Friday News Roundup — March 8, 2019: Generational Equity; Facebook’s New Vision; The 2020 Invisible Primary; and Stories You May Have Missed

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Greetings from Washington, D.C., where March means that spring training baseball is starting and we are all about to go mad with college basketball. It is hard to believe that, 11 months before the Iowa Caucuses, there is already so much going on in the race to replace President Trump, but the Democratic Party’s invisible primary is already in full swing. Campaigns are hiring staff and testing messages, and seven candidates announced their intentions to run (or not) this week alone. In this week’s roundup, Dan argues that the socialism vs. capitalism dichotomy in our politics obscures more than it illuminates; Michael looks at announced changes to Facebook’s business model; Chris shares our analytical rubric for the emerging Democratic 2020 primary; and, as always, we wrap with stories you may have missed.

The Millennial Political Economy

Dan Mahaffee

This might not be so relevant anymore

Even as scandals have ensnared his administration, President Trump has seized on the leftward lurch of the Democratic base as a political theme — repeatedly painting the 2020 field as socialist. At the same time, we’ve seen more and more ink spilled on the rapid growth of groups like the Democratic Socialists of America (DSA) and the growing influence of socialist activism, particularly in urban politics. That Bernie Sanders enjoys top-tier status amongst the Democratic candidates is also suggestive of this overall trend.

Much of the success of socialist policies, and several of the more firebrand political leaders on the left, has been the strong support from millennial voters and activists. Rep. Alexandria Ocasio-Cortez (D-New York) has been the standard bearer, but it is a trend in young Americans’ political viewpoints that cannot be underestimated.

Harkening back to the threat of Soviet communism, however, is not a sufficient the answer to this political and economic challenge, even if it is an effective 2020 bumper sticker. The broader challenge is understanding why so many young Americans feel disconnected from the capitalist system. Similar to the right wing populism that drove the success of President Trump with 2016 voters, there are parts of the left-wing economic agenda that are resonating with all voters — and millennials in particular.

Millennials have largely failed to benefit from the recent successes of the economy. Growth in real estate prices and stock valuations have not resonated with a generation that largely rents and does not hold stock investments. Government interventions in the economy have served to shore up existing industries or lower the cost of lending to businesses. At worst, they see establishment politics on both sides of the aisle pushing government to support incumbents — to “socialize risk and privatize profit.” As government has sought to stimulate the economy, its continued to run up the national debt — a reckoning future generations will face — and done nothing to address future entitlement programs.

Take housing, for example, the largest asset any American will likely own. It is “government interventionism” to promote home building and expand the housing supply, but perfectly fine to ensure that seniors can unlock the value of their homes through government-backed reverse mortgages and baby boomers can protect their house values through NIMBYism and zoning controls.

Government can support a range of incumbent institutions but investment in the future becomes “too expensive.” When austerity at the Federal level is passed down to states, the cuts inevitably come for public universities and infrastructure investment, yet programs like Medicare and farm subsidies are sacrosanct on both sides of the aisle.

Generally, as highlighted in research by the St. Louis Fed, the millennial outlook for their financial future is as follows: three out of five don’t have any stock investments; they are on track to have less wealth than previous generations; and they doubt that they’re likely to see any social security in retirement. Despite all of those headwinds, millennials are optimistic about their financial future. What drives their economic angst is a sense that the paradigms of work, savings, and financial success have changed — yet the political economy is weighed to serve those holding asset portfolios rather than those trying to build them.

What distinguishes millennials’ perceptions of socialism from that of previous generations is that they identify socialism less with failed Communist economies and more with the welfare states of Europe — though they don’t have first-hand experience with the high tax rates and burdensome regulation. What is common across the generational divide is, shockingly, that all generations support the government programs that benefit them.

Reducing the debate to socialism-versus-capitalism may please vociferous segments of each party’s base, but it doesn’t begin to address the conversation that America needs to be having: how do we fix capitalism so that more Americans feel that they are part of the system? I am a millennial — though I am part of the older cohort that remembers inconveniences like having to disconnect from the internet so another family member could use the phone — but I also believe that what has made the American economy a beacon to others around the world is that we can correct the excesses of laissez-faire capitalism without swinging towards European statism, or worse.

