Donald Trump Is Helping Iran’s Radicals

The Economist: “The ritual chants of ‘Death to America’ had grown fainter in recent years. The feverish crowds had thinned. Some demonstrators seemed to wave Uncle Sam banners less to jeer America than to cheer it. Yet thanks to Donald Trump this year’s annual rally to commemorate Islamic Revolution Day on February 10th in Tehran looks set to be one of Iran’s biggest.”

“Hardliners who had warned that America was targeting Iran’s people, not just its regime, say they are vindicated, and that their government will not trust America again. ‘Thank you, Mr Trump, for showing the true face of America,’ mocked Ayatollah Ali Khamenei, the Supreme Leader, in an anniversary address. Even reformists, who had dismantled Iran’s nuclear programme and handed over enough fissile material to build ten nuclear bombs as part of the deal, feel betrayed. Javad Zarif, Iran’s foreign minister, who negotiated the deal with six world powers, has lost his smile. Iran has difficult days ahead, he growled. Even Muhammad Khatami, a former president who had tried to mend fences with the West, called on reformists to join hardliners in decrying America.”

Can Trump Harness the Private Sector to Stop Violent Extremism?

Eric Rosand and Alistair Millar: “Donald Trump campaigned on the promise that he would use his legendary business experience to solve the most pressing problems facing the United States and its interests abroad; stocking his cabinet with CEOs from corporate America has only raised expectations that he can deliver on this promise. As commander-in-chief, how will President Trump use his commercial know-how to tackle the problem of violent extremism? Will he—complemented by the wealthiest, most pro-business cabinet in U.S. history—do what his predecessors have failed to do and get the private sector to really step up?”

We Are Still Living With Eisenhower’s Biggest Mistake

Michael Totten: “Historians are tasked with delivering us from George Santayana’s curse, where those who cannot remember the past are condemned to repeat it, but historians can only save those who take the time to study the historical record, and even then it only works if the historical record is accurate.”

“Thank goodness, then, for Hudson Institute senior fellow Michael Doran’s valiant attempt to save us from ignorance and bad history in his bracing new book, Ike’s Gamble: America’s Rise to Dominance in the Middle East. He expertly walks us through the Suez Crisis of 1956 and its ghastly aftermath when Republican President Dwight ‘Ike’ Eisenhower learned the hard way that Israel, not Egypt or any other Arab state, should be the foundation of America’s security architecture in the Middle East.”

“Why does any of this matter today? Because two of Eisenhower’s wrongheaded ideas are as hard to kill as the Terminator—that the Arab world is a homogenous monolith and the related notion that an American alliance with Israel harms our relationships with Arabs everywhere. Neither of these things are true, and they never have been. America’s natural allies in the Middle East either tolerate our friendship with Israel or secretly hate Israel less than they let on in public, and Israel’s most vicious enemies will never side with the United States anyway.”

The Places in America Most Vulnerable to a Trade War

Washington Post: “The effect of a trade war on U.S. communities could be significant and widespread, according to research from the Brookings Institution’s Metropolitan Policy Program. Nearly 6 million U.S. jobs are directly tied to exports. Another 6 million are indirectly tied to trade — for example, the driver who transports a truck load of widgets to the port.”

“The Brookings data ranks the cities that are most dependent on exports and with the most export-related jobs. Small Midwestern cities that export auto parts and other manufactured goods appear high on the list, as do coastal cities that export chemicals and petroleum byproducts.”

Offshore Wind Moves Into Energy’s Mainstream 

New York Times: “…offshore wind, once a fringe investment, with limited scope and reliant on government subsidies, is moving into the mainstream.”

“Offshore wind has several advantages over land-based renewable energy, whether wind or solar. Turbines can be deployed at sea with fewer complaints than on land, where they are often condemned as eyesores. But the technology had been expensive and heavily dependent on government subsidies, leaving investors wary. That is now changing. Turbines today are bigger, produce much more electricity and are deployed on much larger sites than in the past. The result is more clean power and extra revenue.”

“The industry is not without challenges. Governments have been cutting financial support for clean power in a bid to balance their budgets, while President Trump’s administration seems likely, based on his promises during his election campaign, to forcefully support fossil fuels.”

