Today, Condoleezza Rice offers her view on what the immediate US priority should be in its war with Iran. A new study by Hoover scholars finds the proposed California billionaire tax will likely leave the state worse off financially in the long run. And Mickey D. Levy says concerns in the credit markets about a rising risk of major defaults are not substantiated by fact.
Iran
Hoover Institution Director Condoleezza Rice joined Special Report with Bret Baier on Fox News on March 4 to discuss the aims of the US-Israeli war with Iran, reminding viewers that Iran has threatened US troops and interests in the region frequently since the 1979 revolution. “I think the goal of the administration is to render Iran incapable of using its military forces outside of its borders, or threatening its neighbors, our allies, or threatening our bases abroad, because we are seeing what they are capable of doing,” Rice said. She added that it was a “strategic blunder” on Iran’s part to fire missiles and drones at the Gulf Cooperation Council states around the Persian Gulf. Baier and Rice also discuss the possibility of helping armed Kurdish minority groups fight Iranian security forces inside the country. Watch their discussion here.
California
California’s proposed one-time wealth tax on billionaires would leave the state worse off by an estimated $25 billion once lost income tax revenue is considered, according to new research by Hoover Institution scholars. The study, by Senior Fellow Joshua D. Rauh, Research Fellow Benjamin Jaros, Research Associate Gregory Kearney, and research analysts John Doran and Matheus Cosso, finds that the one-time levy would collect approximately $40 billion in wealth tax revenue, less than half of the roughly $100 billion projected by proponents. This is because many billionaires have already departed California, even before the initiative has qualified for the ballot. Furthermore, because the departures by billionaires eliminate their future state income tax contributions, the researchers estimate that the measure would produce a negative net present value under most scenarios. Read more here.
The Economy
At least one prominent executive has expressed concern that banks are “doing some dumb things” that echo the fateful runup to the Great Financial Crisis (2008–9). In Defining Ideas, Visiting Fellow Mickey D. Levy takes a close look at financial data and concludes, to the contrary, that credit conditions are not worrisome. Consumer and business debt are in fairly good shape, commercial banks well capitalized, he writes, and banking practices are far different from what they were 20 years ago. In particular, the mortgage debt bubble that began to pop in 2006 relied on a dysfunctional degree of connectedness and contagion, he reminds readers. There are concerns about the vulnerability of today’s private lending, he says, and these may call for caution. But as for the debt being used to build AI infrastructure, Levy does not think any failures among the innovators will be pervasive or “unhinge society and commercial banking.” Read more here.
Freedom Frequency
A new essay at Freedom Frequency argues that the vast amounts of regulation produced in the United States make it extraordinarily difficult to know which regulations work, which don’t, and whom various rules affect. In this piece, Research Fellow Patrick McLaughlin explains a high-tech tool he has developed that treats these oceans of regulation as data, making the information searchable and measurable. Once regulation is analyzed, he writes, policymakers have the ability to see whether it’s being applied inefficiently or unfairly, and to better understand its real-world impact. McLaughlin emphasizes that this dataset goes beyond what any team could read, summarize, or cross-reference, and this makes it a powerful new tool for reform. “When regulation is measurable, reforms can be audited,” he writes. “Targets can be set. Tradeoffs can be debated in the open.” Read more here.
Revitalizing History
The Hoover Institution Library & Archives has acquired the papers of Shuja Nawaz, an advisor to civil and military leaders and legislators in South Asia, the United States, and Europe, who has held roles at the International Monetary Fund, the International Atomic Energy Agency, and the World Health Organization. The collection includes rare Pakistan Army documents, correspondence between Middle Eastern and Pakistani leaders during the Cold War, original research on US-Pakistan relations, restricted materials on the Kashmir and 1971 Indo-Pakistani wars, and Nawaz's investigation into the suspicious death of Pakistan's army chief in 1993. Read more here.
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