State and Local Governments (U.S.)

Heidi Crebo-Rediker, senior fellow in the Greenberg Center for Geoeconomic Studies at CFR, discusses Ukraine’s mineral resources and their role in a negotiated settlement to end the war. Paige Gebhardt Cognetti, mayor of Scranton, Pennsylvania, discusses Scranton’s social and economic ties to Ukraine, implications of the Trump administration's approach to the Russia-Ukraine conflict, and ways state and local officials can broaden diplomatic relations with the region. TRANSCRIPT FASKIANOS: Thank you. Welcome to the Council on Foreign Relations State and Local Officials Webinar. I am Irina Faskianos, vice president of the National Program and Outreach here at CFR. CFR is an independent, nonpartisan membership organization, think tank, educator, and publisher focused on U.S. foreign policy. CFR is also the publisher of Foreign Affairs magazine. As always, CFR takes no institutional positions on matters of policy. And through our State and Local Officials initiative, CFR serves as a resource on international issues affecting the priorities and agendas of state and local governments by providing background and analysis on a wide range of policy topics. We appreciate your being with us today. We have more than 200 participants from forty-three U.S. states and two territories joining this discussion. And as a reminder, it’s on the record, and we will circulate the video and transcript after the fact and post it on our website at CFR.org. So we’re pleased to have Heidi Crebo-Rediker and Paige Gebhardt Cognetti with us today to speak on securing Ukraine, and the economic and social implications for communities and state and local governments here in the U.S. We’ve shared their bios with you, but—so I’ll give a few highlights. Heidi Crebo-Rediker is an adjunct senior fellow at CFR and a partner at International Capital Strategies. Prior to her time at CFR, she served as the U.S. Department of State’s first chief economist. She was also the chief of international finance and economics for the Senate Committee on Foreign Relations. And we circulated to you in advance a policy paper that she authored entitled The Art of a Good Deal: Ukraine’s Strategic Economic Opportunity for the United States. And this was part of a Council special initiative entitled Securing Ukraine’s Future, which provides informed analysis and practical policy recommendations on our website. So you can go there to find more resources. Paige Gebhardt Cognetti is the mayor of Scranton, Pennsylvania. She previously served as a director on the Scranton School Board. Mayor Cognetti also served as a senior advisor to the undersecretary for international affairs at the U.S. Treasury Department. And she is a Rodel fellow, class of 2023. So thank you both for being with us. Heidi, I thought we would start first with you to talk about the economic incentives that you see would help the United States bring an end to Russia’s war in Ukraine, and talk a little bit about the critical minerals play that is—debate that’s happening. CREBO-REDIKER: Sure. Well, first of all, thank you to Irina and to Paige for doing this today, and also to everybody for joining. As Irina mentioned, at the Council on Foreign Relations we actually recently launched this special initiative on Securing Ukraine’s Future because with President Trump and his new administration coming into office there was obviously and clearly telegraphed going to be a very different approach to how the United States would be providing support to Ukraine and its struggle post the 2022 Russian invasion in many different ways. And as a result of that, we thought, well, we need to put our heads together and put our heads into what the Trump administration is thinking and come up with a few good ideas for them on how they might approach a shared vision of security with Ukraine moving forward. And so I was sort of challenged to come up with what is the economic rationale? What is that deal that Ukraine can bring to the table? Because coming into the White House, it was pretty clear that President Trump and his team were talking about not only bringing a swift end to the war against Ukraine but that they are a drain on U.S. resources. And so how do you sell Ukraine as a compelling investment opportunity, rather than being a zero-sum drain on U.S. resources? And so the first place to go really is that it has a significant amount of critical mineral and rare earths resources. Some of them are, you know, already being—are already being extracted and processed. Some of them are in the ground to be developed at some future date. But that was clearly one area where—because we have this U.S.-China strategic competition, where China really dominates the extraction, refining, and processing of critical minerals and rare earths, we really do need to have some other sources. (Laughs.) You know, today, of all days, where we have the escalation in trade war against China, this is one of the asymmetric ways that China could hit us. So Ukraine has these. And so that was sort of, like, point number one of what they have to bring to the table. The second thing I flagged was that they have—they have really a tremendous defense industrial base. So they have the ability internally to generate their own—their own innovation in defense. And they actually—you know, many have made the argument that they are at the cutting edge, if not leading where the future of warfare is and will be, because they have such a sophisticated—a sophisticated drone, and electronic warfare, and the implementation of using artificial intelligence in weaponry. That is—that is an area where we actually in the United States could use their technology, their knowledge, their know-how. And they are also a very inexpensive producer of technology for—i.e., for Europe, moving forward, as they sort of move on the path to EU accession. And then the last thing was really, they—you know, the Ukrainians are extremely sophisticated cyber actors. And to have them on our side is actually—would be a great benefit. So those three things I put out there. The Ukrainians were very much on board with the critical minerals part. In fact, that was something that they had floated several months before, and Lindsey Graham had had flagged that they have trillions and trillions of resources in the ground. And if we were to work together with them in an agreement where we had shared economic security, that it could be—they could be our best business partners moving forward. So the Ukrainians themselves had put the critical minerals and rare earths on the table as a way to work with the United States and show that they were going to be a great partner, and that they could be part of our security solution to a larger—a larger challenge that is the geopolitical rivalry between the United States and China, which put the critical minerals, again, at the center of the national security agenda in the U.S. I’ll leave it there to start off because it’s sort of—that negotiation and where it’s gone has taken on a life of itself. And I’m happy to go into that. But I definitely want to hand the—hand the podium or the screen over to Paige to talk a little bit about how Scranton, in particular, has played a role in the military industrial production of weaponry for Ukraine, and also about its community which has been deeply tied to Ukraine for cultural and historic reasons. COGNETTI: Thank you, Heidi. Yes. I am Paige Cognetti, the mayor of Scranton. Scranton is in northeastern Pennsylvania. We are 120 miles east—or, west of New York City, and just a couple of hours from Philadelphia. So geopolitically here in the northeast of the United States. We have been a strategic location for manufacturing from, you know, the very beginning, back in the industrial revolution. And that continues today. I know when folks out there think of Scranton or some of the Rust Belt areas, I like to say legacy city, when we think about that we don’t think about manufacturing being live. We think about it being gone. And it’s just so not the case. We actually still have 11 percent of our jobs in northeastern Pennsylvania that are from manufacturing. And even though we aren’t an enormous hub of defense contracting, we have many, many defense contractors, some of them pretty critical. I mean, all very critical, but some of them that are much bigger and more influential than you realize when you skim the surface of the DOD budgets and contracts. So northeastern Pennsylvania is very much part of the growth of DOD reshoring some of the manufacturing. And we’ve enjoyed that in Scranton itself. So we have a munitions plant that makes shells. It’s been an Army installation since 1953. It’s run by General Dynamics and employees—about three years ago it was 300 folks that are part of the Aerospace Workers and Machinists Union. Now we’re, I think, almost up to about 400, because DOD put in about a quarter of a billion dollars into that facility in the last eighteen months or so. So it’s right in the heart of our downtown. It also—it’s not out in the rural area. It’s not, you know, out in the suburbs. It is right downtown. It’s very famous in our city and our region. So many generations of people have worked there. And a point of pride for us in these last three long and terrible years since Russia invaded Ukraine is that those munitions that we are making in Scranton, those generational families are making, they’re going to Ukraine. The shells get shipped to Iowa. They’re filled in Iowa, and then shipped either to U.S. installations or to our allies abroad. So we’ve had a lot of folks come through from different branches of the military, different politicians, and especially the media over the last few years to see what it’s like to help the Ukrainians in a real way, right in a place like Scranton. And it’s not just the munitions piece. We actually have a fairly significant diaspora of Ukrainian Americans. We have multiple churches that are Ukrainian churches. Especially we have Father Myron, who has a brother that is still in Ukraine. He’s made trips himself. They’ve had a big effort from the beginning a few years ago fundraising, making pierogi, and taking the proceeds from selling—you know, buying things to send to Poland and get over the border. It’s been a real community effort. Kids from our high school—there’s Ukrainian families that, you know, have moved from Ukraine in this war period, and their kids are going to high school in West Scranton. So we have, you know, fundraisers and all of that to support our brothers and sisters in Ukraine. So it’s been a—it’s been a strange bright spot and an absolute point of pride in Scranton. On the flip side then, it makes it even more difficult to see the American policy toward Ukraine seem to change. That’s been difficult for the Ukrainian families. We have Ukrainian soldiers who have been wounded in the war that are now living in Scranton and convalescing, and the churches and the families they are taking care of them. It’s been tough for—tough for morale to see that policy seem to shift. And there is a tremendous amount of anxiety about that. And that’s in addition to just general anxiety, I would say, with the uncertainty of what U.S. military policy is, what our strategy is abroad. A lot of folks, our military families, are increasingly anxious about what that means for their sons and daughters abroad. And when it comes to Ukraine, there’s a lot of support for Ukraine that’s going to stay steadfast. We’re supporting the installation, of course. We want to make sure that that continues to grow. But it’s been a—it’s been a tough few months. And the real—I can’t even imagine still that I got to do this. I got to greet President Zelensky in Scranton in September of last year. It was a visit. He was there in New York for UNGA, so he came over. And he came to the plant. He stood on the floor of the plant and greeted and thanked those 400 workers himself. It was an incredibly powerful moment. He could not have been more thankful to them. He shook their hands. He chatted with them. It was just so personal and so real. And then that visit since has been politicized quite a bit, which has been unfortunate. So we continue to support all of the efforts here in Scranton. We want to want—we don’t want them to be necessary, but we certainly are proud of what we’ve done to date. And we’ll continue to support Ukraine as best we can from Scranton, Pennsylvania. FASKIANOS: Fantastic. We can go to questions from the group. (Gives queuing instructions.) We’d love to hear from you. You can talk about what’s happening in your community as well. And I have other questions as well too, so—but please, do not be shy. We want to hear from all of you. OK, so as we wait for questions, I will start. Heidi, can you talk about how the war has impacted local economies in sectors like food and agriculture, and what you’re seeing on that front? CREBO-REDIKER: So, I mean, Ukraine is the—it’s known as the breadbasket of Europe, and has certainly—you know, I think one of the early victories—just to connect the agriculture with some of the innovation on the ground in warfare—some of the—some of the early naval drones that Ukraine was able to concoct out of, like, speed boats, and jet skis, and things like that, managed to push off the Black Sea Fleet. Which is not insignificant. This is sort of the Russian Black Sea Fleet that was based in Crimea and Sevastopol, to be able to clear the Black Sea for grain exports. So agriculture has held up in terms of the ability to produce and to export. But again, it’s a challenge. You have a lot of the—a lot of the—a lot of the places where you would have—where, you know, you have tractors that are plowing for planting and for harvesting are also areas that are—that are heavily mined. And so it’s not—it’s certainly not easy to create a heavily agricultural dependent economy during a time of warfare. But they seem to have actually managed to do quite a substantially good job with that. I would say that the—you know, even under the tremendous pressure of war, the Ukrainians have managed to keep their growth resilient. Over the past three years, their GDP is estimated by the IMF to be—to have been about 3 ½ percent for 2024. Probably going to moderate this year because they have had labor constraints, and also the Russians have really decimated their energy infrastructure. And even when President Putin has said that they would not attack Ukraine’s energy infrastructure, they, of course, have. (Laughs.) And so that continues to be a real challenge. So labor is a challenge. You have displacement of a significant number of millions of people, both internally in Ukraine and then throughout Europe, primarily. And as a result you have—you know, you have some pressures on the labor market. The IMF has actually stepped in with a substantial program. And they continue to provide, even and under extraordinary uncertainty, a program of 15 ½ billion (dollars) of an extended fund facility, which is—which basically comes up for review. They review how the Ukrainians have performed under it. And as of the end of February, they released the next tranche because the economy has actually been performing. The Ukrainians have been performing. And they’ve met all of their benchmarks, even under exceptionally uncertain circumstances of this war. FASKIANOS: Thank you. And, Paige, in terms of your experience in Scranton, what do you think can or should be done at the local level to strengthen support for Ukraine in other parts of the country? And especially at a time when President Trump has signaled that he wants the war to end and to move on. So what do you think would work to rally support? COGNETTI: I think not shying away from the topic, right? So we have the Ukrainian flag flying at city hall pretty frequently in Scranton. We raised it on the anniversary of the invasion just last month. We have a lot of folks that wear Ukrainian pins or T-shirts or hats around. And you see them actually more now than ever, I would say. You see them with dads on the soccer field and people with stickers on their cars. And I realize that the diaspora here is larger than it probably is in a lot of places, and having the munitions plant right downtown keeps it on our minds as so many folks in Scranton are there doing that work every day. But it really is a rallying cry for us, and it makes us feel proud to be American and proud to support our allies abroad. We have a lot of veterans here in Scranton, so it’s natural for us to have that on our mind and to have the sustained empathy for what the folks in Ukraine have gone through, and to care deeply about what the policy toward Ukraine and Europe is. We also have a large Polish population. Those folks are, of course, always concerned about their family abroad and what could happen if Ukraine were to, you know, fall completely to the Russians. So it really is a topic of conversation, one that people don’t shy away from. And it’s cross-partisan. I would say there are as many folks on one side of the aisle as others who you would see have a Ukrainian flag on their vehicle. So it’s an issue that does kind of cut across those divides, which is good for us and I think shows that there’s hope out there that we can—we can cross over, we can have these conversations if we keep pushing ourselves to have them, and if we have great community leadership at every level, if the churches are active, if people are active in going out and making those pierogi and helping out. It really shows that we really need to make sure the social fabric of our communities is alive and well and out there in person working toward a common goal. CREBO-REDIKER: I think that’s actually—it’s incredibly important. There’s been—up until—up until fairly recently, we’ve had strong bipartisan support in Washington to support Ukraine because, you know, they were brutally invaded. And we all watched this play out over the past couple of years. And I think there’s enormous American support. But also in Washington all of the funds that were provided and the military equipment that was provided was supported by Congress on both sides of the aisle. So what you’re talking about, Paige, in terms of having the resonance come from the ground, you know, and I think it’s not just in Scranton, but really across the country, you know, the majority of Americans really do overwhelmingly support Ukraine. And it’s war for its sovereignty. The one thing I will—I will say, one of the reasons that at the Council we wanted to make sure that we stepped up and tried to provide some helpful guidance to secure Ukraine’s future is because there are a lot of—there’s concern right now, and I think some real pessimism, that while President Trump really does want to see an end to the war, that that end will be at the expense of Ukraine’s sovereignty. So how do we—how do we figure that out, and make sure that we don’t have a situation where Putin wants victory, not peace. As you said, you have a Polish population. The Poles certainly understand what the consequences are if Ukraine falls. I think the Europeans do as well. So to the extent that we can actually work not only at the state—at the state and local level, but also make sure that it’s understood in Washington that support for Ukraine is key to not only Ukraine’s security, but to European security. COGNETTI: And I’d add to that the subnational diplomacy piece as well. That having sister cities—we’re developing a sister city relationship in Ukraine. It’s important for governors, mayors to have that that subnational tie to cities and other states abroad, so that the information is coming up from the community level. So that the folks in other cities around the world know that there are people that support them no matter good, bad, or ugly—whatever foreign policy might look like. If you have those local ties throughout the decades, that helps the understanding, that helps to keep optimism when things take a turn for, you know, reasons that are completely beyond the control of anyone in these smaller communities. Those subnational diplomatic ties and sister cities, they are there for very important reasons. FASKIANOS: Thank you. I’m going to take the next question from a raised hand from Councilmember Doug Stauffer, I believe, in Niceville, Florida. You need to unmute yourself. There you go. Q: And it is Doug Stauffer from Niceville. So— FASKIANOS: OK, thank you for correcting me. Q: Our new motto is Niceville, yes, we are. FASKIANOS: (Laughs.) Wonderful. Q: So I wrote out a little question just because—and I want to preface my question with the point that I have Ukrainian friends in Ukraine, missionary families there. But given Ukraine’s substantial economic strategic value to the U.S.