If you believe that the free-market, capitalist system is worth fighting for, then you have to understand that reform is needed to ensure that the capitalist system is an open doorway, rather than a drawbridge pulled up. An entire generation that is detached from the system will likely continue to seek more radical solutions.

Facebook 👍s New Privacy Tools

Michael Stecher

You Don’t Get to 500 Million Friends without Making a Few Enemies

“People want to go on the internet and check out their friends, so why not build a website that offers that? Friends, pictures, profiles, whatever you can visit, browse around, maybe it’s someone you just met at a party, but I’m not talking about a dating site, I’m talking about taking the entire social experience of college and putting it online.”

That is how Mark Zuckerberg once described the entire vision of Facebook — well, technically it is how “Mark Zuckerberg,” the character in the Aaron Sorkin / David Fincher movie The Social Network described Facebook — so it was very strange to read the real Mark Zuckerberg’s blog post about his company’s new strategic vision. While acknowledging that there remains an important role for public social networks in the vein of Facebook as originally envisioned or LinkedIn, the future of the online ecosystem is “private messaging, ephemeral stories, and small groups.” This impending change to Facebook’s business model is certainly interesting in its own right, but it also reflects growing uncertainty in the West’s technosphere and a developing failure in American institution building in the post-post-Cold War world.

Facebook’s business model since its founding has been to collect large amounts of data on individual users and package that information for advertisers, much like many other technology firms like Twitter or Google. If you search for recipes online, you may get targeted ads for Williams Sonoma cookware. If you are a member of a group of Obama administration alumni, you may start seeing ads from Planned Parenthood (or whatever examples apply to you instead of me). Unfortunately, not all of the uses of the data that Facebook has collected are so banal. 2018 will be remembered as Facebook’s annus horribilis because of revelations of how data collected through the platform had been used to for political targeting and distribution of false or misleading political news. Shortly thereafter, the European Union’s General Data Protection Regulation (GDPR) went into effect, which gave privacy advocates and national regulators news tools to enforce European visions of data protection on major internet companies that grew up in the more permissive American ecosystem.

Facebook faced 10 GDPR-related inquiries just from the national data privacy regulator of Ireland. Last month, the German anti-trust regulator ordered Facebook to stop merging data from its different channels (Facebook, Instagram, WhatsApp, etc) without the voluntary consent of users. Things are clearly getting more challenging for companies that want to sell information about you to advertisers and it is in this environment that Facebook’s strategic change should be understood. Advertising currently makes up 98% of the company’s revenues, a figure that will need to shift substantially if it is going to successfully adapt to these new conditions. It appears that Facebook’s lodestar in this transformation is WeChat, the social network-cum-internet ecosystem developed that dominates the Chinese market, but with privacy tools like end-to-end encryption that are obviously unavailable in the People’s Republic regulated dataspace.

This move towards peer-to-peer sharing and encrypted data is not without it potential pitfalls. Russian bots might not be able to blast misinformation into the ether without Facebook’s newsfeed, users are still able to share whatever dubious “facts” they encounter with their friends and connections. In Brazil’s most recent presidential election, a study of 100,000 images shared on WhatsApp, the peer-to-peer encrypted messaging app owned by Facebook, found that more than half were false or misleading. In India in 2017, rumors of bandits shared over WhatsApp created a murderous lynch mob. Particularly in the Anglosphere, national security equities worry that communications that cannot be tapped or traced, even with a court order, could be abused by criminals and terrorists.

This is a space where the United States government needs to play a constructive role. As in other regulated industries, major technology companies recognize that their businesses have matured and have the ability to affect, for better or worse, many more people. There are important perspectives to be balanced to ensure that the free and global internet that developed under American leadership survives while people have greater control over their data and the companies that transact in that data bear more responsibility for its protection. Because GDPR was the first major regulatory framework to be launched, it has shaped the conversation in a way that focuses on national sovereignty and will make compliance burdensome, potentially preventing new startups from disrupting legacy businesses. California has already passed its own framework that draws from GDPR, but which could be even more threatening to the digital ecosystem. Without concerted federal action, the internet will drift towards a system that is less interconnected and less dynamic. Only the U.S. government has the convening authority to arrest this slide and ensure an effective balance between privacy, security, and connectivity.

