This Friday, John Cochrane and Amit Seru call on Kevin Warsh’s Federal Reserve to focus on reforming financial regulations; Mike Kuiken and Randy Schriver point out how China is benefiting and learning from the wars in Ukraine and Iran, with an eye toward Taiwan; and Eric Hanushek places a recent uptick in student achievement scores in the context of education outcomes so far this century.
Financial Regulation
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Senior Fellows John H. Cochrane and Amit Seru argue in this op-ed at The Washington Post that reforming financial regulations should be high on the list of priorities for recently confirmed Fed Chair Kevin Warsh. “The US financial regulatory regime failed catastrophically in 2008,” the authors write. But in their view, the post-crisis reforms, including “the Dodd-Frank law and the Fed’s subsidiary regulation,” only extended the pre-crisis approach of “managing asset riskiness.” The authors also trace how the 2023 collapse of Silicon Valley Bank “was fueled by earlier Fed errors.” Today, Seru and Cochrane conclude, “Warsh need not reform the big banks. . . . He should focus on simple truths: A crisis is a run and only a run is a crisis. Somebody losing money on a risky investment is not a crisis.” Read more here.
Confronting and Competing with China
In a piece for The National Interest, Distinguished Visiting Fellow Mike Kuiken and coauthor Randy Schriver—both commissioners of the congressionally mandated US-China Economic and Security Review Commission—examine China’s role in the wars in Ukraine and Iran. “Washington should stop asking China for help on Ukraine or Iran,” they argue, because “Beijing is reaping the benefits of both conflicts and sees no cost in its support for Moscow and Tehran.” They show how China is offering “material support for aggression and terrorism,” in exchange for performance data on weapons systems and components deployed on battlefields in central Asia and Eastern Europe. Putin’s Russia, a “junior partner” to China, “is doing China’s dirty work: bleeding Europe, fixing Washington’s attention, and field-testing the tools of a Pacific war.” Read more here.
Reforming Education
“New results from the National Assessment of Educational Progress [NAEP] released on June 10 have offered what may initially appear to be a glimmer of sunshine on an otherwise gloomy landscape of US education,” Senior Fellow Eric Hanushek reports at Education Next. “Scores of 9-year-olds tested in 2025 as part of NAEP’s Long-Term Trend assessment ticked upwards from 2022 levels in both reading and math,” he writes, enough to raise scores to a pre-COVID-19 level. But Hanushek emphasizes that student scores had already been falling prior to the pandemic, since 2013. This leads the distinguished education scholar to argue that “we need to rethink how we operate our schools,” including by introducing strong educator and administrator incentives tied to student achievement. “Because schooling is locally administered,” Hanushek notes, “the federal role should center on support, not control, including activities such as data collection, research, and incentives to promote innovation and improvement instead of mandates and regulations.” Read more here.
Answering Challenges to Advanced Economies
Pete Klenow has spent his career tackling some of economics’ biggest questions: Why do some countries grow rich while others remain poor? What drives long-run prosperity? And how can policy foster innovation and productivity? In this episode of Capitalism and Freedom in the Twenty-First Century, Policy Fellow Jon Hartley sits down with the Stanford professor of economics to discuss Klenow’s influential research on sticky prices, development accounting, economic growth, and the allocation of resources across firms and industries. The conversation explores how economists measure the sources of growth, why misallocation can hold back entire economies, and what Klenow’s research reveals about productivity differences across countries such as China, India, and the US. Hartley and Klenow also examine the evolution of macroeconomics, the role of monetary policy, and the potential impact of artificial intelligence on innovation, productivity, and future economic growth. Watch or listen here.
Library and Archives News
The Hoover Institution Library & Archives has acquired a collection of correspondence, photographs, printed material, and ephemera formerly belonging to Hildy Jarman, a talented Allied translator during World War II. Born in Strasbourg, France, on November 6, 1910, Jarman was educated at the Sorbonne in Paris and the University of Bristol in England. She lived through the London Blitz during World War II and was selected to translate at the Nuremberg war trials. After teaching in England and Switzerland following the war, she eventually moved to Palo Alto, California, where she taught French and German at Castilleja School for 21 years and was known by students and staff as “Madame Jarman.” Jarman’s papers mainly concern her time abroad, preceding her career at Castilleja, and include materials on the war crimes trials investigations. Noteworthy items include correspondence between Jarman and her husband, US Army Major General Ralph Corbett Smith, with US Army General Albert C. Wedemeyer, who served in Asia during World War II and whose papers are also held at Hoover. Read more here.
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