—highlighted by the rare earth mineral reserves, the cutting-edge defense industry, cyber capabilities you all mentioned—do you think the United States can ensure that ongoing support does not devolve into an open-ended or endless war, but instead leads to negotiated settlement securing both Ukrainian sovereignty and U.S. strategic gains? Do you think that can even happen? CREBO-REDIKER: So I think that is—that is the ambition. And I think that President Trump has made it clear that his ambition is to bring the—or, to stop the killing, but certainly to bring the war to an end. The ending in twenty-four hours was always a little bit optimistic—(laughs)—but, you know, to the extent that there—that the administration is investing time and energy into, like, concluding a settlement, that I do firmly believe that Ukraine has, again, a substantial amount to put on the table. And I think that they are ready and willing to put shared economic—a shared economic security future together with the United States. In the back and forth of negotiations on sort of what—you know, what—the devil in the details, which is what the agreement—where the agreement will actually land, you have this week a technical delegation coming to D.C. to continue negotiating the terms and conditions. And right now, you have the fund—it’s gone—the proposal for a reconstruction fund has gone beyond just critical minerals and rare earths, and it also is—it includes infrastructure projects, all natural resource projects. As you know, Ukraine has oil and gas reserves. And so those are—those are on the table as well. And I think it’s really can Ukraine have that shared economic future in a way that provides additional funding and support, as opposed to having, right now, where the terms and conditions are basically to repay for what was already allocated from Congress during the Biden administration? And I think, you know, the devil, again, is in the details. And those details are being worked out. But how do you—how do you actually have shared economic security, which I think Ukraine is very happy to put on the table, where it doesn’t cross that line into where they’re giving up control of their sovereignty, without any guarantees, without any security guarantees, without any—without any contribution of fresh funds for those investments? And so that’s where—that’s where it stands right now. I do think that Ukraine, you know, it is still an active, you know, war zone. And they—there are parts of the country that are very much—you know, they’re contested, and a lot of the critical minerals are actually near parts of the country that are either occupied by Russia right now or in very close—very, you know, adjacent to those—to that part of the geography. But, again, it’s a matter of negotiation. I do—I’m very hopeful that they will be able to come to a conclusion. I think the Ukrainians really do want to move forward with the U.S. as an economic partner. I think that model fits very well with what President Trump wants in terms of not getting something for nothing. If Ukraine is going to continue to have U.S. support, then there should be some way to share in their economic future. And there’s also, from the Trump side, an idea that the best guarantee that Ukraine could have is if the U.S. had economic interests that were there to safeguard. So that is, you know, again, it’s a different—it’s a different approach to how we have supported Ukraine in the past. But it’s not something that Ukraine’s pushing back on. It’s just that they’re negotiating the terms of a deal right now. That deal, also just in terms of the infrastructure and sort of the having the right of first refusal on all, you know, rail, port, pipeline, you know, roads, anything moving forward, it needs to be able to coexist with Ukraine’s path to EU accession. So a lot of that infrastructure, a lot of reorienting Ukraine’s economy away from what it was in the past, which was very much connected to Russia, to really having everything moving forward connected to the European Union. And that very—that’s very much—infrastructure is very central to that. FASKIANOS: Paige, you want to comment, or? COGNETTI: No—(inaudible). Yeah. FASKIANOS: OK, great. There are two written questions, and they go hand in hand, and they’re both from Pennsylvania. So Steve Brown, who’s a township manager in southeastern Pennsylvania. I’ve attended two sessions at recent ICMA conferences about Ukraine. However, I’m struggling to figure out how a small, local government and community can support them. And then Sherry Forste-Grupp, who’s a Second Ward commissioner of Haverford Township in Pennsylvania, says: I agree with Steve Brown about how could a small, local municipality support Ukraine? How would a municipality develop a sister-city relationship with a town in Ukraine? COGNETTI: Great questions. Great to see you guys. We work with, I think it’s, Sister Cities International. And I would be happy to share that information with you offline. We can chat through. And we’ve been really lucky to work with them on the sister city in Ukraine. And then we worked with the State Department. We’re developing a sister city relationship with Armenia as well. That was through the Subnational Diplomacy Office at the State Department. So there’s different avenues, but I would love to talk to you about it. I think Pennsylvania has so many Ukrainian Americans and so many people that are passionate about supporting Ukraine through, you know, every outcome, right? And so we’d love to talk to you about that, and get you on board. CREBO-REDIKER: So there are also, you know, in terms of the—you know, there are many different challenges that that social groups are trying to—trying to solve for right now. There were—there were a whole lot of Ukrainian kids who were basically kidnapped and brought to Russia. And there’s a process to try and get those children brought back to Ukraine, and reunite them with their families. And so I know—I know that there are a lot of local community organizations that are partnering with charities that are very much focused on the return of Ukrainian children to Ukraine. So there—I mean, you can go and find those. You know, I think there’s—one of them is BlueCheck. But there are sort of different types of organizations out there that communities can connect with that really are important. They’re not necessarily, you know, sister city, but they are deeply important to Ukraine and to Ukraine’s future. FASKIANOS: Wonderful. I’m going to take the next question, a raised hand from Esmeralda Lozano, who’s a commissioner in La Feria, Texas. If you can accept—there we go. Q: Hello. And thank you for having this very important Zoom session. My town is literally about twenty minutes from the Mexican border. And immigration is always front and center. I myself am of Mexican heritage. And right now, you know, immigration is a very, very big issue in Texas. It never has stopped. I think in countries on the eastern border, it’s—you know, it wavers in terms of intensity. But in Texas, it’s never quite been something that’s out of mind. And with that said, there’s a lot of support for Ukraine from our regional area. We are a border regional area that has four different counties. And in my little small town I know that kids from our different churches want to connect with kids that are in the Ukraine. I know that we’ve got families. We have some Ukrainian families who have—who were able to make it down to the Rio Grande Valley, and who are staying with friends who were once professors over there in Ukraine, during peaceful times. But it’s kind of the same question that echoes—and I thank you, Paige, for sending us that information. But how would we go about—there are families who want to send, gently—very gently worn clothes, coats. How do we get supplies out there? How do we get money out there? How do we help? And I think this is very important because our kids are understanding that even though our country is not being very kind to Ukraine right now, they’re finding it in their hearts that there’s an importance to this. So, Paige, I’m wondering if you can elaborate on that, being from, I’m assuming, a small town. It sounds like a small town, the way, make it sound. (Laughs.) I mean, it’s way bigger than my little town of like, 6,000. COGNETTI: We’re 80,000, but it’s a small town. Q: Oh good God, you’re bigger than us, yeah, for sure. COGNETTI: So I—we’ve gone through the churches, but I can easily ask Father Myron and others what the best mechanism—or what different mechanisms would be. You know, there might be others out there that we can source for you, but I certainly can ask them what the latest is. It’s been helpful, again, because there’s family members from our community over in Ukraine. So there’s been, you know, some continuity there in terms of updating what works and what doesn’t. And then, you know, we could always ask the U.S. embassy there as well. CREBO-REDIKER: I would also look at—reach out to the Ukrainian embassy here in Washington, because they have a great—they have their finger on the pulse of all of the different resources and ways to plug in to be supportive. They’re very well aware that it’s not just the diaspora community of Ukrainians here, that there’s very—you know, there’s very widespread support. And, you know, whether it’s, you know, in educational facilities, you know, or religious institutions, that they can be a good resource for plugging into the channels that make the most sense for you. FASKIANOS: Great. I’m going to take the next question from City Administrator Bob Vitas from Illinois: In light of our experiences in the former Yugoslavia during the Clinton administration, how do you believe the U.S. will move forward, following the dismantling of the U.S. Agency for International Development? USAID played a vital role in redevelopment of all aspects of government and business in Serbia, Bosnia-Herzegovina, Croatia, and Kosovo. So, Heidi, do you want to take that? CREBO-REDIKER: So there are—I think every—you know, both the multilateral development agencies and institutions and a number of bilateral development agencies from other countries are all trying to figure out how to fill in the gaps for USAID right now. There are several—you know, I mentioned that the IMF has provided the—sort of the macro funding facility to support Ukraine’s budget. But you also have the World Bank. You have European—you the EBRD, European Bank for Reconstruction and Development. Europe has its own development bank, the European Investment Bank, which is massive. It’s much larger than the World Bank. And they are not only responsible for helping Ukraine on the path to EU accession, EU membership, but they are providing funds to small businesses, to infrastructure projects. So I think right now there’s a big rethink about how to fill in those gaps for USAID, and their absence. It’s a loss, I think. It’s not just a loss for Ukraine. It’s a loss for a lot of programs around the world. But I do think that there are a lot of other agencies that are stepping up from other countries that are filling—that are trying to fill that gap right now. COGNETTI: You know, just— FASKIANOS: Yeah, Paige. COGNETTI: That shows the importance of those subnational relationships, right? You can have a shock like this happen—I don’t think anybody saw this coming to this degree with this speed—but those subnational relationships really help because those are there regardless of changes in policy at the administration level. And while that isn’t going to, you know, repopulate the shelves for vaccines and those things that matter so much, it’s important that we keep those dialogs alive. And we add to—for, you know, my fellow Pennsylvanians on the call—add to our sister city relationships, add to the continuity and the connectivity between, you know, high schoolers and kids and families and that all that outreach, church to church, school to school, city to city. We need to keep growing that fabric, especially because we’re losing a key tool with USAID going away. FASKIANOS: Thank you. I’m going to take the next question from Tricia Utterback, who is the international trade and investment representative for GO-Biz, which is California’s economic development organization: The states of California, North Carolina, and Washington led a delegation of twenty-five companies to exhibit at ReBuild Ukraine in Warsaw, Poland. Are there local initiatives that might be able to connect the U.S. private sector to the private sector like this? CREBO-REDIKER: Yes. In a word, yes. There are multiple efforts. You know, I think, no matter how important those multilateral and bilateral development funds are for Ukraine and for its reconstruction, you also have, I believe, huge business opportunities and investment opportunities. You have had U.S. companies operating on the ground and continuing to make investment in Ukraine throughout the past several years of war. And there it’s—you know, it’s really across—it’s really across the board. Ukraine has the benefit, unlike many countries in the world, of having a highly educated local population. They are—you know, they have been able to not only connect into sort of small- and medium-sized businesses in agriculture, or in materials, because they do—I mean, they’re a huge producer of metals. In addition to—in addition to critical minerals, they have metals. Steel, aluminum. They also are in—you know, very strong in the chemicals industry. They are manufacturing for some of the European defense manufacturers right now on the ground in Ukraine, which is, I think, a great way for investment to lead to a whole new economy for Ukraine moving forward in the defense industrial base for Europe. I think there are great opportunities. I’m happy to send you links afterwards to sort of where you can find resources to plug into some of the small-, medium-sized, and even large business forums for actually investing in Ukraine. FASKIANOS: Thank you. So as we wait for more questions, Heidi, what are the implications of the war in Ukraine on global energy markets? And how have these affected local energy prices in the U.S.? And I realize this is also—the tariffs are also having an effect on all this. (Laughs.) CREBO-REDIKER: Yeah, this is quite a day for talking about how anything is impacting anything quite as much as the tariff war today, but— FASKIANOS: Right. (Laughs.) But we can try. CREBO-REDIKER: So, I mean, the—clearly, after the 2022 invasion by Russia, we saw one of the largest spikes in energy costs for Europe because of the real dependency, particularly of Germany, but not just Germany really the whole of Europe, on cheap Russian gas. So we’ve had a reconfiguration of the whole of the energy market since then. We’ve had a rolling out of sanctions that have—you know, against all ways that Russia could develop sort of the technology for advanced LNG exports. We’ve had sanctions that are specifically targeted at—targeted at the oil price for Russia, for Russian exports of oil. And we’ve had the development of this whole dark fleet of Russian vessels around the world that are—that are problematic, for a whole variety of reasons, not least of which they’re escaping sanctions and they are there—they tend to be very old ships that are environmentally quite dangerous when they—when they leak, or blow up, or explode, or crash. (Laughs.) But how has it impacted energy markets? I think we saw that big spike in the aftermath of the 2022 invasion. Complete rethink and reinvestment of Europe’s energy supply and diversification. And the U.S. has been insulated, to a certain extent, because we are—we are the largest single producer of petroleum products in the world. And as a result of that, we’ve seen more insulation. And the rest of the world has dealt with the fact that, you know, there have been other things that have had a larger impact on commodity prices, post-2022 invasion, not just Russia and not just Ukraine. FASKIANOS: OK. Going next to, let’s see, Kyle. Let me bring this back up. Kyle Anderson, who is in the Kansas Senate Committee on Ways and Means: If Russia begins increasing its use of nonstate actors—such as the Night Wolves that were involved in the initial Crimea incursions, The Base, or other related groups—how does that change the economics of the support and impact the indirect funding through production of munitions and arms to replace aging equipment that is sent to support the efforts? CREBO-REDIKER: Talking about aging equipment in Ukraine, or aging equipment in Russia? FASKIANOS: Yeah, I’m not clear. Kyle, are you in a place where you can chime in and unmute yourself to clarify? And if not, you can—if you could type. Let’s see, is he coming on? Yes. OK. You just need to unmute yourself. But maybe not. Oh, there we go. CREBO-REDIKER: Kyle? FASKIANOS: OK, we’re not getting sound. So I think—oh, he wrote it. Aging equipment from the U.S. being sent. CREBO-REDIKER: So President Trump, I believe, today announced a trillion in investment into defense. So I think, you know, we did learn through the course of the past three years the constraints that we have on the rapid scaling up of defense manufacturing in the United States was actually, I think, in a lot of horrible