Will regulatory action protect consumer privacy or Facebook’s profits? (Babette Boliek, AEI)

Privacy and data collection issues have dominated recent headlines, with Facebook and CEO Mark Zuckerberg being taken to task for permitting the use of consumer data by third parties — apparently as a function of Facebook’s own rather liberal data collection policies. Also in the news is the impending implementation of the European Union’s General Data Protection Regulation (GDPR), which aims to increase privacy protections for consumers (for example, consumers will be asked to “opt-in” for cookies) and imposes higher compliance costs for tech and other data-gathering firms. The echoes of that legislation are already being heard in the United States, as notices are being sent to consumers by any US company that believes it may have citizens of the EU as part of its clientele.

Will regulatory action protect consumer privacy or Facebook’s profits?

In Brief: Rise of the Revisionists: Russia, China, and Iran (Gary J. Schmitt, AEI)

In a recently released book, Rise of the Revisionists: Russia, China, and Iran, Gary Schmitt, codirector of the Marilyn Ware Center for Security Studies at the American Enterprise Institute, with AEI scholars Frederick W. Kagan and Dan Blumenthal, Foundation for the Defense of Democracies Senior Fellow Reuel Marc Gerecht, and Walter Russel Mead, distinguished fellow at the Hudson Institute, analyzes the threats posed by Russia, China, and Iran as they challenge the liberal international order. In the volume’s five chapters, the authors examine the strategic objectives of the three states and, in turn, America’s potential response.

In Brief: Rise of the Revisionists: Russia, China, and Iran

The public talks trade (Karlyn Bowman, Eleanor O’Neil, AEI)

It’s a crucial time for trade talks. The Trump administration wants to finish negotiations on the North American Free Trade Agreement soon, and Congress will need to approve whatever results from those discussions. President Donald Trump has repeatedly suggested he will pull out of the negotiations if he doesn’t get the deal he wants, but it is unclear whether he has that authority. Additionally, the White House suspended tariffs on European steel and aluminum exports until May 1 and negotiations about them are underway. And, next week, four senior administration officials will visit China to discuss the tariffs and other matters. Where does the American public stand on these issues?

The public talks trade

On the Accuracy of Alternative Approaches for Calibrating Bank Stress Test Models (Paul H. Kupiec, AEI)

Multi-year forecasts of bank performance under stressful economic conditions determine large institution regulatory capital requirements and yet the accuracy of these forecasts is undocumented. I compare the accuracies of alternative stress test model forecasts using the financial crisis as the stress scenario. Models include specifications that mimic the Federal Reserve CLASS model and alternatives that use Lasso, the AIC and an abridged set of explanatory variables. A simple single-equation Lasso model has, by far, the best forecast accuracy. Large differences in model forecast accuracy are undetectable from estimation sample statistics highlighting the need for new stress test model evaluation methods.

On the Accuracy of Alternative Approaches for Calibrating Bank Stress Test Models