflict over Iraq, this poor, war-torn country is lost to us, on account of the solid Iranian grip on it.

January 10, 2020

Brexit 2020

January 8th 2020- Issue Brief by GPI Senior Adviser Michael Binyon, at the end of this month, Britain is to leave the European Union, 47 years after it joined what was then the Common Market. It will be a shock – although long anticipated – for the other 27 members. No country has ever left the EU, and this spectacular no-confidence vote will test the hopes of the remaining members to stay committed and united.

January 8, 2020

Raising The Temperature In The Middle East

January 6th 2020- Issue brief by GPI President Paolo Von Schirach, After the unexpected airstrike that killed IRGC General Qassem Soleimani, right outside the Baghdad airport, analysts began speculating what Trump’s end game may be. In other words, is this just an ill-conceived, spur of the moment decision? Or is this targeted assassination of the master mind of all the Iran-led irregular forces operating with impunity in the Middle East part of a carefully orchestrated US “plan”?

January 6, 2020

Towards a Working-class Tory Britain

January 6th, 2020- Issue Brief by GPI Fellow Martin Hutchinson, By definition, all substantial election victories involve winning seats that had not previously been held. However, in this case, because of the interaction of the election with the Brexit decision, many industrial and mining constituencies in the north of England and north Wales, that had been Labour heartlands for generations, were taken by the Conservatives. By and large the big-city constituencies in the region remained Labour; it was the less concentrated urban areas, albeit still mining/industrial, that switched to the Conservatives. As one Labour leader said on the BBC’s Election Night program: “we haven’t lost the big city working classes, but we do seem to have lost the small-town working classes.”

Good Values at the Root of Utah’s Success

December 12th, 2019- Issue brief by GPI President Paolo Von Schirach, A recent article pointed out how, year after year, Utah is on top of the national list of the best states to do business in America, not to mention that the state gets very high marks on good governance, while in Utah there is very low unemployment. And in Utah kids attending public schools on average do rather well compared to the rest of the U.S., notwithstanding the fact that in Utah spending per pupil is quite below the national average. Well, what is the secret of this success?

December 20, 2019

The Fake Aramco IPO

December 18th 2019- Issue Brief by GPI President Paolo Von Schirach, There were great expectations about the Aramco IPO. It was announced long ago by Saudi authorities, and then postponed several times. Well, now we know why it took so long, and why in the end the IPO did not take place in New York or London. Indeed, the Saudi government, the sole owner of this energy giant, could not be sure about the response of savvy international investors. Would they really buy shares at a price that implies an overall $ 2 trillion valuation for Aramco? May be not. And so the Saudis, decided to play it safe. They would do this at home, in an environment and with investors they could control. And so they used the Riyadh Tadawul stock exchange (where less than 200 stocks are traded) as the venue for this “historic” IPO.

December 19, 2019

Yale Model Goes Whiffen-Poof

December 12th, 2019- Issue brief by GPI Fellow Martin Hutchinson, All 60 of the United States’ leading university endowments underperformed a cheap “tracker fund” over the past decade, according to a study reported in the Financial Times. The culprit is the “Yale Model” of university endowment investment, whereby they focus on private equity, hedge funds and unquoted investments rather than on ordinary stock markets. From this data, the Yale Model clearly has not worked, at least in the last decade. It is worth examining what went wrong.

December 16, 2019

Stunning Victory for Boris Johnson, Yet Major Challenges Ahead

December 12th, 2019- Issue Brief by GPI Senior Adviser Michael Binyon, To the astonishment of pollsters and voters, Boris Johnson, Britain’s embattled prime minister, has won a resounding election victory, giving the ruling Conservative party their biggest majority for more than 35 years and ending three years of argument over Brexit. He now has a clear mandate for Britain to leave the European Union within the next six weeks.

How A Dangerous Court Ruling Could Give China The Lead In 5G Technology

December 12, 2019- Issue brief by GPI Senior Advisor Loren Thompson, Despite a chronic trade deficit in advanced technology products, the United States remains a global trendsetter for networking and telecommunications. U.S. companies are currently in a battle with Chinese state-influenced enterprises like Huawei that will determine whether American dominance continues into the era of 5G communications.