ways, but it was helpful to us to actually better understand where U.S. vulnerabilities are in our own defense-industrial base. So there’s the question of, you know, particularly for the large-scale manufacturing of traditional—our traditional defense industrial base. But I think almost as, if not more important, because warfare and the nature of warfare has changed completely, and it’s really taken place on the battlefield between Russia and Ukraine, we’ve seen a movement away from sort of standing armies and very—you know, very large tanks and sort of the legacy systems—move towards where Ukraine produces its own drone rocket that can, like, deliver at 700 kilometers per hour—700 kilometers in distance a strike inside of Russia to blow up refining capacity. That’s very—that’s a very recent phenomenon. It’s not anything that the U.S. has been able to develop. And we’re watching as autonomy is really driving the way that drones are communicating with each other—with one another in swarms, to be able to actually act—still with a human in the loop—but actually to keep humans out of the battlefield, as it becomes more of an autonomous—you know, autonomy becomes the definition of how we are seeing this war play out. So that’s kind of the innovation bucket. On the legacy bucket, I think we really do have to solve in the United States for being able to ramp up and produce and have a very robust defense industrial base here in the United States. Europe is having that same question. They announced—you know, Germany just announced that they are going to do a trillion euros, 500 billion euros for defense production in Germany. And the Europeans, as the European Union, are having that same conversation. Japan is having that same conversation. So we’re all, I think, in the context of a very precarious world with a lot of the challenges outside of Ukraine, particularly in the Taiwan Strait, in the Middle East, looking at what we all need moving forward. So the bad side is that it took a war in Ukraine—(laughs)—and the invasion to kind of lay bare the vulnerabilities, both on the legacy side and also on the advanced, innovative side. And I think we are collectively trying to address that right now in different countries around the world. I hope that answered your question. COGNETTI: Yeah. Can I just hop in? FASKIANOS: Yeah, please. COGNETTI: (Inaudible)—an opportunity that, like Heidi said, we wouldn’t have wanted to play out this way, that we needed this horrible war to be the catalyst for us understanding how deficient we are when it comes to rapid capability. But if that means continued investment in manufacturing, in innovation and R&D in the United States, that means that would need to happen across the country. Lots of places, like northeastern Pennsylvania, that have defense manufacturing and R&D capability already and are ready to be added to. That’s what we saw with the munitions plan. I think it’s a great example of adding capacity now that we’ve needed to, because of our support for Ukraine. I don’t see that diminishing, though. I think that those—that increase, that investment—I mean, we wouldn’t have invested a quarter of a billion dollars in that plan if we thought that we only needed it for this particular situation, right? So we’re excited, from an economic development standpoint, from a jobs standpoint. These are jobs that are absolutely family-sustaining jobs. So we can see that in places like this and across the country, you know, that’s a positive benefit from what is otherwise, you know, obviously a situation we would never have wanted to be in. FASKIANOS: Great. And I just want to share Eric Stroker, from the Office of Santa Clara County Supervisor Otto Lee, in California put in—sharing best practice. We’ll be hosting our third delegation from Ukraine in June 2025. And earlier this year our Ukraine Citizen Diplomacy sister commission held their first meeting. And we’re working to develop a direct sister county relationship with the Kharkiv region. So that’s quite interesting. And he also says Supervisor Lee has been an outspoken local leader and international ally for Ukraine and the people. Great. I’m going to go next to—oh, I think I just dismissed the wrong question as answered. Going back. Hold on. Let me just try to get it. Thank you. The next question, written question, from Zori Opanasevych, from the state of Alaska: Given the recent threats of deportation, do you know of any measures being taken to ensure that Ukrainian refugees can remain in the U.S.? The departure of these individuals can negatively impact towns across the U.S. that have greatly benefited from their contributions. What are your thoughts on providing Ukrainian refugees with the option to secure a permanent residency, should they choose, as their humanitarian parole status nears expiration? CREBO-REDIKER: Very good question. I do not know the answer to that. I think we’re all looking at—I mean, I think that there are some very big changes, obviously, in the approach to immigration and to—and to immigrants in the U.S. And, you know, to the extent that—I mean in my own personal opinion, I think that, you know, we are a country of immigrants. And legal, law-abiding immigrants, who pay taxes, and help grow the U.S. economy, and are supportive, and are here legally, is one of our greatest strengths as a country. So I do hope that Ukrainians that are—that are here for humanitarian reasons get to stay here. (Laughs.) But that’s—again, in just my own—my own capacity. And it’s not an area of my expertise. FASKIANOS: Paige. COGNETTI: Yeah, we certainly are aware of, you know, lots of different families and communities in our city that have fears of the unknown right now. And that’s, you know, across so many different nationalities and so many different levels of status and different types of protection, or what we think they’re—you know, how they’re protected right now. So our ears are on the ground with that. We’ve got great partnerships across our nonprofit and across our community to try to do as best we can to keep up with things. But it really—it is uncertain. But I think the Ukrainian refugees coming over, you know, leaving the war zone, is a great example that this can happen anywhere. And I think it’s important to keep in mind that this is—the people that are seeking asylum and seeking refuge here in the United States, they come from all over. They’re in many different colors, many different religions. You know, the world wants to be in the United States, where we have such great freedom. And we need to remember that that’s who we are as Americans and a country. FASKIANOS: Thank you. I’m going to take the next question from Davis Allen, who is the New Hampshire House of Representatives Science, Technology and Energy Committee researcher: New Hampshire saw some energy price spikes after the start of the conflict in Ukraine. So my question is, what opportunities or threats do an end to the conflict present with regard to the U.S. energy sector. Do different outcomes to the conflict have a significant impact one way or another on the sector? CREBO-REDIKER: So, yes, but it depends how it ends. So I—you know, I don’t know how this is going to end. I know that the—that the that the energy changes that Europe has undertaken have been extraordinary. And it was a huge wake-up call to Germany, in particular, but to Europe that they had depended on Russia so entirely for so many years, and that they could have this kind of a disruption. But, you know, commodity markets are global markets. So if you see price spikes that that happen for one—for any given reason, you’re going to see them reverberate through global commodity markets. Which means that we’re always going to have some impact if there is—if there is an event or if there is a policy, something happens that is a shock to commodity markets. They are global, so we will feel it, for better, for worse. FASKIANOS: And, Paige, one last question to you: Given recent changes in U.S. support from multilateral organizations and foreign aid, how are you thinking about what can be done on a subnational level to fill this void? COGNETTI: I’ve been talking with mayors about this for a while now, wanting to make sure that we stay connected to each other and connect each other with folks in other countries, because we all believe that the subnational dialog is so important. So we, you know, had worked really closely with Ambassador Hachigian in the State Department under the Biden administration. And we continue to look to CFR, to the U.S. Conference of Mayors, to other entities that keep us all connected so that we can continue to do this work and show that, you know, the cities of the United States, the smaller communities in the United States, care about our partners and allies and friends across the globe. We care because we’re people that care about our own communities. We also care because we think that our economic security, our global security, is stronger when we have those dialogs. So we’ll keep connecting. And anybody out there that wants to talk about what local leaders can do, how we can communicate together, and how we can bolster those relationships, I’m happy to help troubleshoot that. FASKIANOS: Wonderful. Heidi, any last thoughts? CREBO-REDIKER: Well, I’m just going to say that, Irina, I’m so glad you pulled us together. And, Paige, you made my day because I think when you only focus on the federal you can lose a little bit—and I live in Washington, so it’s sort of—it’s very present—that you forget that our strength really lies with state and local communities. So thank you. COGNETTI: I’m grateful to see you again, Heidi and Irina. Thank you so much for putting us together. FASKIANOS: Thank you both. We really appreciate you’re taking time out of your busy schedule. As I said at the top of this, we will send out a link to the webinar recording and transcript, along with other resources. And, Heidi, we’re going to come back to you for the resources that you referenced. Again, I want to just draw your attention to the Council’s special initiative, Securing Ukraine’s Future. If you go to CFR.org, there’s a big gyro on there. You can click on that and get a lot of resources on Ukraine, as well as on many other areas—trade, tariffs, and the like. So please go to CFR.org, ForeignAffairs.com, and ThinkGlobalHealth.org for the latest analysis on international trends and how they’re affecting the United States. You can visit Mayor Cognetti to see what she’s doing at ScrantonPA.gov, so go there as well. COGNETTI: Please come to Scranton. It’s not very far from D.C., New York, or other places. (Laughter.) FASKIANOS: I haven’t made it there yet, but I want to. COGNETTI: You’re going to go. I know you— FASKIANOS: I am going to, just to visit you. And we welcome your suggestions for topics for future webinars. We know that we should be doing one soon on immigration and what’s happening there. But send your ideas, speakers our way. You can email us at [email protected]. So, again, thank you all for your participation. And to Heidi Crebo-Rediker and Mayor Paige Gebhardt Cognetti. CREBO-REDIKER: Thank you so much. END

Diana Fuentes, executive director of Investigative Reporters and Editors, discusses accountability journalism and reporting on state politics. The host of the webinar is Carla Anne Robbins, senior fellow at CFR and former deputy editorial page editor at the New York Times.  TRANSCRIPT FASKIANOS: Welcome to the Council on Foreign Relations Local Journalists Webinar. I’m Irina Faskianos, vice president for the National Program and Outreach here at CFR. CFR is an independent and nonpartisan membership organization, think tank, and publisher focused on U.S. foreign policy. CFR is also the publisher of Foreign Affairs magazine. As always, CFR takes no institutional positions on matters of policy. This webinar is part of CFR’s Local Journalists Initiative, created to help you draw connections between the local issues you cover and national and international dynamics. Our programming puts you in touch with CFR resources and expertise on international issues and provides a forum for sharing best practices. We are delighted to have over ninety participants from forty-three states joining us today. And thank you for joining this discussion, which will be on the record. The video and transcript will be posted on our website after the fact, at CFR.org/localjournalists. We are pleased to have Diana Fuentes and host Carla Anne Robbins talking today about reporting on state house politics and elected officials. Diana Fuentes is the executive director of Investigative Reporters and Editors, IRE. Previously, she was a deputy metro editor at San Antonio Express-News. She has over thirty years of journalism experience, including roles as a state house bureau chief, editor, and publisher. Carla Anne Robbins is a senior fellow at CFR and cohost of CFR podcast The World Next Week. She also serves as a faculty director of the Master of International Affairs Program and clinical professor of national security studies at Baruch College’s Marxe School of Public and International Affairs. And previously she was deputy editorial page editor at the New York Times and chief diplomatic correspondent at the Wall Street Journal. So thank you very much to both of you for being with us. I’m going to turn it over to Carla to have an initial conversation with Diana. And then we will open up to all of you for your questions and comments. And hopefully you can share your best practices as well. So, Carla, over to you. ROBBINS: Irina, thank you. And, Diana, thank you so much for doing this. I know that you are traveling right now. You were at the NABJ conference. Is that where you are? FUENTES: Yes. Yes, we’re going to be doing some training here at the NABJ conference here in Chicago. ROBBINS: That’s great. So we will talk about training from IRE as well, which is great. So I wanted to start out and talk about the question of what newspapers can do. The assumption I’ve always had is that investigative work—and that really is sort of the most ambitious way of talking about holding people accountable, but really what we do as journalists is hold people accountable. But the assumption is that investigative work in particular is really expensive. You know, it takes dedicated teams. It takes a lot of time. You know, my friend Jeff Leen, Washington Post, before that, Miami Herald, and worked with my husband at the Herald, he used to say that the biggest challenge of investigations is knowing when you don’t have it, when to stop. But that takes a lot of time and a lot of, you know, judgment. You know, that brings a lot of resources and a lot of bandwidth, and that a lot of local newsrooms really don’t have these days. So could we start out, you know, talking about one of two of your recent award winners and finalists for local news organizations that did great work, even with limited resources? FUENTES: Yeah. I think, to just set the stage first, I do want to say that I worked a lot with community papers on the Texas-Mexico border. Small papers who have, you know, circulations of just a few thousand, for example. I think we can go to places like the Uvalde Leader News, where they had the terrible shooting, and all those children were killed and the teachers. And places like that that have actually been able to do good investigative work. And I think that we—I think you’re right, that a lot of people tend to think it’s very expensive, very time consuming. But the reality is that every journalist is an investigative journalist. That’s what we do. That’s what—we hold people accountable. It’s what we do. The main thing about it is really staying organized and setting aside time. It is—we, the small papers, the small newsrooms, the little nonprofits that have been popping up everywhere, we don’t have, for example, the luxury of, say, six months undivided attention on one project. But we can set aside time, if you work with your editor. And it is mostly—that is the biggest thing that I tell people. You need to say every Friday morning, for example, I know that I don’t have to cover city council. I don’t have to cover school district that day. What day are you free? What morning are you free? You set aside and you put it in your calendar. I’m going to spend these hours either making FOI requests, making phone calls, looking through records. But that is time dedicated. That’s primarily what you want to do. It’s key. That’s very important. But, yes. There are—people win awards. People do very good work at the local level. I want to say that, for example, there’s one particular paper that I wanted to share with you all. The—let’s see, right here—the Malheur Enterprise out of Oregon. They actually have an interesting way of doing things. They’re a small—let me see if I can share this with you all quick here. This newspaper, for example, the Malheur Enterprise, family owned, has been around a long time. They are, as—I like that they put this in their “about” section—it is a little paper. Look, it’s a small, small, just very hometown kind of place, 33,000 residents. And yet they have done, and they have won some awards in the past for stories that they do because they think it’s important. They cover regular stories. They’ve had wildfires in their backyard. They cover the pancake dinners. They do all that kind of stuff that we all—when you’re in a small place, that needs to be done. But they also do things where they found out police chief—they did this whole report on how the police chief had a reputation, innovation, strong policing. But then they found out he was doing a lot of stuff that he should not have been doing. It took them a while because they had to do other work during the week, but they found out that it was a staffing issue. They found out that he had to be—he started a whole bunch of things that he should not have been doing. He was taking illegal drugs from police files. He—all kinds of things. It took them time, but what they did was, again, they were organized. They set aside time to do this sort of work. And little by little, they found it. They had to go against locals who thought this guy was wonderful, because for many years he was a very good cop. But, little by little, you—it’s what we do for a living. But one of the things that they did was, for some things they had to get money. So they actually asked their people. It was a different kind of crowdsourcing. They asked for money for bills to pay for records. The Eastern Oregon University was charging them $75 an hour to review public documents. It wasn’t right, but they were small and they didn’t have a lot of money to fight it. So they asked their—they asked their readers. They asked the public to contribute to a fund so that they could get these documents. And they were able to do these stories. So there are ways to do it. There’s things that you can do to get it around. So that’s one of the people that is wanted. Here, let me show you one other one