The Ballad of Joe and Bernie

Chris Condon

The Approximate Size of the Democratic Primary Field

The Long and Winding Road has brought us to a fish or cut bait moment in the Democratic invisible primary, with five candidates (Bloomberg, Brown, Clinton, Holder, and Merkley) definitively ruling out a presidential campaign and two more (Hickenlooper and Inslee) throwing their hats in the ring. Since former Vice President Joe Biden is nearing a decision regarding his political future and newcomers such as Beto O’Rourke have drawn considerable attention, we on the policy team would like to share with you how we are thinking about the growing field and, because we are in a funny mood today, we are going to use a lot of Beatles references to do it. Broadly speaking, we perceive the candidates (including high-profile names that have yet to officially declare) on two dimensions: name recognition and propensity for compromise. We have organized the field into three buckets informed by polling results of their name recognition, which we are calling “Deep Cuts” (think Blue Jay Way), “B-Sides” (Helter Skelter, for instance), and “The Hits” (Let It Be, of course). For penchant for compromise, we put them on a range from Revolutionaries to Come Togetherers.

First, there are candidates generally unfamiliar to the public that have little experience related to the presidency (this is the “Deep Cuts” bucket). These candidates have largely tried to stake out a unique position in the field, whether it is bipartisanship, youthfulness, or some other characteristic. John Delaney, a former congressman from Maryland, has been running a campaign for the Democratic nomination since July 28, 2017 and has styled himself as a centrist, pragmatic dealmaker. Pete Buttigieg is a Navy veteran and the mayor of South Bend, Indiana, who has described himself as the voice of the millennial generation and a bridge to the rust belt and has used his record of rejuvenating a depressed midwestern city as a selling point. Representative Tulsi Gabbard of Hawaii has struggled with charges of friendliness toward Syrian dictator Bashar al-Assad, but is known for her opposition to intervention abroad. Andrew Yang and Marianne Williamson are both private citizens with no political experience, and have formed their campaigns around niche positions on universal basic income and slavery reparations, respectively. Some might consider them the Lucy in the Sky with Diamonds candidates.

The next bucket, which we call the “B-Sides” bucket, are candidates that are not necessarily well-known to the public, but have held reasonably high political office and can make a case based on experience. Julian Castro, the former Secretary of Housing and Urban Development, is probably closest to the borderline of the Deep Cuts, but his stint in President Obama’s cabinet could make his message of youth and diversity more palatable to Democratic elites. Former Colorado Governor and 2018 CSPC Publius Award Honoree John Hickenlooper jumped into the fray recently with a message of experience and compromise, and an executive record to bolster his case. Washington Governor Jay Inslee has similar credentials, except as a more committed progressive whose candidacy revolves around combating climate change. Senator Amy Klobuchar (D-MN) has sought to carve out a position as both a moderate bridge to the midwest and a voice for women. Senator Kirsten Gillibrand (D-NY) is also a contender for the voice of America’s women, but styles herself as an unabashed progressive rather than a moderate presence.

Finally, we come to the final bucket, or “The Hits,” the smallest group so far. The first among them to declare was Senator Kamala Harris (D-CA), whose record as a prosecutor and fiery questioning of now-Justice Brett Kavanaugh may make her a formidable force in primary debates. As a woman of mixed ethnicity, she will also likely be able to both compete for the female vote and energize racial minorities. Senator Cory Booker (D-NJ) seeks to combine a fairly liberal record with a message of unity to oppose President Trump’s inflammatory rhetoric, which is reminiscent of President Obama’s message in 2008. Senator Elizabeth Warren (D-MA) has been a notable economically progressive voice in the Democratic Party for years, although she calls herself a capitalist and stops short of the recent trend toward democratic socialism in the Democratic Party. Finally, we see the return of Senator Bernie Sanders (D?-VT). He will likely seek to mobilize his progressive base of supporters from 2016, although he now faces competition from a number of other leftists and is no longer the default non-Hillary option.

