Today, Michael McFaul analyzes the similarities and differences between the American war in Iran and the Russian war in Ukraine; Amit Seru and David Larcker explain why a move to less-frequent earnings reporting requirements won’t necessarily improve American capitalism; and the Supreme Court of the United States cites Eugene Volokh’s “friend of the court” briefing in a recent high-profile case regarding Colorado’s now overturned ban on certain approaches to talk therapy.
War in Iran
In a column at his Substack, Senior Fellow Michael McFaul pushes back on arguments equating the ongoing US war against the Iranian regime with Russian autocrat Vladimir Putin’s war against Ukraine. McFaul begins by arguing that, unlike peaceful Ukraine with its neighbor Russia, “Iran’s regime has threatened the United States and our allies and partners in the region for decades.” What’s more, the US has no aim in this war to annex Iranian territory. And, McFaul says, “the way American armed forces are fighting against Iran is different from the way Russian soldiers are fighting in Ukraine.” McFaul notes that while he’s a frequent critic of the Iran war’s conduct, he nevertheless assesses “that the differences between the wars in Iran and Ukraine outweigh their similarities.” He concludes, “Trump’s war against Iran is bad, but not nearly as bad as Putin’s war against Ukraine.” Read more here.
Freedom Frequency
Over the past 50 years, quarterly earning disclosures have been a core feature of US public markets, covering how companies account for trillions of dollars in market value. Now the US Securities and Exchange Commission is actively considering shifting to semiannual reporting instead, on the basis that quarterly reporting creates short-term pressures rather than incentives for long-run investing. In a new article at Freedom Frequency, Senior Fellow Amit Seru and Distinguished Visiting Fellow David Larcker explain that although the goal sounds sensible, the effect would be the opposite. “Public markets work because information is shared broadly and regularly. Prices reflect that information, capital flows toward its most productive uses, and managers are held accountable by investors who can observe performance in real time. Quarterly reporting is one of the institutional mechanisms that make this possible,“ they argue. Seru and Larcker assert that, conversely, with fewer checkpoints, insiders operate with less visibility and retain information for longer, providing them with a decisive advantage over other market participants. “For everyone else, the lights dim.” Read more here.
Law and Policy
The Supreme Court, in its March 31 opinion in Chiles v. Salazar, cited Senior Fellow Eugene Volokh’s amicus brief focused on the “proper boundaries of the speech integral to illegal conduct exception.” In this case, the Court held that the First Amendment protects professional-client speech, including counselors’ use of “conversion therapy” with minor patients when that therapy consists solely of speech. In the process, the eight-justice majority rejected the state’s argument that such speech can be regulated as “speech integrally related to unlawful conduct”—and in the process, cited Volokh’s discussion of the speech integral to unlawful conduct exception, which drew from his detailed 2016 academic article on the subject. Volokh provided additional commentary on the case in a post at his blog on the Reason site. Read the amicus brief here.
Answering Challenges to Advanced Economies
At Defining Ideas, David R. Henderson praises a new book by former senator Phil Gramm and economist Donald J. Boudreaux, saying it deserves to be the last word on no fewer than seven stubbornly wrong ideas about the American economy. Gramm and Boudreaux have marshaled new evidence along with familiar arguments, Henderson writes, deftly demolishing myths about Industrial Revolution squalor versus heroic Progressive Era regulation; what free trade does (and doesn’t do) to manufacturing; what really triggered the Great Financial Crisis; and whether inequality in America has grown (hint: it hasn’t). What makes these myths dangerous is that they serve to justify overbearing government regulation and spending to interfere with the free market, Henderson writes. But “if we see a reversal of spending and regulation,” he concludes, “the two authors will surely deserve some of the credit.” Read more here.
Immigration Policy and Economics
A new video from the J-P Conte Initiative on Immigration asks: Do foreign students in US master’s programs crowd out American entrepreneurs or empower them? Although international students are three to four times more likely to found startups than their American classmates, their presence produces a clear positive spillover: For every 10% increase in foreign students in a program, one extra startup is created—half by foreigners and half by Americans. Through co-founding partnerships and exposure to global ideas, foreign students expand the range of opportunities and enhance American students’ tendency to innovate and launch successful ventures. Read more here.
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