here. The WLBT 3. They’re a—this is a Jackson Mississippi, a small station—a small market station out in Jackson, Mississippi. They found that these people—they’ve got employees—a classic here—took more than 2,000 hours of vacation time, which he didn’t have. Another one was claiming that he was investigating cases while he was at a casino hotel doing stuff for himself. All of this stuff that they were able to do because they were checking overtime records. These people were claiming overtime when they were actually doing something else. This won them an IRE award in their division, first place. They won the award. Portland. Portland Press Herald. These were—this one was recently identified by Local Matters as one of the best stories in the nation. Very interesting. Right after they had a deadly mass shooting, they raised questions about police training. Basic questions that they were asking. OK, what did these people know? What did they do? Why did we have all these problems? What was the day? What did these people know? Basic questions that they were asking. It all started with FOI information. You know, public access to public records. Where did they find out? Again, basic questions that you ask while you’re doing your regular routine. That’s the basic information that you need to ask. It’s asking the basic questions. Sorry, I could keep going on. (Laughs.) More examples. I’ve got some more. ROBBINS: Yes, I love these. I think they’re great. FUENTES: This is a—Streetsblog is a nonprofit, online-only organization. They are local to New York. And they won for this award—they won an IRE award for their story on black market for temporary license plates. They are—they were working. It was this multipart series. It took them a whole year to do this one. But again, they were had—they were working on other stories at this time. They did have a couple of people that were focused on this. It was their story. They had—as you can see here, they talk about who—Jesse Coburn did most of the story. He had additional reporting help. They always give credit to all the people. And they worked with the New Jersey Monitor, which was a collaboration. I think that’s another big key. These days—you know, in the old days, you may remember, boy, competitiveness. I remember when we had two big papers in San Antonio. Even my small town of Laredo, when I was on the border, we were a town of about 100,000 but we had two daily papers. There were several weeklies. We had the three TV stations. We had three radio stations, all hotly competitive. These days, collaboration actually works very well. And you can rely on each other. You can help each other out. It’s an important way to do things. We can talk about that and the little way—one of the ways to get around something where you need—you need data, right? Data is one of the keys to investigation. But anyway, this was an award-winning story that won an IRE award. Again, it was a matter of being organized, asking the right questions, and just doing it. Don’t give up. Keep going. Keep going. Keep going. Keep going. Follow the money. Follow the money. That’s always the key. So that’s another one. Let’s see one, more that I was going to talk to you about. Let’s see. No, this is—these are sources that I want to—I think those are primarily the ones I wanted to point out to you today on winners. ROBBINS: That’s great. Thank you. So many cities and towns don’t have newspapers, or barely have—barely have newspapers left. FUENTES: News deserts. ROBBINS: What do you consider the most underreported local stories or targets of opportunity these days? FUENTES: School districts. I think in many places the first things that go by the wayside are the school districts, unfortunately. And those people have millions of dollars. You know, even small towns, because of federal funding, most of them have a lot of money. And consulting contracts is a big part of it. The school districts get money for everything from food contracts, to building renovations, repairs, you name it. Money is being spent on school districts. And the question is, who’s getting that money? Who are the—everything from who’s actually doing the work to who are the consultants that are suggesting who does the work? Many times, when you go and start looking into it, oftentimes—do a little cross check between who’s getting the campaign money in the school district races. In most places, those people are still elected. And who’s donating to them and who are doing the consulting is often the same people. But these days, sometimes the big election staff is down to one person, or that person ends up sharing with somebody else. Those people definitely need to be more organized than anyone else, and start looking at agendas more closely, and try to figure that out. I do think that that’s one of the big ones. ROBBINS: So, I mean, that’s great. I’m personally fascinated by the infrastructure money. FUENTES: That’s true too. That’s another big one. The MUD districts, in many places, have—the utility districts. Almost every state has those. Talk about slush funds. They create these little districts that tax—many of them put little taxes that nobody really worries about, because, you know, your property taxes include maybe fourteen cents for this and twenty cents for that. And you’re not thinking. But when you’re talking about thousands of people, it turns out to be a lot of money. And they are spending money. And those—oftentimes, those translate into bad bridges, you know, places where the work doesn’t get done but the money’s being spent, your infrastructure, you’re right, that’s a big chunk. The people that are supposed to be repairing your streets, the potholes, who has that contract? ROBBINS: So I come in and I don’t have an investigative—(background noise). Sorry, that’s my dog about to bark. Lupita, behave. (Laughs.) I come in. I don’t have an investigative team. I don’t have an investigations editor. In the old days, there were fabulous gurus who were investigations editors, like Jeff Leen of the Washington Post, Jim Savage of the Miami Herald. I mean, these are, like, incredible names over time. And one of the biggest questions I have is, you know, where do I find the information? You know, there’s lots of information out there, but, you know, everything’s online. But, you know, states and counties and local, you know, cities, they’re really good at hiding this information. Maybe they require—you know, some states have more sunshine laws. You know, they’re required to do it. Other states have less. I mean, I’m a state employee right now. I work for the—you know, I run a program at the City University of New York. They ask me, I’ve got to—I have to tell them everything about my investments and everything else. When I was at the New York Times I wrote many editorials saying this was a very good idea. Now I’m subject to the editorials that I wrote. But most people wouldn’t know how to find that information. So I don’t have a guru to tell me in the newsroom how to find this information. Who do I ask how to find all of that data that’s somehow hidden on the internet? FUENTES: You know I would—there’s several places that you can actually go these days. And one of the biggest things—and I realize it’s sort of tooting our own horn in a little bit here—but webinars. We have—IRE has a lot of free webinars, for example. And we actually have listservs. Now, some of them—you don’t have to be a member to join the listserv. Members want to help. Journalists want to help each other. You can actually just go to a listserv. One of our listservs—IRE.org. There are parts of it that are open to the public, to any journalist. And you can sign up for a listserv there. And you can ask. Honestly, just flat-out ask, where do I get this information? I see those questions posted all the time. And you will get somebody. And oftentimes, you know, somebody from a small town will get somebody from the New York Times or the Washington Post who will answer, because they want to help. And they will—and somebody—or even from their own state will answer back. I’ve seen somebody from, you know, a small town in Texas gets a question answered from somebody from the Dallas Morning News, or from the Texas—the Freedom of Information Foundation of Texas will answer them, because people want to help. There’s another organization, Big Local News. You can join that one. And they are—let me—let me just point—let me—I was looking at that earlier. Let me share that real quick too, just so people can—maybe show a picture of this one. Let’s see. Am I sharing this? Let’s see. Are you—what am I sharing with you? I’m sharing you. I’m sharing me. Hold on. Let me stop the share. One quick second. Let me look. Big Local News is the one that I would like to share with you. Let’s see. ROBBINS: Yeah, you were on—we just had Big Local News up. FUENTES: OK, sorry. Then let me get back to it. Thank you. OK, yes, there. Big Local News, which is just BigLocalNews.org. They have—they’re based at Stanford University. And maybe you know them, Carla. They gather data tools and they collaborate. And they offer a free archiving service. Cheryl Phillips, who’s active in IRE, has been—has been with us, I think, since close—not an original founder, but close to it. She’s been with us for a very long time. But they offer a lot of help with this sort of thing. And for beginning people, who don’t know where to get information in their local state. They are ready to provide you information of all sorts. And you can join them. And they’re ready also. Local Matters. They have a newsletter, this one. It’s a little awkward. It’s linktr.ee. But they’re also on our site, IRE.org. If you go to our website there’s a place at the top, if you go to resources, where you can go to newsletters, and you can—and it’s free to sign up for Local Matters. Local Matters gives you—every week they produce a list of the best stories from around the nation, where they go and they look at every—all of the front pages, newspapers of the—in the fifty states. And they’ll tell you what are best stories that they’ve got. It’s really—it’s amazing thing that they do. And they’ll produce a lot of interesting stories there that does it. And then, let’s see. Let’s see. Well, anyway, if you go to IRE.org, you get lots of those kind of things. But that’s really—and webinars. Be alert to webinars. Sign up for all those kind of—Poynter. Poynter has good—I also urge people to go to Poynter.org. They also have classes. Now, they charge a little bit for some of theirs. And the—IRE also, you know, going to the conferences, networking—network, network, network. I can’t tell you enough how much networking makes key. Look for the places in your hometown. Texas Tribune in Texas, for example, they offer a lot of things on their website. Salaries. You mentioned you’re a salary—you’re a state employee. They have the salaries of every single state employee. And they update that every year. And so if you wanted to know how much somebody makes—maybe your local college is giving you grief because they don’t want to give you their salary database. Just go to the Texas Tribune’s website. They’re right there. You can get it right now if you want to. And so they might not want to give it to you, but it’s public record. And that’s—you can do that in many places. I believe the St. Louis Post-Dispatch does the same thing in Missouri. Many states, there are people who have local organizations, there are local newspapers, local nonprofit sites that offer the same thing. ProPublica does it for all of the 990s, for nonprofits. That’s something, if you’re interested in what your local nonprofit is doing. Your United Way, for example. You might have heard something going on there. You can check their 990 and see what they’re doing, how they’re collecting money. That kind of information is available through those kind of places. ROBBINS: And 990 is a form that all nonprofits are required to file for nonprofit status. And some are more—file more richly than others, but it’s a requirement— FUENTES: But at the very least, it’ll give you some basic information. It’s supposed to tell you the top five staff members. But at the very least, it’ll tell you the executive director. It’ll tell you who the president is. Not everybody files their IRS 990 like they’re supposed to, but you get some information. And then those—I mean, and, again, I urge you, whatever particular subject you’re studying, look for the webinars. Like at IRE, again, we do free webinars for members. Occasionally, we’ll do a free webinar for everybody, for all journalists. We seek support from foundations to spread it out, to provide fellowships so that we can get more people to become members. So that’s always a possibility. If you need help with memberships, we’ve got possibilities also. That’s also on our website, where you can apply for a membership to get your membership covered. So that’s always available too. But, basically, you need to ask. That’s what you need to do. You need to ask. ROBBINS: So I want to throw it open to the group. I have many more questions, but I’ve got—do have many more questions. Irina is also just giving us a question that she wants answered, but why don’t we let—if you want to raise your hand or put a question in the Q&A, I’m sure that everyone else has questions for Diana. But while you’re formulating that, you want to talk a little bit about your experience covering state house, and tips for—tips for people, like—I think that these days government seems to be much more confrontational with journalists than it used to be. I mean, maybe not necessarily body slamming everywhere, but the verbal form of body slamming. FUENTES: But it’s pretty close, Carla! (Laughter.) It’s pretty close. I think it’s true. They’re always trying to lock us out of committee hearings. And they—even the public. I mean, never mind just us. I mean, you know, we talk about that a lot, that when you look at FOI requests actually journalists make up a very small percentage of who is actually requesting records—public records. It is the public. Attorneys, that’s true, but it’s often just regular people. Parents often are asking out in school districts, they want to know things about their kids, what they’re learning and what they’re—what’s going on with the people who are running for public office, because the reporters are not out there like they used to be. And politics. That’s a very good one, too. I always encourage people to check visitor logs. I think that’s something people don’t often look. Most everybody signs the visitors logs when they go into their state senator, or their state representative. Look and see who is visiting your state rep, who’s visiting that state senator, and see who actually—you’ll get a pretty good look at who is out there. And that may turn out to be a good story. Find out who’s visiting them. That’s public record. Do the usual things, you know, where you ask for the texts, the all of the social media. Look for all of that. That is public record in every state. Things that are paid for by the taxpayer, basically, that’s what’s public record. So ask for the cellphone records of your state senator and their chief of staff. Ask for the chief of staff’s social records. That’s important. Sorry. ROBBINS: So we have a question from Anna Mitchell. But before we go to that I did want to ask you about this sort of increasingly hostile environment that exists. And I think you made a very good point, because that sort of confrontational relationship that exists also exists between the public and politicians. If you go into a school board meeting these days, or if you go into a PTA meeting, or if you go into any of these meetings, you know, this polarization that exists on a national level exists on a local level as well. How, as a reporter, do you ask questions without getting people to go into a total screaming, shrieking defensive crouch? Because you do want to—you want to ask for their records, but you also want them to answer questions, because you—you know, how do you—how do you ask for the records and expect them to ever answer another question after that? FUENTES: I hear you. You know, one of the things that I—especially if it’s your beat, and, you’re right, what you want. I encourage reporters to first make friends with the long-time staff people—the clerks. Start there first. Because you are far better off getting the information first and then asking your questions of the elected official. Many times the keeper of the records has been there a long time. And they are oftentimes very put upon, because they have to put up with bad people, I mean, you know, or people who think they’re God’s gift to the universe. And so you’re in the same boat they are. And if you think of it that way, rather than that they are on the side of the elected official, you are more likely to get help from them. So if you make friends with that person first and get to know them before you need them, go—the whole donut/coffee thing, you know, I think it’s fair to just go visit with those people. Find out who’s got the records in your particular state senator, your state representative, for example, if we’re talking politics. And it works at the local level too. Same thing. City council, county commissioners, your parish, you know, in Louisiana where they have parishes, or whoever is in that particular area. You want to—that’s what you’re looking for, right? That’s what you—that’s what you’re looking for, right? I’m sorry. I think I lost you all. Are you there? ROBBINS: No, we’re here. FUENTES: OK, good. Sorry. There we are. So anyway, if you do that first and you’ve got the basic information I also say, like, I tend to also encourage people to go with the honey approach first. Now, it is a personality thing, I know. I tend to ask a softball question first and let them know that I’ve got the facts. I try not to play gotcha. I let them know that I have the information. So if you got the basic stuff already, so you can say, you know, sir/ma’am, I just got a copy of your credit card records for the last six months. And I see that—so they already know, too late. I’ve got it. So no sense lying to me, because I have it. So if you say it up front like that—I’ve got the last six months records, and it looks like you took your wife with you, and you paid for her dinners and her hotel room the last seven times that you went. And it looks like that’s not allowable. Do you plan to reimburse that anytime soon? You know, something like—giving them an out, maybe? Or something like that. And you are more likely to have an answer than if you say, so, have you been—you know, when did you stop beating your wife, kind of thing, right? ROBBINS: Before or after you paid for her hotel room? (Laughs.) FUENTES: Yes, exactly. I do—I will say that it’s worth it to spend a little time thinking about how you’re going to phrase the questions. Because you’re right, you want them to talk to you. And sometimes, as we know, the first question you