Just 14 Stocks Have Created 20% of All Stock Market Gains Since 1924

Yahoo Finance: “In what truly is one of the most amazing statistics to ever come across our desks here at 24/7 Wall St., we recently saw a chart that showed that just 14 stocks have created 20% of all stock market gains in dollars since 1924. That is a phenomenal figure, considering the sheer number of companies that have come and gone in that time, and the overall wealth created in the stock market in the past 93 years.”

“In a remarkable and striking similarity, all the companies on the list are still incredibly relevant and are still outstanding investment ideas, depending on your risk tolerance.”

Two Tax Ideas That Can Revive the American Dream

Joshua Rosner: “One idea: Create a new, tax-free ‘housing personal savings account.’ Similar to a health savings account or the 529 plans that people use to save for college expenses, it would allow prospective home buyers or their immediate relatives to set aside money for a down payment on a first home, or for the upfront cost of a first-time rental.”

“A second idea: Grandfather existing mortgages and then phase out the mortgage-interest tax deduction and replace it with an ‘equity principal tax credit,’ which would allow people to deduct a portion from their tax bill of the amount of principal that they paid down each year.”

“Taken together, the two programs would significantly increase the number of first-time home buyers with larger down payments, reducing the risk of defaults and potentially lowering mortgage rates. By creating incentives to get out of debt quickly, they might also reduce demand for the 30-year fixed-rate mortgage, allowing the government to reduce its role in the market. No less important, they could enable more Americans to retire in prosperity, without having to rely on government safety-net programs to make ends meet.”

Even in a Digital World, Globalization Is Not Inevitable

Pankaj Ghemawat: “…a significant number of experts continue to believe in the virtually unlimited potential of globalization. Most of them focus on digitalization specifically and on communications technology, though some attention continues to be paid to transportation infrastructure (e.g., Parag Khanna’s Connectography).”

“I like to refer to such exaggerated perceptions of globalization as ‘globaloney,‘ a term coined in the 1940s by Clare Boothe Luce. Thomas Friedman’s famous proposal that, thanks to the internet, the ‘world is flat’ (advanced in a 2005 book bearing that title) articulates this idea in a way that is clear and simple — and wrong.”

“While I agree that digitalization can facilitate globalization in certain respects (e.g., by making it easier for small firms to export) here are eight reasons why I am unconvinced that digital technologies are sufficient, given everything else that is going on in the world, to drive globalization forward…”

Grading Obamacare: Successes, Failures and ‘Incompletes’

New York Times: “For those who believe the primary goal of the law should have been to bring health insurance to more Americans, the rational answer should be: Yes, Obamacare succeeded. More than 20 million Americans gained health coverage through the law.”

“For those who believe the primary goal of the law should have been to make health insurance affordable to all who want it, the rational answer is: No, Obamacare did not achieve uniform affordability. Health care in the United States remains the most expensive in the world, and coverage remains out of the financial reach of many Americans.”

“For those who believe the primary goal of the law was to make Americans healthier, the answer has to be: It is too soon to tell.”

“One thing is clear, though — the Affordable Care Act has shifted the nation’s baseline expectations for how health care should work. Its successes have pushed Republican politicians, like Mr. Trump, into making expansive promises to provide insurance to all Americans. Its failures have become focal points, too, leading to calls for lower insurance deductibles and for more choices in doctors and hospitals.”

Is the U.S. Economy Too Dynamic, or Not Dynamic Enough?

New York Times: “The economy has become too volatile and uncertain. Perhaps the dissatisfaction is driven by globalization, automation and the decline of employers’ implicit promises to offer workers jobs through thick and thin. These factors have made it harder for people to get good-paying jobs and to hold onto them for decades. High levels of inequality mean many of the benefits of growth don’t accrue for people at the middle and bottom of the pay scale.”

“Robert Johnson, the president of the Institute for New Economic Thinking, argues that the cumulative impact of rapid technological change and shifts in work can have downsides that economists should try to account for more rigorously… In short, one could summarize this set of complaints as the economy’s having become too dynamic for its own good.”

“But a different line of research offers an alternate theory.”

“A new report from the Economic Innovation Group, a research outfit funded largely by technology executives, suggests that the real problem isn’t too much dynamism but too little. The authors describe trends that have blocked the formation of new businesses and jobs and that are having a stultifying effect on the economy.”