Today, the GoodFellows crew discusses crumbling ties between the US and India, and whether the Modi government’s embrace of China is of real concern. Šumit Ganguly writes about why and how India should work to rebuild its relationship with Washington. And Michael S. Bernstam and Steven R. Rosefielde write about how recent geopolitical events have likely condemned Russia’s oil and gas sector to near-permanent global irrelevance.
Determining America’s Role in the World
With global autocrats gathering in China—adding Indian Prime Minister Narendra Modi to their ranks after a spat over Russian oil purchases with the US—Senior Fellows H.R. McMaster, Niall Ferguson, and John H. Cochrane tell Distinguished Policy Fellow Bill Whalen whether New Delhi’s pivot to Beijing is real or a feint. Next, the trio discusses developments in Russia’s invasion of Ukraine, Trump’s extensive use of executive power at home (and the domestic response), and the administration’s move to take a 10% stake in semiconductor manufacturer Intel. Finally, they discuss changes afoot at the Federal Reserve as a debate continues over the appropriate degree of independence it should maintain from the White House. Watch the episode here.
Writing in The Indian Express, Senior Fellow Šumit Ganguly argues the US and India must somehow mend fences after the recent deterioration in ties, with the US slapping 50% tariffs on Indian exports for reasons that differ depending on whom one asks. Ganguly says the Indian pivot to China in response to these events will be short-lived and that policymakers in New Delhi will soon realize their differences with Beijing “cannot be wished away.” With the trade and security relationship between India and the US growing steadily until now, Ganguly says the Indians should refrain from bellicosity, ignore the “boorish rhetoric” of White House trade advisor Peter Navarro, and work to turn things around. He reminds readers that India-US relations have sunk lower than this before, during the administrations of Lyndon B. Johnson and Richard Nixon, when items such as food aid and ties with Pakistan roiled Indian leaders. Read more here.
Writing in Barron’s, Research Fellow Michael S. Bernstam and Steven R. Rosefielde of University of North Carolina at Chapel Hill detail how market forces and policy decisions have doomed Russia’s once-burgeoning hydrocarbon industry to decline. By invading Ukraine in 2022, then cutting off natural gas supplies to Europe shortly thereafter in a bid to stop support to Kyiv, the authors write that Russia has likely permanently lost a chunk of natural gas market share in Europe. The impact of global sanctions after the invasion allowed Russia’s new gas and oil customers like China and India to negotiate hefty discounts on the crude they import. The authors point out this discount will cost Russia nearly $160 billion in revenue between 2025 and 2026. And higher output from OPEC and the United States likely means that whatever happens in Ukraine, Russian oil will fall out of favor permanently in many parts of the world. Read more here.
The Economy
In a new article for the International Monetary Fund’s Finance & Development magazine, Senior Fellow Darrell Duffie and coauthors explore how stablecoin-based payment systems could incorporate safety measures to prevent their use in money laundering and other illicit transactions. They write that new stablecoins must be designed with compliance mechanisms built in from the start. “Say Alice wants to pay Bob,” the authors suggest for a scenario. “Once she taps ‘send’ in her phone app, previous verification of their identities is confirmed, the transaction is reviewed by a decentralized algorithm for suspicious activity, and the operation is completed—all on a blockchain. Flagged transactions would automatically be reported to law enforcement. The identities of Alice and Bob, however, could be unmasked only with a warrant or through another legal process.” Read more here.
Healthcare
A new video from Hoover’s Tennenbaum Program for Fact-Based Policy breaks down the size of the Medicaid program and who funds it. Medicaid’s $900 billion budget doesn’t all come from the federal government. The program is collaboratively funded between the federal government and the individual states, with lower-income states receiving more federal support. In 2023, the federal share was 69 percent, while states covered 31 percent. The federal-state partnership ensures that federal taxes subsidize state programs, with each state tailoring Medicaid to its population’s needs. Watch the video here.
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