ask is just so intense that they may never answer you. They may slam the door on you. And that’s actually going to be your story, that they refuse to comment on this information, because you have it. But I think it’s key to get the information first. And sometimes the way you do that is you go to the people who have it and talk them up first, before you go to the elected officials. There are some people that are always going to be feisty, and they see the whole world as the enemy. And they see us as the enemy many times, no matter who you are. You’re a reporter, they see you as the enemy. So the trick is—you know, we’ve talked a lot about this over time. And I’m sure you’ve seen this, Carla, where people think that Congress is evil, except their congressman. And that’s why they reelect them for forty times, you know? And that’s why they’ve been in office, literally, fifty, sixty years, even though they think Congress is terrible. And if you do a poll, everybody thinks Congress has a horrible reputation, but yet they keep electing the same congresspeople over and over. So the local congresspeople seem to be OK. Maybe because they’re bringing home the pork, but same thing can go for you. You can be friendly with your congressperson, after a fashion. And that’s how you get the information. That’s how you find out the truth. You’re not going to find it by yelling at them. ROBBINS: So Anna Mitchell or Anna Mitchell, would you like to ask your question? Q: So I unmuted. OK. Yeah, I was just—I was gratified when you said it’s all about school boards, because I’m an education reporter and was worried about joining this webinar. But two things. I wanted to throw this out, just that charter schools actually have to file 990s. And we’ve gotten some great information from 990s for charter schools, because things like how much are they paying in consultation fees and management fees. So I just wanted to throw that out there. But I’m really new to this beat. And I was wondering if you had an education reporter association or group that you might recommend. FUENTES: Yes. The Education Writers of America—the Education Writers Association, EWA. You must join them. They are very good. They have a lot of good sessions. They are—they do—we work with them a lot. We actually have co-webinars sometimes. We train at their association, and they train with us. But, yes, do you—have you heard of them? Anna, are you there? Anyway, the EWA. Q: Sorry, I was on mute. Yeah, no, I’ve not heard of them. And I also, you know, there’s so many groups out there that sometimes you don’t know the right one to join. So thank you very much. FUENTES: Right, yes. Yes, no, definitely. They are the ones you want to join. They have a lot of good ideas. Their website is very good. They have some very good databases that can help you. And they know a lot about charter schools. And I’m glad you already did—looks like you already started good—did well with them. But definitely, the 990s are very helpful for charter schools. The other thing to check with them also are property records. One of the things you’ll find many times charter schools, one of the things they do is they own a lot of property. And the people that found them own a lot of property. And they also, because of the way they’re set up, they often do a lot of campaigning. I’m sorry. They donate a lot to election campaigns. So you should cross reference them with the—with your local congresspeople, your state representatives, your state senators, and with your governor, whoever’s running the charter schools. Q: Thank you. ROBBINS: That’s great. Thank you. We have a question from Griffen Smith in the Q&A. Griffen, from the Missoulian. Griffen, do you want to ask your question? Q: Can you hear me? ROBBINS: Absolutely. Q: Yeah. My question’s about, you know, private messaging boards. I am the government reporter over in Missoula, Montana. And recently we’ve been talking about a private signal group chat that some counselors use. And so my question is generally how do you kind of get into that information that, you know, people say might be private, or harder to access with the traditional public records? ROBBINS: And you had written and said the councilors say there are no quorums present with the group chats, and therefore it isn’t a public record. Q: Correct. FUENTES: That’s not true. If they are discussing public business, even if there is no quorum, that is public. The one thing that is an exception is if they’re discussing—and this—it’s a gray area, but it’s more defensible—is if they’re discussing a pending lawsuit. If it’s a matter of a law—but it can’t be a—it cannot be a possible lawsuit. It actually has to be a lawsuit that has been filed, in which case they could discuss that. Like I said, there’s a—if their attorney’s there, for sure, that’s is not public record. If their attorney is not there, they could discuss it, potentially. That might be. It’s a gray area. They could be having a private discussion to talk about negotiating, for example. And that is oftentimes considered not public. If they’re discussing negotiations for a contract, that sometimes is considered not public. But everything else, I mean, that—they’re talking about public business, even if there is no quorum and they are—that should be public. I would go to your—let’s see. I’m sorry. What state are you in? ROBBINS: Montana. Q: Yes. FUENTES: Montana? Let’s see. Let me check real quick. I was going to suggest that you go to your—who’s in the—who’s Montana? Montana has the Montana Freedom of Information hotline. Have you ever worked with them? Q: Not for this issue, but for other things, yes. FUENTES: Yeah. You might ask them. They might be able to get you help with one of their attorneys, just to double check with them on that. Because it sounds to me like they should be giving you that information. You might need help. You might need to get somebody to help you. The NFO—if you do need to go to a lawyer, the NFOIC has grants for that. And the Reporters Committee for—the Reporters Committee for Freedom of the Press, they also have some money to help with some kinds of cases, if you need to go to the attorney for that, if you all can’t afford it. Q: Yeah. Thank you. ROBBINS: Griffen, have you—Griffen, have you written a story about this? What are they hiding? FUENTES: Yeah, yeah. That’s always a classic. Q: Yeah. We’ve written a story, yes. But, you know, not too much about what’s inside that information. ROBBINS: But people aren’t—your readers aren’t pissed off that they’re hiding in this—that they’re doing the people’s business in a secret way? Q: You know, TBD on that. I mean, I’ve definitely heard feedback on it. But it’s not the biggest story in town. FUENTES: I was going to—you know what happens is lots of times unless you can tell people what it’s about, you know, lots of times the public really doesn’t care about our problems. You have to be able to say, look, they’re talking about spending taxpayer money, you know. You have to say what it’s about. There was a good story about where, if you can tell them, for example, the judge is blocking information about the evidence on this serial killer, now you’re talking about people getting concerned. You know, this kind of thing. Or there was this really—a big case having to do with child abuse, and the judge is blocking the evidence and is not letting anybody see it, and when it’s clearly public record. Then you’re getting—you can say it. I can see where, in Griffen’s case, maybe you can’t say what it is because you don’t know what they’re talking about. But I’m glad you wrote about it. Q: Yeah. Thank you. ROBBINS: We have a question from, is it, Laura, is it Guido or Guido? Laura, do you want to ask your question? And can you tell us with whom you work? Q: Hi. Yeah, it’s Laura Guido. I’m with the Idaho Press here in Boise. And one thing that the whole press corps has—or, all the capital correspondence have is we’ve noticed that our state lawmakers search their own emails when they respond to public records requests. They kind of just forward—the records clerk will, like, forward us their forwarded message. And I just wondered if you had tips to, like, ensure we’re getting all the records that we should be getting. FUENTES: So you mean, like, they scan them before they give them to you? Q: Yeah, I mean, what—basically what we get is, like, a PDF of messages that were forwarded to the clerk. And then the clerk sends us the records. But it’s pretty clear that, you know, when we send a request, they’re asking the lawmakers to search their own emails to fulfill the request. FUENTES: Yeah. That one is stickier because I guess what they’re doing is they’re using their personal cellphone for personal business and state business, right? Q: I think it’s all on their state devices, but I’m not sure. FUENTES: The reason I’m asking is because sometimes what they’ll do is if they’re using their personal cellphone for that, and they get—like, for example, they might get a stipend rather than a state-issued phone. If they get a stipend, then they’re using—and they’re using a personal phone, they’re supposed to go through their messages, and that’s what they’re doing. They’re sending what they claim are their state messages, right? And that everything else is their personal, you know, yes, honey, I’m bringing home turkey for dinner. You know, stuff like that. And so they don’t have to send you that, because that’s personal. Now it gets sticky. It’s worth the story at that point to say—because I think that the public would be interested in—because how are the cellphones done? Who owns the cellphone, and how are they—how is it being accounted for? I think that is something that the public would care about. One of the ways that you can tell what they’re accounted—whether you’re getting everything is look at your time stamp and your days. Are there days and times—like, are there blocks missing? Like, if—is this—you said this is state officials? Q: Yeah. FUENTES: So, for example, if it’s a state legislature, right, a legislator, and the legislature is in session. And there’s—you knew that they were in session. And so they’ll give you, like, from—you know, that the session was going on from 2:00 p.m. to 6:00 p.m. And they give you from 2:00 to 230. And then—(off mic)—when they were actually—something was going on. Do you ask for texts as well? Q: Yes. Mostly email, though, is mostly the responsive records that we end up getting. FUENTES: Yeah. I would—I would encourage you to ask for texts as well, right, just to push for that too. Texts and emails. But then if it’s emails, is it their government email, or is it like a Gmail or Yahoo? Q: It’s their government email. FUENTES: Well, if it’s their government email, why are they forwarding it? Everything that’s in there should be public record. Have you—I would—that’s one where I would—Idaho has a good—they have a good one. the Idahoans for Openness in Government. That’s their FOI organization there. I don’t know if you’ve had a chance to work with them. Q: Yes. Yeah, I have. FUENTES: I would—I would ask them about—you know, double check the law, but I think that if it’s their government one even if they’re using—even if they’ve got personal messages, if it’s their government email they give up the right to privacy. They should be giving you every single email, even if it’s personal, because they shouldn’t be using their government for personal use. I think I would argue—you know, I would ask them for it, and press that on a legal point. And see if the Idahoans—the organization there might—you know whether maybe you working with some of the other media in Idaho would work together and, you know, send them a letter. Have a lawyer send them a letter. Not sue right away, but say that you think that everything that they have on their government email is public record. Does that help? Q: Yes, thank you. FUENTES: Yeah, I would push them on that. ROBBINS: Well, while we wait for more questions I wanted to—you had mentioned data and how essential it is. The ability to manipulate data, to crunch data, is obviously an absolutely essential skill set. You know, in the old days there was a dedicated team. There was a data wizard in every newsroom, although these days people have their own wizarding capabilities with data. We all live with data a lot more. Has the technology progressed to the point that we don’t need to have a data wizard, that we can all do it ourselves? Is there particular training that people can point to? Or do we still need to have what we used to refer it was computer—remember computer-assisted reporting? (Laughter.) FUENTES: Yeah. No, you still—I think you’re right that more people know how to do it themselves. We used to have—our data services was a lot more busy than it is now. A lot busier than it is now, because we’ve we basically trained ourselves out of business for a lot of things, because a lot of people can do it. But I will tell you that at our conferences, for example, and we do teach webinars about this too, one of our most popular classes is still basically, you know, a spreadsheets 101. People still want to know how to do Excel or Google Spreadsheet—essentially the same thing, just a different program—but how to—how to do that. How to do pivot tables. You know, how to do—how to read a budget. You know, how to—how to handle numbers. And then a little further, if you go a little more, which is working with SQL, or, you know how to scrape a website with Python coding a little more, which is more intense. But those are things that—those are popular classes for us. We actually do boot camps which we still get people to come, and we do fellowships for those. That training, you can still get it. I think it’s still worthwhile. People do want to learn that. We also—we still offer that. If people want to—if they feel like they’ve got a big project and they don’t—they don’t have the skill set in their newsrooms, we offer what we consider affordable rates to do the work ourselves. We’ve got—we’ve got students who do that kind of work. So they get the experience, and we charge less than somebody with charge. We do—for example, every year out of Illinois we have an organization that asks us to clean up the data on the employee salaries, so—for the city government. It’s an open government thing that they do. And we offer that. And we do it every year. So we can do it. You can pay someone to do that kind of work. But I think more people know how to do Excel. But with Excel, that’s pretty much all you really need. You know how to do a spreadsheet, how to manipulate. These days most organizations—occasionally, you’ll still have, you know, a bulky organization out there, an entity that wants to give it to you as a PDF. But these days, there’s, you know, tools that can turn the PDF into a manageable, searchable database. And then you can use your spreadsheet skills to manipulate the data, so that you can get it to tell you what you need, you know, to figure out whether it’s a worthwhile story. But, yes, I think it’s worthwhile taking those training courses. And you can learn it. It’s not that hard. ROBBINS: We make all of our grad students learn how to work with Excel and do basic data scraping, and to do—and these are all—these are all sort of basic skill sets not just for journalists, but basically for survival these days. And to read a budget. I’m still into— FUENTES: Yeah, how to read a budget. ROBBINS: To be able to read a budget. So Sofia Langlois. Sofia, you want to—you want to voice your question and tell us for whom you work, or with whom you work—depending on how you’re feeling that day? (Laughs.) Sofia, are you— Q: Oh, sorry. Can you hear me all right? ROBBINS: Absolutely. Can you tell us with whom you work and then tell us your question? Q: Absolutely. So I work for the University of Maine student newspaper. ROBBINS: Great. Q: And my question kind of goes back to freedom of access. What would you say is the fastest way to access public records that would contribute to a breaking news story? I found that city council will sometimes take the maximum amount of legally allotted time to share information, but timeliness can be crucial to a story. FUENTES: Yeah. You know, one of the best things you can do is actually advanced planning, before the news breaks, right? Before breaking news. We always encourage people, kind of what I had said earlier, where if it’s your beat, things that you learn about, find out who is the record custodian so you can find out ahead of time who it is that has the information and how they like to ask—how they want to know the question right? Most everybody has either a favorite form—do they want to—will they listen to you by phone? Do they want to have it by email? Do they need something in writing? Find out ahead of time how they want it. And find out who the right person is. Because that can take up time, right, when you want to find the information. If you make friends ahead of time, when the breaking news comes they’re more likely to help you. Whether that’s fair or not, you know, the reality is everybody’s human. And if they know Sofia and they don’t know Diana Fuentes, they’re more likely to give you the information and make me wait. That’s just the way it is. So that’s the first thing I would encourage you, is go out now and find out, even if it has happened to you in the past that you already had to wait for a long time. Go—it’s never too late to make friends. Go find out who the custodian of the records is for all of the different things that you might need, and—police departments, city council, the different agencies, planning and zoning, you know, the plumbing, the commissions for the different departments that you might need. And find out who actually keeps the records, who would need what you might. We always tell people ahead of time for breaking news is the best thing you can do is plan ahead. Stockpile your information ahead of time. Do get three and five years’ worth of information. Salaries. Things that you already know that you might need—salaries, budgets, what is that year’s worth of information, who is in charge of, what, what is the organizational chart? All that kind of information you can get that now and you might need it if there’s breaking news, right? Who’s in charge of—for the police department, for example. Who is in charge of emergency management? Is it the fire marshal? Is there an actual person who’s in charge of emergency management for the whole county? Is there somebody separate from the police, who’s separate from the city, who’s separate from the county? Is the state person in charge? Do they name somebody? You need to know that now before there’s a disaster in your area. That kind of information, do the planning ahead of time. It’s true that when it actually happens there really is no way to force them to give you the information, because that’s the law. You know, the law that is in your state that says that they have—in Texas, for example, they don’t have ten