With the possibility of such an expansive field of candidates, every decision to not mount a campaign relieves a bit of pressure within the contest for the Democratic nomination. This week, Michael Bloomberg decided that a centrist former mayor—and billionaire—is unlikely to appeal to the Democratic base and took his name out of the running. Jeff Merkley weighed a steep uphill battle against his stable career in the U.S. Senate, and decided that the latter was a more apt avenue for national change. In the coming weeks, especially if Vice President Biden jumps into the race, it may be appropriate for some minor candidates to reduce the noise by serving their country in a different way.

Stories You May Have Missed

Breakthrough?: Second Patient Appears To Be Cured Of HIV

Alec Mancini

In what could represent a major breakthrough in the global fight against HIV/AIDS, a patient in London appears to have been cured of the disease. Known as the “London Patient,” this man, who has chosen to remain anonymous, is the second individual who appears to have been cured of HIV through a cancer treatment. Almost 12 years ago to the day, another man, known as the “Berlin Patient”, became the first person that researchers suspected to have been cured of AIDS. This Tuesday, the findings were presented at the Conference on Retroviruses and Opportunistic Infections in Seattle. Researchers said that what these cases mean is that, while difficult, a cure for one of the most horrific diseases in modern history is now imaginable.

Top US General in Europe Calls for Stronger Military Presence

Zachary Pendolino

Before the Senate Armed Services Committee on Tuesday, General Curtis Scaparrotti, head of U.S. European Command and NATO Supreme Allied Commander-Europe, called for an increased US military presence. Citing “Russia’s modernizing and increasingly aggressive force,” General Scaparrotti specifically called for two more destroyers, more ground based rotational forces, and more assets in intelligence, surveillance, reconnaissance and cyber capabilities in order to maintain the US’s military advantage in Europe. He revealed that he is not comfortable with the deterrent posture of NATO forces in Europe at the moment and believes that more vigilance is required in a response to Russian action.

Trump Now Agrees “100%” with Keeping Troops in Syria

When President Trump announced on December 19th that he would withdraw all American forces from Syria, very few in Washington responded positively. In fact, on January 31st, the Senate officially rebuked the President in a rare act of unity, with 68 senators voting for the measure slapping the Commander-in-Chief on the wrist. Although some libertarians and populists in Washington rejoiced, Trump undoubtedly felt the pressure of his opposition, which undoubtedly included hawks such as John Bolton (Trump’s National Security Advisor). With the whole of the D.C. establishment against him, Trump buckled in rare fashion, now stating to a group of concerned Republican senators “I agree 100%” with keeping a contingent of troops in the war torn Middle Eastern nation.

NSA Seemingly Preps to End Infamous Surveillance Program

This week, a senior Republican congressional aide reported that the National Security Agency has ended its bulk collection of Americans’ telephone metadata. This program has been the subject of much controversy in recent years, culminating in the fugitive status of Edward Snowden for leaking the existence of the program in 2013. Although the Patriot Act, the original legal framework for the program, was repackaged as the USA Freedom Act in 2015, it essentially reauthorized the same program. Since the Trump administration hasn’t used the system in months, the aide argued, they may not seek its renewal by Congress when the program’s legal authority expires at the end of the year.

Short Ties, Long Chinos: Goldman Sachs Goes Business Casual

“Dress for the job you want” is generally good advice. A generation ago, this prompted many top performing college students to adopt a style that could best be described as “Gordon Gekko Chic.” In recent years, however, as technology firms have replaced investment banks as the most desired employers for recent graduates and the banks themselves have become more technology-focused, the traditional suit and tie has gone the way of quoting stock prices in 1/8th of a dollar. This week, Goldman Sachs sent a message to all employees that the firm was adopting a flexible dress code, prompting one Wall Street Journal reporter to quote at length from a story told by Goldman legend John Whitehead. Mr. Whitehead wore a seersucker suit one day in his first summer working there and was told by Walter Sachs, the son of the firm’s co-founder, “I would recommend that you go home right now and change out of your pajamas.”

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Center for the Study of the Presidency & Congress

CSPC is a 501(c)3, non-partisan organization that seeks to apply lessons of history and leadership to today's challenges