December 12, 2019

The Case for Gold Grows Ever Stronger

December 11th, 2019- Issue brief by GPI Fellow Martin Hutchinson, In 1982-2000, I avoided large losses by completely ignoring gold as an investment vehicle — I started thinking about it again when in July 2000 I noticed that Vanguard’s precious metals fund was its only loser over the preceding 5 years. Since 2008, I have invested consistently in gold mining stocks, and enjoyed good years (2009-10, 2016-19) and bad years (2011-15). Yet the intellectual case for gold, as a store of reality in an increasingly unreal world, grows stronger by the day. Let me explain

December 11, 2019

$22B Navy Contract Highlights Why GD’s Electric Boat Is One Of The Most Valuable Franchises In U.S. Defense

December 10, 2019- Issue brief by GPI Senior Advisor Loren Thompson, This week’s announcement that the Electric Boat unit of General Dynamics will receive the biggest shipbuilding contract in Navy history underscores the unique role that “EB” (as it is often called) plays in U.S. defense. The contract provides $22 billion for construction of nine Virginia-class attack submarines, an amount that could increase to $24 billion if the Navy exercises the option for a tenth sub.

This isn’t the first time Electric Boat has received the biggest naval shipbuilding contract ever. The $17 billion contract for the last “block” of Virginias, awarded in 2014, was also described at the time as unprecedented in size.

December 10, 2019

President Trump Should Offer to Sell M-1 Tanks to Poland

December 4th, 2019- Issue brief by Daniel Gouré, When Poland joined the NATO alliance in 1999, its military was saddled with rapidly obsolescing platforms and equipment largely of Soviet design. In response to the Russian seizure of Crimea and its massive military buildup, Warsaw initiated a major modernization program intended to provide its military with advanced capabilities. One key element of that effort is to upgrade or replace the Polish army’s fleet of old armored fighting vehicles, particularly its battle tanks.

December 5, 2019

Should Washington Sell The B-21 Bomber To Australia?

December 4, 2019- Issue brief by GPI Senior Advisor Loren Thompson, the U.S. Air Force is developing a long-range bomber that will be able to hold any target at risk, anywhere in the world. It is called the B-21 Raider, and will be the most survivable, versatile strike aircraft ever built. It is likely to eventually replace all the heavy bombers in the current U.S. fleet. On November 6, the Australian Strategic Policy Institute published an article in its journal The Strategist arguing that Australia should buy 12-20 B-21s from the United States. The article was written by senior analyst Marcus Hellyer, who convincingly laid out the geopolitical, operational and budgetary logic of such a move.

December 4, 2019

How Poor Countries can Beat De-Globalization

December 2nd, 2019- Issue brief by GPI Fellow Martin Hutchinson, The outstanding winners from the 1991-2016 policies of globalization were dwellers in poor countries. With international sourcing much cheaper and easier and foreign investment flows soaring, well-run poor countries could attract capital, jobs and export-producing industries in profusion, producing revenues that could educate their workforce and hugely raise their living standards. Overall, for poor countries, the world has now become harder. Yet even without globalization, well-run poor countries can still become middle-income and then rich.

December 2, 2019

After Decades Of Warnings, U.S. Gets Serious About EMP Dangers

November 21, 2019- Issue brief by Paul Steidler, For decades government policy experts and scientists have known about the dangers of electromagnetic pulse (EMP) events which could cripple large sections of the power grid for long periods of time. EMP disturbances occur naturally, through solar storms. They could also happen due to high-altitude nuclear bomb detonations or through on-the-ground attacks by terrorists or saboteurs.

November 21, 2019

Can Boris Johnson win the UK elections?

November 15, 2019- Issue brief by GPI Senior Adviser Michael Binyon, Not since 1923 has Britain held a general election in December – a month most politicians want to avoid as voters are more preoccupied with Christmas shopping than politics. But this time there was little choice: Boris Johnson’s government had lost its majority, Parliament was deadlocked over Brexit, splits and tensions were destroying both main parties, and voters had lost patience with the political wrangling and with all politicians. They will now have a chance to sweep out hundreds of MPs and vote for a whole range of different faces on December 12th.