days to provide the information. They have ten days to decide whether they’re going to appeal to the attorney general to argue that they don’t want to give you the information. There is stuff that they are supposed to give you automatically. There’s, for example, what they call the first page of a police report. That has been said over and over and over and over that—and it’s been defended a million times in court—that they have to give you that information. They don’t have ten days. They’re supposed to provide that to you when you ask for it. They’re supposed to be able to show it to you. Some of them take ten days to give you that information. They don’t have it. However, Texas does not have teeth in the law. If they take ten days, there’s nothing—there’s no penalty. We are arguing for that here in Texas, to try to make them a penalty. But right now, if they don’t give it to you in ten days there’s no penalty. So they don’t give it to you, well, they’ll get yelled at, maybe, but that’s about it. So you need to do—go around them. And the way you do that is you make friends and get them to be able to give you the information when you need it. ROBBINS: And this stockpiling of B matter is, like, really, absolutely essential. I mean, just the context stuff is—having previous years of comparative data and all of that, just which is absolutely, when there’s breaking news, is just great. Because then all you’re missing is just the most recent data. And just because it gives you the absolutely essential context. And it also makes it easier to pry information out of people. FUENTES: Basic information that we talk about that you should always have on hand are budgets, salaries, and organizational charts. Who’s in charge? Those are the very basic—very basic things that you need to have. Check registers, credit cards. Sorry, you have somebody else, a question? ROBBINS: Charles Robinson from Maryland Public Television. Charles, you want to ask your question? Q: Sure. Many of you probably already know that we had this bridge that collapsed in Maryland. And one of the things I’m concerned about is, you know, first of all, the contracting of who’s going to build a bridge, where the money’s coming from, and, you know, who will benefit from this? Don’t get me wrong. You know, every lobbyist in the state of Maryland has, you know, got their finger on a piece of this action. And, you know, look the governor is very popular in the state. A, d of course, he has delegated it to, you know, the transportation secretary, whose track record is not very good. In fact, they had to slash the budget, and they’re continuing to slash the budget because they’re not going to get any revenue from, you know, tolls that are going back and forth. I don’t know if you can point me in some—you know, into—from the both the local level and federal level, you know, what should I be looking at? FUENTES: One of the first things I would do is, the people that they’re considering is I would, again, cross check with campaign records. Look at the—because even though the governor has transferred the authority to the transportation chief, I would still cross check all the people who you hear their names are being considered. Cross check it against the governor’s last four—his last couple of elections. Look at the campaign finance record and see if any of them have donated. And go beyond just—you know the look up those companies and see who the presidents are and who the officers are. For that kind of information, you’ll need to go to—usually the secretary of state will have business records. Sometimes you’ll need to go to the city of wherever their headquarters are. You can sometimes find it—sometimes things like building permits. If they build an office, they’ll need a building permit. And that often will give you information that you might not get at the secretary of state level. But you’ll need to find out who is connected to that company and see if any of those names pop up as giving money to the governor. I think that’s one of the things you want to look at because that’s how you’re going to find out if there’s any skullduggery going on. That’s one of the chief things that I would be looking at. Q: We get lobbying records. We get lobbying records. So, you know, I can look at, you know, who is, as I like to say, trying to grease the wheel. FUENTES: Lobbying is good too. But that’s separate from campaign finance, because oftentimes it’s not the lobbying. The lobbying is being done behind the scenes. Somebody is donating money straight directly to it. So you may not know that, you know, Charles Whitaker who owns this company has been quietly giving the governor money for the last twenty years. And he may not be paying for a lobbyist, but he didn’t have to, right? Because he’s been giving the governor, you know, thousands of dollars for his campaigns. And it might not just be for being for governor. Maybe—I don’t know what the governor did before—but if he ran for Congress, or if he ran for—if he was in the state senate, or if he was a lieutenant governor. I would look at those kind of—start with the most recent race, of course. But that’s one thing. The other thing you might look at, on a separate kind of issue, is what is the OSHA record for all of these companies? If they had any kind of injuries or deaths associated with these companies. Those have to be filed. Reveal has a really good database on OSHA records that’s easier to search than just the OSH. OSH is the Occupational Safety and Hazard Administration. And all record—all work-related injuries and deaths have to go with them. So they’re required—all companies, big companies, are required to file with them. So I would check those records too, so you can find out how safe are these companies. Q: All right. Thank you. ROBBINS: That was great. Diana, we’ve run out of time. I’m sure we have many more questions. I just want to thank you for taking so much time. And I’m going to turn it back to Irina. And thank everybody for great questions. FUENTES: I did want to say one quick thing. If you all have questions, and if I can help with anything, my email is really easy. Just [email protected]. Just regular D-I-A-N-A at IRE.org. And I’m happy to help anybody. ROBBINS: That’s great. Thank you. FASKIANOS: Fantastic. Thank you, Diana Fuentes and Carla Robbins, for this terrific conversation, and to all of you for joining from across the country. We will send out a link to the webinar recording and transcript soon. We’ll also include Diana’s email address so you can contact her directly. And you can follow our speakers on X at @DDFOnline and at @RobbinsCarla. And, as always, we encourage you to go to CFR.org, ForeignAffairs.com, and ThinkGlobalHealth.org for the latest developments and analysis on international trends and how they are affecting the United States. We also have launched a hub for election 2024 on the CFR.org site where we are tracking issues that connect with foreign policy and local. So I commend that to you for additional information and analysis on the election as we gear up for November. And, as always, you can suggest topics for future webinars by emailing us, [email protected]. So, again, thank you all for being with us today. And we look forward to continuing the conversation. FUENTES: Thank you, Carla. Thanks, Irina. ROBBINS: Thanks, Diana. Thanks, Irinia. FASKIANOS: Thank you. FUENTES: Bye. (END)  

Eric Doucette, captain in the U.S. Coast Guard and visiting military fellow at CFR, discusses the primary missions of the coast guard including disaster management, protecting U.S. ports and shorelines, and other areas where the coast guard cooperates with local officials both domestically and internationally. A question-and-answer session follows his opening remarks. TRANSCRIPT FASKIANOS: Welcome to the Council on Foreign Relations State and Local Officials Webinar. I’m Irina Faskianos, vice president for the National Program and Outreach here at CFR. CFR is an independent and nonpartisan membership organization, think tank, and publisher focused on U.S. foreign policy. CFR is also the publisher of Foreign Affairs magazine. As always, CFR takes no institutional positions on matters of policy. Through our State and Local Officials Initiative, CFR serves as a resource on international issues affecting the priorities and agendas of state and local governments by providing analysis on a wide range of policy topics. Thank you all for being with us today for this discussion. We’re delighted to have over 400 participants from forty-seven U.S. states and territories. And as a reminder, this webinar is on the record, and the video and transcript will be posted on our website after the fact at CFR.org. Each year, CFR awards five military fellowships to outstanding officers from each branch of the U.S. armed services. The Visiting Fellowship Program enables selected officers to broaden their understanding of International Relations while on active duty by spending a year in residence at CFR’s headquarters in New York. Our military fellows conduct individual research, contribute their knowledge and experience of their military service, and participate extensively in CFR meetings and events. So with that, we are pleased to have Captain Eric Doucette from the U.S. Coast Guard with us today. He is CFR’s 2024 U.S. Coast Guard military fellow. Prior to this role, he served as the chief of staff for the Coast Guard’s Ninth Coast District, which encompasses the Great Lakes, the St. Lawrence Seaway, eight states, and a 1,500-mile international border with Canada. Captain Doucette also previously served in the White House as special advisor to both Vice President Joe Biden and Vice President Mike Pence from 2016 to 2018. So, Captain Doucette, thanks very much for being with us today for this conversation on the Coast Guard’s cooperation with state and local officials to protect U.S. coastlines, waterways, and maritime infrastructure. The U.S. Coast Guard obviously serves many functions. I thought it would be great if you could begin by talking about your—or, the Coast Guard’s primary missions, and discuss the areas where the Coast Guard is cooperating with local officials both domestically and internationally, and where there are areas of opportunity for further growth. DOUCETTE: Well, thank you. Thank you, Irina. The Coast Guard, we’re a 50,000-plus person organization. And we’re spread all around the country. So we’re embedded with local communities within the states. And most other first responders think of the Coast Guard as part of their local team, because we happen to be there. So search and rescue operations is one of those areas, rescue mariners in distress or people that are out for recreational boating. And law enforcement goes hand in glove with that mission. Working with state police or other maritime or harbormasters. So the Coast Guard finds itself work law enforcement issues domestically in all the small communities around the country. Environmental protection, that’s a big area that not only do we work with the EPA on the federal side, we work with the state arms that do environmental protection. We work with industry and private sector to address spill response plans or hazardous material response plans. We support FEMA during natural disasters with dealing with hazardous materials. But port security and safety, looking at the overall port operations that happen in our major ports and in our smaller ports, the Coast Guard worked closely with the Army Corps and also with state port authorities to make sure that the waterways operate just as safely as the highways and the byways of our country. And then training and exercise. The Coast Guard is another force multiplier with local agencies, state agencies, and other federal agencies. They all do a great job shoreside, but also you have to do that operation in the maritime. The Coast Guard expertise with small boat operations, working in a maritime environment, we can help local hazmat teams, firefighters, in how to address issues that may be offshore. And then maritime planning and regulations. Working with development plans with port authorities or working with expansion or changes in how ports may operate. We are heavily involved, with our captain, the port authorities, working with state regulators and managing, again, those waterways. Just like similar to how the FAA would work with airports, and how to manage that type of change over the years. And we do a lot of public outreach and education. We do partnerships in education. We do events with the local community. We try to get involved as much as we can, so that the community has free access to the Coast Guard in their community. On the international cooperation side, counter-narcotics and antipiracy operations. Capacity building with other nations. Most navies in the world look like a U.S. Coast Guard. And they don’t look—they don’t have aircraft carriers and destroyers, but enforcing fishery regulations, enforcing environmental regulations, boat and safety for their—or helping their fishermen of their—of their nation-state is an area that the Coast Guard has unique skills where we can help other nations trying to build their capacity. Environmental protection. We definitely have a lot of expertise in that area that we can go around the world and help other nations that may have oil spills or their environmental disasters from ships. And then search and rescue, which is, again, our—one of our bread-and-butter pillars of what we do with domestically. It’s something that we can bring overseas and help develop capacities for other countries if they want to have a twenty-five mile—nautical mile offshore capacity for search and rescue. And you do that with helicopters. You do that with small boats. You do it with cutters and other—when I say cutters, that ship—that’s the Coast Guard term for a ship. And so, it’s a global Coast Guard. Again, we’re everywhere in the country, even on inland rivers. So, if some of the listeners are of a landlocked state, you might not think that the Coast Guard’s part—we operate our ship inspectors and work with your local agencies along a lot of the byways where barges are—up and down the Mississippi, or in other—the Ohio River, and other locations throughout the country. FASKIANOS: Fantastic. That’s great. And are you—what are you doing to enforce illegal fishing regulations? DOUCETTE: Well, I mean, so domestically we work, again, with the state wildlife officials, enforcement officials, that making sure that fishery—the state fishery laws, and the Federal fishery laws are enforced. International, one of the terms out there is IUU—illegal, unreported, and unregulated fishing. So, in fact, just this week, an agreement was signed with Samoa—the country of Samoa, not American Samoa—but where the U.S. Coast Guard could help enforce regulations within their exclusive economic zone. So, we can look for other state actors, or sometimes vessels that are stateless, that are they’re trying to fish in their EEZ. And no one’s regulating them, or inspecting what they’re catching, or how much they’re catching, or if they’re catching juvenile species, or protected species. So, we can board those vessels. And we have those cooperative agreements with a number of countries. But now, in this day and age, you know, we’re using a lot of satellite technology and working with other partners to help target some of these actors that are out there, because those fish resources are protein sources for a lot of these countries that don’t have a robust coast guard, or a way to protect what they need for their fishermen and for their own populations. FASKIANOS: Mmm hmm. Fascinating. I can continue on with questions, but I want to give people the opportunity to raise their hand. You can click on the raise-hand icon. And I will call on you to ask your question. Or you can type your question in the Q&A box. And we’d love to hear—for you to also share best practices or your experience, because this is a forum where you can exchange, and we hope that you’ll exchange, ideas and resources. So, we’re going to see if anybody has raised their hand. We have one raised hand. If you could identify yourself too, that would be fantastic. Going first to Kelly Bartlett. Q: Kelly Bartlett, Michigan Department of Transportation. Thank you for putting this out. Thank you for taking your time. I have two questions, one kind of immediate and one farther out there. The first, the immediate question, been on everyone’s mind lately with the—you know, the tragic incident in Baltimore with the Francis Scott Key Bridge. I’m just wondering, what’s the role of the Coast Guard in a situation like that? You know, where there’s a critical waterway that all of a sudden has this event and it affects, you know, all sorts of shipping and land-based movements. So just wondering if you could walk through what your role in that would be. And then, more abstract, farther out, Michigan Tech University is doing some work on leading to, we hope, autonomous freighters around the Great Lakes. And I’m just wondering if you have any thoughts on what pops first in your mind in terms of, whoa—we’d be really anxious about that or, you know, bring it on. So two wildly different questions, if I could. DOUCETTE: Great. No, thank you for asking both those questions. So just to, you know, step back, before the event in Baltimore happened, in all the ports around the country there’s—you know, there are port authorities, to varying degree, that are regulated, managed by the state. There’s pilots. And then the Coast Guard itself, we have a number of committees, going back to our planning function, that we involve. And we bring all private and public sector together to discuss issues like safety of the port. And so there are harbor safety committees. There’s area maritime security committees. And there’s area committees. The area committee deals more with environmental issues and threats, air and maritime security, that came out of the post-9/11 environment, brings a lot of law enforcement community together. And then the harbor safety committees, again, that’s the pilots, the operators, you know, the people that are operating that waterway to make the port safe, to make sure that dinner boat cruises can operate, that container ships or oil tankers or other ships that may carry hazardous materials, or if there’s visiting U.S. Navy ships, or even ships from other countries, that everyone is aware of how the port is operated. And in some ports that are busier, they have these vessel traffic services just like air traffic control. So those committees would have said things like under-keel clearance, they would have set things—what that means is that when a ship comes in, it can’t touch the bottom of the harbor. And that might sound funny, but a lot of our harbors are silted. They require the Army Corps to dredge them. And so it—sometimes the ships actually do touch bottom when they come in. But most ports, it’s set at two feet below those vessels