Today, H.R. McMaster speaks with a former president of Peru about leadership lessons from his government service and subsequent study of philosopher Sir Francis Bacon; David Henderson connects the concept of consumer surplus to the conveniences of modern life; and Bill Whalen asks the price to electoral competition of a California ballot measure that would simply, yet powerfully, change how the state conducts recall elections.
International Affairs
For Today’s Battlegrounds, Senior Fellow H.R. McMaster speaks with Francisco Sagasti, former president of Peru, about the lessons of Sagasti’s presidency, political and economic trends in Latin America, and his new book, Knowledge Is Power, which explores the life and legacy of Sir Francis Bacon. Sagasti discusses Peru’s economic prospects, the rise of organized crime and illegal mining, and the erosion of public confidence in democratic institutions. He also considers the evolving relationship among the United States, China, and Latin America; the importance of regional cooperation and sovereignty; and his vision for a more pragmatic and democratic future for Peru and the region. Drawing on themes from his book, Sagasti emphasizes the importance of knowledge, integrity, trust, and a commitment to the common good in confronting the challenges facing democracies. Watch or listen here.
Economics
“Is the Gross Domestic Product (GDP) of a country a good measure of economic wellbeing?” At Defining Ideas, Research Fellow David R. Henderson makes the case that “no, it’s not.” Among other reasons, GDP “completely omits what economists call consumer surplus,” or the difference between the most someone would pay for an item and what they actually pay. This difference, illustrated by multiple examples in the piece, highlights the amount a consumer gains from a given exchange. “What I like most about consumer surplus is not all the technical details and measurements, however important they are,” Henderson concludes. “What I love is that consumer surplus is a way of making us realize just how lucky and fortunate we are as Americans.” Read more here.
California Decides
“At first glance, Proposition 5 seems innocent enough, or so its official summary assures us,” Distinguished Policy Fellow Bill Whalen writes at California on Your Mind. He discusses how Prop 5 would change how recall elections work in the state, so replacements for recalled officials would no longer be selected in the recall vote but rather by a later special election or appointment. Whalen notes how this seemingly simple change would effectively close the “back door” to the California governorship once used by Arnold Schwarzenegger to replace ousted Governor Gray Davis. Whalen argues that the passage of Prop 5 would prove “just one more way in which a party that controls every statewide office, as well as supermajorities in both legislative chambers, maintains its dominance.” Read more here.
Proposition 1 asks California voters for permission to borrow $11.25 billion by selling bonds, with the money directed at affordable housing and veteran homeownership. It is a general obligation bond measure, which is the standard way the state borrows for long-lived investments and pays the money back over time out of the annual budget—requiring higher tax revenues or lower spending on other items. As this explainer notes, a bond is first and last a borrowing and subsequent repayment decision; given current borrowing costs, a large share of every repayment dollar would buy interest rather than housing. With this measure, voters will consider the usefulness of government-allocated “affordable” housing. Voters will also evaluate whether creating more government-subsidized and politically allocated housing, instead of easing barriers to home construction, will alleviate the state’s housing affordability crisis. Read more here.
Energy Policy
This video based on the research of Distinguished Visiting Fellow John Deutch explains how hydraulic fracturing and Liquefied Natural Gas exports have made the United States the world’s largest supplier of natural gas. Meanwhile, Europe, Japan, Taiwan, and India still rely on foreign fuel and face supply and grid risks. Washington can turn American assets into strategic advantages for itself and its partners, Deutch finds. Deeper gas trade, lower nuclear costs, and firmer cooperation can advance US interests at a moment when allies find themselves vulnerable. Watch or listen here.
Freedom Frequency
The rhetoric about Africa’s growing global importance is often belied by a lack of US investment, engagement, and policy attention, former National Security Council official Judd Devermont argues at Freedom Frequency. Building a new global economic and security commons will require both a US commitment to stronger partnerships with Africans and an African vision for a durable international order, he writes. For the United States in particular, Devermont argues, this will mean confronting critical questions about integrating more African voices into global leadership, rethinking its approach to critical minerals, and balancing geopolitical competition with other priorities. This essay also calls for addressing security challenges and broadening American partnerships beyond the continent’s traditional anchor states to include smaller regional powers. Read more here.
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