November 15, 2019

Once It Gets Green Light From FAA, Boeing Still Faces Complicated Task To Get 737 MAXs Off The Ground

November 13, 2019- Issue brief by GPI Senior Adviser Loren B. Thompson, "Consider, for instance, the basic steps involved in returning the plane to service. First the Federal Aviation Administration (FAA) needs to approve a software update to the MCAS flight control system and a redesign of the plane’s twin flight control computers so that the MAX can be recertified as airworthy. Then the FAA needs to approve revised training requirements and supporting documents for crews who will be flying the plane. Then the grounding order is lifted, after which each carrier must submit proposed training programs to regulators for approval, training is conducted, and the MAX can finally begin carrying passengers again".

November 13, 2019

Congressional Dysfunction Threatens To Halt Trump Defense Buildup

November 11, 2019- Issue brief by GPI Senior Adviser Loren B. Thompson, Over the last several weeks, there has been growing concern on Capitol Hill that Congress might not pass a budget for the 2020 fiscal year that began October 1. When these situations arise, as they almost always do at the beginning of a fiscal year, government shutdown is averted by passing a Continuing Resolution (CR) that maintains prior-year spending levels into the new year.

November 11, 2019

If President Trump Isn’t Reelected, What Will That Mean For The Military?

November 4, 2019- Issue Brief by GPI Senior Adviser Loren B. Thompson, President Trump isn’t likely to be removed from office through the impeachment process. Even if every Democratic member of the chamber voted for removal in a Senate trial, 20 Republican senators would have to turn on Trump to expel him from office. That outcome looks exceedingly improbable today.

The more plausible scenarios for Trump’s departure would be either resignation or failure to win reelection. The president shows no sign of resigning, so next year’s election looms as the biggest opportunity for those who say the nation can’t stand another four years of Trump to seat a more congenial chief executive in the White House.

November 4, 2019

Towards a Low-Overhead 2020s

October 30, 2019- Issue Brief by GPI Fellow Martin Hutchinson, The Western world approaches the 2020s at the top of a boom, with asset prices and leverage at all-time highs and interest rates at all-time lows, yet with disappointing expectations when it comes to a higher standard of living. The extreme policies that have produced this state of affairs are unsustainable over another decade, even if we were mad enough to try. The solution will be unpleasant but inevitable: the overhead “fat” that has accumulated throughout the world economy must be eliminated — a process that will inevitably be painful.

October 30, 2019

The Blessed World of Low Asset Prices

October 2, 2019- Issue brief by GPI Fellow Martin Hutchinson, After a decade of ultra-low interest rates, we have become used to ultra-high asset prices – in big city real estate, stocks, bonds, tech start-ups, art and collectibles, and pretty well everything else you can think of. It is too depressing to think of the damage that will be done by the inevitable bursting of this universal bubble. Let us rather look forward to say 2030, to a world of low asset prices and historically average interest rates, and remind ourselves of that world’s advantages.

October 2, 2019

Five Reasons The Air Force’s Digital Century Series Is Doomed To Failure

October 1, 2019- Issue Brief by GPI Senior Adviser Loren B. Thompson, The Air Force has embarked on a revolutionary approach to aircraft, satellite and software development that it hopes will greatly compress the time required to bring major advances into the active force. Dubbed the “Digital Century Series” after a burst of early Cold War innovation, the new approach could reduce the time required to develop new combat aircraft to five years, with additional years of time saved in developing military spacecraft and major software advances.

October 1, 2019

Brexit Woes Continue in The UK

October 1, 2019- Issue Brief by GPI Fellow Graham Bardgett, Will U.K. Prime Minister Boris Johnson pull a rabbit out of his Magician’s hat and get a new deal from the EU? Or is he determined to drive on over the cliff edge using Emergency Powers to thwart the law?

A vote of no confidence in the UK Government aimed at replacing Boris Johnson as Prime Minister is imminent, the Westminster leader of the Scottish Nationalist Party Ian Blackford said Sunday 29 September. But its success relies, he said, on all opposition parties in the UK Parliament joining forces to prevent the Prime Minister allowing the country to crash out of the EU without a deal amid warnings of catastrophic economic consequences.

On October 15, Britain stops being a democracy

September 30, 2019- Issue brief by GPI Fellow Martin Hutchinson, By a vote of 298 to 56 on September 4 and a second similar vote on September 9, the House of Commons voted to approve an election on October 15, yet because of a supermajority provision unknown to the British constitution, Parliament was not dissolved. A Parliament you cannot dissolve is no longer a democratic institution, any more than was the Rump Parliament after Pride’s Purge. On October 15, therefore, Britain will turn the clock back 370 years, into the world of Praise-God Barebone. It will then need a Cromwell, or better still a Restoration to return it to democracy and legitimate rule.