when they come in. And there’s tidal differences. So these are some of the safety things that get discussed. Other things that get discussed in different ports where there may be some infrastructure at risk, maybe there’s a requirement. And, again, the Coast Guard Captain of the port in those different ports would help enforce those regulations or set those regulations through a rulemaking. But it would be a tug assist. So I was the captain of the port in Boston, prior to my time in the Great Lakes. And there—were there were liquefied natural gas ships would come in. And they had a big security footprint around them, with all sorts of states and local agencies. But at the same time, we had safety assist tugs that would help navigate them under the Mystic River Bridge and under some other some other tight spaces that they would operate. Now, jumping to your other question—or, actually, before I do that, and so then, when you see the event that happened in Baltimore, there’s a number of other plans—the National Response Plan, the National Contingency Plan. And I would—my best guess is that those are the type of plans that help provide the framework for all the agencies to work together down there in Baltimore. And when that actual incident happened, you saw the Coast Guard performing search and rescue. But we don’t do that by ourselves. The state of Maryland, the local harbormaster, and other local police forces and fire departments were all involved in that effort. And then one point is the dive teams. So those are integrated dive teams with state police, local fire departments, and then there’s the broader operation of working with the Department of—I mean, excuse me—Department of Transportation and FEMA to help get funding and assets. I think there was a presidential declaration. And I think at least the initial $60 million that helped get some of the operations funded. But—and then bringing in large cranes and other apparatus. That is a whole East Coast, you know, nation effort to bring the right equipment there. And when you see the pictures of the people cutting steel, and you think about how big that steel girder is, or if you drive over any large bridge, just how big that structure is. It may seem like it’s taken a lot of time to open that port up again, but it is a big structure and it takes time to lift each piece out, and to do it the right way. And they’re also doing it when there’s a natural high-pressure gas pipeline that’s right underneath a lot of that debris. So I know that a lot of care and effort’s going there to try to get that open quickly, but open safely. On your question of autonomous vessels, that has come up. Again, back when I was captain of the port in Boston, I approved a small vessel—it was called a Datamaran. It was a catamaran, but someone mistyped D, and it stuck. And it operated—MIT was operating it. And collected data for offshore wind. But this little vessel could tack like a small sailboat. And it didn’t require any people on board. And we also had the Mayflower II that was coming—it was before COVID. It was supposed to be here for the 400th anniversary of the Mayflower coming. And that vessel too had—it was a larger vessel. Didn’t have anybody on it. But even when it got close to shore, there was still—it was big enough that we would have to have some requirement that would have an assist vessel or someone that was with it. But throughout the country, there’s all these efforts for autonomous vessels. Elon Musk’s SpaceX, they have offshore—large, autonomous vessels that go offshore for the space launch. And they would love for those to operate without people on board, or assist people. And we know it’s—we know that it’s coming. But it’s still—the rules of the road still require a human eye to be there, to intervene given any type of situation that could happen at a moment’s notice, and alert. And going back to Baltimore, though there will be an investigation to why that took place, but it appears that there was some sort of power outage. The pilot on board taking quick action, notifying their response network to stop other vehicles from coming on board that bridge, you know, saved lives. And so that human operator being involved, I think that’s going to be the trick with autonomous vessels, is how do we ensure that there’s still someone that can make quick action. They may or may not be on the vessel, but they’re going to need to be able to react quickly and operate with people in that local environment. FASKIANOS: Thank you. I’m going to go next—we have lots of hands raised—going next to Linda Grisby. Q: There we go. Can you hear me? FASKIANOS: Yes. DOUCETTE: Yes. Q: Good afternoon, everybody. I’m curious about the invasive species in— FASKIANOS: Linda, can you identify yourself? Q: Oh, yes. I’m Linda Grigsby town of La Plata. FASKIANOS: Thank you. Q: You’re welcome. But I’m curious about the invasive species within the rivers. What are we doing to—what can we do to get rid of those more on a local level? DOUCETTE: Yeah. So I just came from the Great Lakes. And invasive species are a big issue. And so there’s different places that we work in partnership. Again, a lot of it will be, like, U.S. Fish and Wildlife and the state and local fish and wildlife entities. But there’s places where we will help with monitoring. We also do a ballast water program. So when foreign vessels come from other countries, they have to shift their ballast water, because sometimes that’s how invasive species came to our country in the past. And we test for salinity, to make sure that they shift—they shifted that water, so they’re not taking port water from a foreign country and bringing it to our country. That they’re actually shifting that at sea. Excuse me, one second. And then there’s also a number of other devices, especially up in the Great Lakes, in the rivers where they have the invasive carp. Excuse me. And they have electric fences, and have other detection crews that will go out and try to harvest those invasive species so they don’t get into the Great Lakes. And we—again, we will work with any agency. One of one of the agencies we work with the most is NOAA. And they will help us with a lot of scientific support coordination with other species that we’re trying to protect. But invasive species is a big issue. I think if anyone is a recreational boater on domestic lakes a lot, there’ll be a lot of invasive plants, other issues, that they try to control going from lake to lake. But in the coastal environment, there are different species—green crab, a number of other—zebra mussels, that we’ll work with water authorities and other entities, in any capacity to help, you know, retard or slow down the growth of these invasive species. FASKIANOS: Thank you. I’m going to take the next question, a written question from Massachusetts Representative David Biele: Is the U.S. Coast Guard involved in any fisheries enforcement with foreign nations in the North Atlantic, like that in the Pacific? DOUCETTE: Yes. We have ship rider programs. And so, you know, Canada being our closest partner, we will, in that neck of the woods, a lot of times U.S. Coast Guard vessels will be patrolling Canadian waters, and a lot of times apprehending U.S. fishermen that are operating in Canadian waters, to bring them back because. And it’s usually not the other way around, where the Canadians are coming into our waters. So we work—we have an agreement with Canada. And then we also have ship rider programs in the Caribbean and other locations, other countries. And we’ll bring their officers on board our vessels. they can see how our folks operate, to provide some education. We’ll take some of our best practices, like—things like fisherman’s nets, where they may be catching fish that have, like, turtle exclusion devices. So if the turtle gets caught in the net, the turtle can get out—has a way to get out. And then also, we’ll inspect the hulls of the catch to make sure they’re not catching any species that are—that are protected or undersized. A lot of times we’ll do those fishery boardings at sea, but we can also work with other agencies to do those boardings at the pier as they’re offloading or trying to sell the fish. And then a number of the vessels also have beacons or—that they have to display. And, you know, we can track those by satellite, and make sure that they’re fishing in the right zones, in the right areas, that are open for fishing, versus the regulated or closed areas. FASKIANOS: Thank you. I’m going to go next to James Murley with a raised hand. If you could identify yourself. Unmute yourself. There you go. Q: Thank you, Irina. My name is Jim Murley. I’m the chief resilience officer in Miami-Dade County, where we have a deep water port. The largest cruise ship port. And we also have a shallow Miami River Port. I would like to start by saying Sector Miami is a fantastic organization, the Coast Guard are professionals. We are a maritime border state and the interdiction responsibilities they carry out in multiple ways keep our citizens safe. So thank you, sir, for that service. My question has to do with derelict vessels. I’m charged along the Miami River right as we speak with a vessel that the Coast Guard interdicted, and brought on, and found a place to tie it up. And, you know, if there’s a car on the street, I can get rid of that car. Because the derelict vessel’s tied up to—it’s a headache. You got any good practices we can do to deal with derelict vessels? Thank you, sir. DOUCETTE: Absolutely. And I’ve come across that that conundrum and problem throughout the country. Even here in New York during Hurricane Sandy, we had a similar situation. A lot of the local laws on the books can be helpful about derelict property. And, again, it does get involved with the courts. And sometimes that can be sped up. But the biggest thing, if this vessel is in the water and it’s tied up, the biggest thing is we want to make sure that it’s not causing any type of environmental harm, you know, leaking oil or discharging. At the same time that it’s safe, that it’s being tied up, and that’s it’s being maintained and checked. Because in a way this sounds like this vessel—I don’t know the particular case of it—but it sounds like there’s no owner or operator. It was seized. And it was probably used for some nefarious activity. So it does become a conundrum on that part. The particular case I had here in New York that I worked with, it was a large vessel, about a 300-foot vessel, very similar with some owners that just did not have the wherewithal to follow through. And when Hurricane Sandy caused that vessel to wash up on a—almost on a—on a street in Staten Island, we were able to, because of the pollution threat, remove it and lift it. That actually, one of the same cranes that’s down there in Baltimore now, it’s one of the Donjon cranes, lifted it up. In that case, we put the—we put this ship up on land, where it could be scrapped and cut up into steel. But that took a lot of time working with the City of New York. And they used one of their abandoned property laws, similar to what you’re talking about with vehicles. We were able to use that as a way to get into the courts, and then have that vessel salvaged. And in the end, the city got a check back for like $75,000 for the worth of the steel from the scrap yard. But it is not always a successful solution, like, in that case. There’s a number of the cases that, you know, we’ve had to come in and, you know, clamshell or kind of dig the vessel out after it’s sank, in different situations. But I would definitely pursue the courts, and the property, and then the disposal method. And usually that’s going to involve hauling it up or putting it on land where it can be cut up. FASKIANOS: Thank you. I’m going to go next to a written question from Trustee Wayne Domke of Roselle Village in Illinois: Do you work with Homeland Security on immigration? And if so, how? DOUCETTE: Yes. So a number of times we’ll have encounters. One, the Coast Guard is part of Homeland Security, so we work with our cousin agencies on a day-to-day basis. So there’s some at the planning level, but if it’s a situation where we encounter a vessel, and it may be in the maritime in the offshore of the East Coast, if it’s a fishing vessel with either folks without documentation that are here—sometimes they’ll end up—as a job of last resort, they’ll end up as a fisherman. There are some rules in place that there’s a certain percentage—I think it’s 25/75—like 25 percent of the crew has to be a U.S. citizen if it’s a U.S. vessel, on these fishing vessels. And if they have documentation, it’ll be fine and they’ll just continue working. But a lot of times, we’ll find folks that just do not have the proper documentation. Then we’ll work with the other Homeland Security, Immigration, and other agencies to determine whether or not they have a desire to have these people be brought in and processed. And that can take some time. But to say that we may also encounter people on a regular recreational boat and law enforcement activity. Up in the Great Lakes, it wouldn’t be unusual for us to come across people doing human smuggling as well, just trying to enter our country via recreational boat, coming from Canada. They found some way to get to Canada, and they wanted to get to the United States. And we also see people going the other way, leaving the United States trying to go to Canada. And so we’ll work with both countries’ the immigration services to try to process the people, make sure that at least they’re documented and known to be present in either country. FASKIANOS: Thank you. I’m going to go next to Andrew Parks, who has raised his hand. You can accept the unmute and tell us who you are. Q: Can you hear me? FASKIANOS: We can. Q: Andrew Parks, director, Texas Senate Committee on Water, Agricultural and Rural Affairs. Thanks for taking the time to talk to us today. And I’ll echo the earlier sentiment, all of my interactions with the Coast Guard to date have been very professional. Really respect the guys you’ve got working for you. So all of my interactions with the Coast Guard up to this point have centered on disaster response. We’ve had several hurricanes in Texas over the last twenty years—Rita, Ike, Harvey, and others. Can you walk me through, first of all, how you plan for hurricanes and other natural disasters in abstract, and then in the—in the run-up to an actual hurricane, when you’ve got one off the coast, the kind of staging you do, the resources that you do, how you deploy them, et cetera? DOUCETTE: Absolutely. Every year we’ll—because the Coast Guard, we’re the military, we move our people around. So every year, prior to hurricane season, we’ll have a national exercise which tests our Coast Guard internal capacity to communicate up and down the chain of command, all the way back to Washington. And we also test our ability for the different captain report zones—the different—like, the Port of Houston or the Port of Miami—that they can set hurricane conditions. And what’s meant by that, is it’s a way that we communicate with the port authority and industry that we’re forty-eight hours, or ninety-six hours out from a hurricane. You know, if your vessel can get underway and avoid the hurricane, we want them out of the harbor. If they can’t get underway because they’re in the middle of some sort of repair or fixing the engine, then we’re going to have to—you have to double up lines. We want you to remove any type of debris that can be washed over shore. And so, we try to tighten up the port so it’s more resilient, given the nature—especially in the Gulf Coast, where you have these very large hurricanes. And then, going back to some of that planning that I mentioned before that we do with oil pollution, and we work with FEMA, this umbrella of plans that’s out there. Our National Contingency Plan, which deals with—you know, anyone can have a spill or hazmat release any day. That same skillset that we practice day in and day out with local, and state, and the commercial industry, we can use that during a hurricane. It’s the same people, we just fall under different plans, the National Response Framework. And that’s the FEMA plan, where all the different federal agencies line up. Like, the first thing in disaster would be transportation, get people out of there. So, the Department of Transportation takes the lead. But with Coast Guard, we’ll jump and do Department of Transportation support, because you can move a lot of people on cruise ships, you can move a lot of people on barges, or use our maritime highways to move folks. At Coast Guard, EPA, we’ll do ESF 10, which is hazard material and oil spills, a lot of times household hazardous waste, industrial wastes after a big hurricane, and ESF 9, search and rescue. So, again, we’re using a lot of skills that we use every day, but we are underneath this National Response Framework. And then the states, we work hand-in-glove with them with their emergency operations centers. But I think where the Coast Guard really adds a value is that we’re working with industry every day, inspecting their ships, inspecting their facilities. We know each other on a—we’re probably on our rolodex or on our cellphones, and we call each other when other events happen throughout the year. So, when the big event happens, like a big disaster, there’s a lot of commonalities where they would have been in the same committee meetings that I talked about before. And one other thing, just to add, we have another group. It’s not as well known. It’s more of an economic group. But they prioritize when the—when the harbors get back open, what ships have the priority to come back in. And industry gets together and works with us. And it may be that this particular industry, certain name, they’re low on gasoline. So, the first ship coming in is going to have to be gasoline. And so there’s a lot of work going on behind the scenes when we do get the port restored. And I’m sure that they’re doing that in Baltimore, too. What are the first—what’s the first vessel coming in and what’s the first vessel going out. And so there’s a lot of collaboration that helps prioritize—even though these industries may be competing with each other, when it comes to disaster we find that they all work hand-in-glove with each other, to try to take care of each other’s needs, even though they’re competitors. FASKIANOS: Great. Thank you. I’m going to go next to a written question from Paul Brierley, who is with the Arizona Department of Agriculture: My son serves in the Coast Guard as part of a deployable strike force created after 9/11. I describe some of the unexpected roles the Coast Guard plays as giving us a military presence where we aren’t allowed to have a military presence. Can you talk about some of the joint and support roles that the Coast Guard plays to our other military services? DOUCETTE: Absolutely. In fact, I was part of the deployable support forces. And we brought the team here from New