September 30, 2019

The Universal Postal Union: Why Its Upcoming Extraordinary Congress Is A Big Deal

September 25, 2019- Issue Brief by Paul Steidler, The Universal Postal Union sets the rates and regulatory requirements governing the shipment of packages internationally. The Lexington Institute’s Paul Steidler spoke with postal expert Jim Campbell about the organization’s September 24-26 Extraordinary Congress at which the U.S. is pushing for major reforms and threatening to leave the organization if these reforms are not enacted. Mr. Campbell has been an observer at Universal Postal Union meetings for decades. The U.S. delegation to the upcoming Extraordinary Congress will be led by Peter Navarro, Assistant to the President and Director of Trade and Manufacturing Policy.

September 25, 2019

Poland Is Becoming the Keystone of NATO’s Evolving Security Architecture

September 18, 2019- Issue brief by Dan Gouré, The Republic of Poland is rapidly becoming the critical member of the NATO Alliance in its increasing efforts to deter Russian military threats and counter Moscow’s attempts to subvert European democracy. Poland is no free rider when it comes to European security. It is spending more money in terms of a percentage of GDP than other NATO countries. The Polish military has a serious modernization program underway that over time promises to make it a serious counterweight to the Russian Army.

September 18, 2019

The President Is Right — China’s Fentanyl Is Killing Too Many Americans

September 17, 2019- Issue Brief by Paul Steidler, Kudos to President Trump for tweets tearing into China and President Xi Jinping on Friday for not stepping up to stop fentanyl shipments to the United States. With 47,600 opioid deaths in 2017 alone, this crisis must end.

The president should double down while sharpening and refining his messaging. And he should do so regardless of the ups and downs of tariff negotiations.

China has become the worldwide manufacturing hub of opioids, and with that has arisen criminal businesses that export fentanyl and other deadly narcotics to the United States. These businesses are sophisticated and slick: they operate through well-designed websites that include online chats, negotiate for bulk purchases, take bitcoin payments and even specify shipping preferences.

September 17, 2019

A leverage tax will solve funny money problems

September 17, 2019- Issue Brief by GPI Fellow Martin Hutchinson, We seem doomed to another round of monetary “stimulus” from the Fed and the European Central Bank, at a time when real interest rates are already substantially negative. This has caused crazy leverage all over the global economy, with such madness as Boeing (NYSE:BA) in a highly cyclical business, operating entirely without stockholders’ equity. Very well, if we can’t get the monetary madmen at the world’s central banks to raise interest rates to their proper level, let’s find a fiscal solution to the problem, which will also reduce the world’s yawning budget deficits. I propose a leverage tax.

Business Roundtable amputates Capitalism’s Invisible Hand

August 26, 2019- Issue brief by GPI Fellow Martin Hutchinson, The Business Roundtable last week produced a 400-page publication claiming that its members should no longer look first to profitability but should follow the interests of stakeholders, including employees and the environment. This is pabulum we are used to from the titans of Big Business, who are no longer truly capitalist in our distorted low-interest-rate economy. The problem is, that by downplaying the central tenet of capitalism, they may, like the acolytes of central planning, produce hugely sub-optimal economic results.

August 26, 2019

No Brexit without a deal on the Irish Border

August 22, 2019- Issue brief by GPI Fellow Graham Bardgett, Diplomatic relations between the Republic of Ireland and the UK Government appear to have hardened in relation to the increasing prospect of a “No Deal on Brexit”. In Dublin, the Deputy Prime Minister Simon Coveney, who is also the Republic’s Minister for Foreign Affairs, has said that Ireland would not be carrying out bilateral negotiations with the UK in relation to no-deal Brexit planning.

August 22, 2019

Type Two Diabetes Is Preventable, But Nobody Says It

August 22, 2019- Issue Brief by GPI President Paolo Von Schirach, I recently read a very well researched article on the growing cost of treating millions of diabetics in the United States. It appeared in a major national newspaper and it was written by a well-known public policy scholar. The writer provided up to date data on the alarmingly large dimension of this disease and how much it costs to the affected individuals, insures and the US Government. The scholar in the end provided his thoughtful policy recommendations.

Is Britain getting ready for Brexit?