York, CFR, down to visit the Atlantic strike team. Sounds like your son, and thank you for raising a great American servant, and it sounds like he might be with the MSRT, or one of the MSSTs, which are these—it’s probably one of our—the MSRT’s closest to what we have to special forces. They deploy around the world. They deal with piracy issues. They can deal with a vessel that’s been hijacked, just like an aircraft. They can do what they call an opposed boarding, and they can board these ships via helicopter or other means and neutralize any threat or risk that might be on that vessel and take the vessel back under control. Those teams, when they’re not doing actual operations to respond, they train other nations. You know, their SWAT teams, or their specialized force teams that exist. And, again you can take one from shore and try to put them out in the maritime, but there’s a lot of different skills that are involved, and the equipment that—oh, did we lock up? Oh there we go. But then the equipment that you carry, you have to have buoyancy too. If you end up in the water, it’s not the time to find out that you have too much gear weighing you down. So there’s special equipment or kit that that they train with and that they use during those operations. You mentioned about how we work with other countries. One of my jobs was out at U.S. Pacific Command. And I worked in Southeast Asia. And Vietnam has some—back a decade or so ago—had some really strict controls about foreign navies coming to their country. But when the Coast Guard would show up they’re, like, oh, you guys, you can come too. And you can even come back again, because the white ships, or even our C-130s are white with an orange stripe. So it doesn’t really give that warfighter impression to a lot of countries that may not allow the military to be present, or other agencies of our government present. They see the Coast Guard as a humanitarian organization. We’re lifesavers, and that’s—they resonate with that, and they invite us back. And that goes back to my statement about where most navies and other type of maritime forces in the world resemble a U.S. Coast Guard than an armed service that just is a warfighting machine. FASKIANOS: Great. Raised hand from John Jaszewski. If you could unmute yourself and identify yourself. We’re still waiting for unmute. I don’t know if there’s anything we can do on our end. Probably not. All right. Q: Can you hear me now? FASKIANOS: Oh, we can. It worked. Q: OK. I’m John Jaszewski, calling from Mason City, Iowa. I’m curious about flood control and mitigation. How does the Coast Guard interact, especially, you know, here in Iowa, we’re too far from the coast to be—you know, see much of Coast Guard. But I know you’re on the Mississippi. And what are things that you help local governments do to plan or mitigate the flood situations? DOUCETTE: Yeah. Thanks for the question. And we—I mentioned before these strike teams that we’re on. And a lot of the Coast Guard on the rivers too, they have deployable teams that can go up normally—to places normally where the Coast Guard would not be, but now it’s a flood environment. And you have folks trapped in homes, trapped up in attics. Sometimes that happens, people climbing to the higher levels to get out of a flood, but they get trapped in their attics. So, we can—with FEMA and with state agencies—they can request the mission assignment. And, in fact, there’s not too much bureaucracy involved. If there’s lives at hand, the Coast Guard’s going to get there, and work, and figure out how to get there and save people. But we’ll work, you know, hand-in-glove with your local sheriffs, your fire departments. And if they need, you know, flood response capacity, we have some deployable capacity. I mentioned before about hazardous materials. When I was on the Pacific Strike Team, Atlantic Strike Team, we would deploy teams to all sorts of landlocked states that had these floods. And the household hazardous waste would pile up wherever that kind of floods tsunami would end. And we would work with environmental arms to help recover all that material so it’s not sitting there seeping into the ground or the groundwater after the event. But, yeah, the Coast Guard does deploy. There’s a lot of places I’ve had my Coast Guard jacket on or coveralls and be up in the high mountains of Colorado helping with a wildfire or helping with other disasters. And people would never think that they would have saw the Coast Guard present there, but—and we also have these incident management assist teams. And they can help out during the disaster. They were there in Baltimore. But they can also help our before the disaster with incident command system training and other planning and exercises ahead of an event. FASKIANOS: I’m going to take the next question from Pam Wetherbee, city councilman from the city of Beacon, New York: What is the status of adding anchorages for barges on the Hudson River, and why is this needed? DOUCETTE: Yeah. I do know that there’s an effort underway, rulemaking. And I don’t have the particulars. So the captain of the port in New York will have the final details on anchorages. But from time to time, it’s—from my experience, whenever we determine anchorage locations it’s for safety, so that these barges—whether it’s the port of Boston or port San Francisco—it’s a place that’s designated where—whether it’s a fuel barge or it’s a gravel barge, a hopper barge that is there, we want industry to put them in a certain place that when they put the anchor down has the chain that goes to it, that barge will swing, around based on the winds or the current—in a river should be going in one direction but might not be as tidal up there like a harbor. But by defining that anchorage, what you don’t want is someone with their sailboat or recreational boat anchoring their boat, fish or go to sleep, and then, without having designated anchorage, that barge swings around and hits that vessel, from a safety standpoint. So having it designated, be on a chart, people would be—you’d be able to notify people or ask people to leave that area where the barge is anchored for safety or during some sort of construction operation, or other event. So that way the barges aren’t just being put anywhere. There’s a designated spot for them to be, that’s safe for the—for all people that use the waterway. And protects the ship channel. FASKIANOS: Great. I’m going next to Leslie Brosnan, who has a raised hand. Q: Yes. This is Leslie Brosnan. I’m Titus County clerk for Mount Pleasant, Texas. And with the power plants that have been shutting down in the last few years, does the Coast Guard work with the areas that have the lakes they will now need to be returned back to a natural state, on the EPA part of it? DOUCETTE: Yeah, so early in my career I had some—there were a lot of coal-fired plants. And as those were torn down, we would put a lot of safety or security—safety zones around them while they were imploding them and protected them. But when that site becomes, like, a remediation site or, like, a brownfield site, that will usually switch from the emergency response side of what the Coast Guard would do, and it’s more of a remediation. And our authorities are limited there. We would rely on the EPA. We would rely on the state environmental arm that’s dealing with that remediation work. But we do pay attention to those facilities that are in the maritime environment, especially the ones that do—that operate with vessels, foreign vessels, or any U.S. vessels. But there are a number of power plants that are now fed by pipelines, by LNG or direct fuel. And so then are—they’re not so much a regulated facility anymore, that the Coast Guard has authority over, per say, unless they have something that affects the waterway, like a spill or another event. FASKIANOS: I’m going to take the next written question from Councilmember Alan Mitchell, who’s in Greenville County, South Carolina: Thank you for your presentation today. Understanding that invasive species and waterways is a very important issue to tackle, does the U.S. Coast Guard ideally take the lead in identification and control? Or does Coast Guard take more of a cooperative support role? And what’s the best way for local government entities to support your efforts? DOUCETTE: Yeah. I would—I would describe our role in that as support, because we’re not setting the laws or the regulations about the species. But when it gets into an operational, like, we’re going to go out—like a task force, and we’re going to pursue—we want to be aware of it, and then we would publicize—help publicize that, and help make sure that the operators who are out there can do their work without being impeded by recreational boating traffic, or whatever it may be. And, again, the Coast Guard work would tend to be in the offshore maritime environment. Inland rivers or waterways, in a lake environment, we may not have a jurisdiction there, unless there’s some sort of vessels operated there. But again, our limitations would be the vessels that are carrying passengers for hire. You know, if it was a lake that bordered two states, or some like that. But one of the areas that we could certainly help is if you’re standing up teams, and it’s just—they’re going to be on boats, and you want to look at safety and what type of safety equipment—that’s a place that our Coast Guard Auxiliary, and I’m sure there are local Coast Guard stations, would be more than happy to help to make sure that your boat operators and the folks that you may be sending out in the field, that may be college students, that they have some awareness of the environment they’re going to operate in, so it’s safe for them to do the work that they have to do to tackle invasive species. FASKIANOS: Thank you. And I’ll take the next written question from Rob Cole, who’s in the Florida Keys, I believe: I’m curious to know what the staffing trend has been in the Florida Keys. We note, and are thankful for, what appears to be an appropriately increased level of support for open water surveillance and interdiction efforts. And are curious if nearshore routine safety missions involving recreational boaters and the like have experienced reduced coverage due to other resource redeployment or staffing reductions/unfilled vacancies. DOUCETTE: Yeah. So, the Florida region, just similar to the southwest border, but there’s a migration—we always, over the decades, have had maritime migration that happens from a number of the Caribbean islands. And so as those—the weather environment is suitable for people to transport to the United States via maritime means, we will surge staff from around the country. So when I was up in the Great Lakes, we would donate a lot of our resources, look for volunteers, but it was very common. I would send a pretty high percentage of our staff. And not just the Great Lakes. Throughout the country, we would send resources down to support the district in Florida, in the Florida Keys area. And these folks would be down there for a number of months to help support those operations. And then when the maritime migration would slow, we’d obviously bring those folks back. We are nationwide, like a number of the services. And encounter a period of time where—there used to be a time that 90 percent of people that joined the Coast Guard would just walk into the recruiting office, and we had a constant supply of Coast Guard personnel. We’re a small service. As I said, we’re 50,000 people. We recruit about 3,000 people a year. That doesn’t sound like a big number, but we—our people are ambidextrous, and they do a lot of different missions. So once we get them trained up with a four, five, or six year, to have that type of person lead the organization, most people in the Coast Guard, about 40 percent, stay in for twenty years. So when we start losing with retention, it does hurt us. We’re not used to—like I said, we recruit 3,000 people a year. The Department of Defense, big Army, big Navy, they recruit 3,000 people a day. And we just don’t have that type of throughput. So we are experiencing a challenging period right now. The way that we’re managing that is we have a number of seasonal stations. And that we may not open that seasonal station and put the staff there, but we’ll concentrate the staff at the main station nearby and provide the same amount of coverage by keeping the boats offshore patrolling that area. We may add additional cutter, larger ships, offshore, or helicopter patrols to make sure that we’re providing that same surveillance and mitigating any type of search and rescue or law enforcement event that may appear throughout the day. FASKIANOS: Great. Thank you. We are coming near the end of our time. So if you have final questions, please raise your hand or write your question. And I do have one: How does the Coast Guard coordinate with other federal and international agencies to stop illegal drug trafficking? DOUCETTE: Yeah. So actually not too far from our where our last questioner was is SOUTHCOM, and also at U.S. Pacific Command. And they have these joint interagency task forces. So there’s Joint Interagency Task Force South. And there’s an office within that command. And there’s probably seventy to 100 different agents and representatives, not just from the United States but from all the other countries. They’ll have other representatives, foreign representatives there. And they are from their version of the DEA or their customs agencies. And they work as a joint interagency team to address counternarcotics. And then the same thing goes out in the Pacific too. There’s a Pacific task force. So there’s Australian DEA agents that are right there in Hawaii working to help break down any type of bureaucracy between agencies. And one of the interesting facts that years ago our ships would go offshore, and they would do patrols, and maybe they would come across drug runners, and they’d have a big capture. But now, all our ships when they go offshore they’re informed by intelligence. We were tracking the information. And so we’re having large hauls of drugs and contraband. And if you added up all the drugs and contraband that’s seized by domestic law enforcement, the U.S. Coast Guard seizes is more of drugs and contraband at sea than all of the domestic agencies combined. FASKIANOS: I was curious, I think we touched upon this earlier, but if you could talk about the role that surveillance technology plays in U.S. Coast Guard missions? And also, how is the Coast Guard now thinking about and repositioning—and thinking about the use of artificial intelligence? DOUCETTE: So I’ve had the opportunity to be here at CFR and attend a number of artificial—so that’s where my thoughts have been this year, is how that can transform our service. So surveillance, to answer that question, the first part, satellite technology and being able to monitor offshore fishing in the Pacific, where maybe it takes weeks to get a vessel to, the fact that we can do that by satellite every day, or constant surveillance, or by having cameras or other radar arrays set up in different ports as ships come in and out to sell those catches of fish, or to take all the data and analyze that, again, AI’s ability to look at a mountain of data, whether it’s imagery, whether it’s sonar images, whether it’s audio—whatever that is out there that can be brought to the attention of the human, because the AI algorithm can be built to sift through and filter through that information to provide operators with better decision-making intelligence or information that this particular vessel may be operated in a shady way. And, again, sometimes we do this analysis by what fuel vessels consume, and what parts they’re not consuming, might give us indicators to investigate further. But I see AI being very instrumental, even in our bread-and-butter mission of search and rescue. You know, right now throughout the country there’s a young Coast Guard third-class petty officer, with a headset that looks like this, listening for that mayday call. And we’re still mandate to listen to mayday calls. Which is—and it’s through audio. And they’re listening to everyone talk in that Marine band radio. But if you had an AI device that could pick up: I’m in distress, I need help, or calling out for the Coast Guard. We do have some other technology where they just click their mic and we know where they’re at, and it takes the search out of rescue. But I can see where AI could get involved and, again, provide that information to the operator in a quicker way, and go through reams of photos and satellite images and make those vessels that we send offshore more effective in the missions that they’re pursuing. FASKIANOS: Fantastic. There’s a written question from Chris Cho, who’s a councilman in Closter, New Jersey: I just recently joined Flotilla 10-8, Bergen County, as an auxiliary member. I’m involved with an environmental group called Paddle World. It’s mainly a high school student volunteer group. Are there any programs with the U.S. Coast Guard that these high schoolers can donate their time doing volunteer work? And I thank you for your service. DOUCETTE: Yeah. Well, one, thank you for being part of the Coast Guard, part of the auxiliary. So, for everyone else on the line, we have a—similar to the Civil Air Patrol—but we have a volunteer force. And they’re almost just as big as the Coast Guard that we pay. And there’s a lot of works that we’re—like, safety, recreational boater safety, that we’re not funded for but it’s one of the missions we do. And the Coast Guard Auxiliary does that by visiting marinas, and when people buy their boats, to educate them on what life jackets and how to outfit their boat properly, how to—how to read a chart, and all that. So the auxiliary does a ton of work to help basically do preventative search and rescue, make sure that people don’t get into a situation offshore where there’s a problem. I forget the age, though, that people can join the auxiliary, but I have seen high school kids involved with the auxiliary. We also are starting—we were a little bit later than other services—but we have JROTC programs. And our goal is to have multiple JROTC programs in every district. There’s nine districts in the Coast Guard. And especially at inner city schools and other environments there. But that’s a way that we’re getting high school aged kids acclimated or aware of the Coast Guard mission. And I think you mentioned a paddle craft. So, again, that there’s been a growth in these paddle boards, kayaks, you know, other types of—that aren’t your traditional recreational boat, like, a motorboat, or a canoe, or a rowboat. Those things are regulated, and in some places they’re not regulated, and they’re not a requirement for people to wear life jackets. And I have pictures of people paddle boarding up in the Great Lakes and there’s a floe of ice next to them. And they fell in that water, they would not have a long survival time without either a wetsuit or a proper life jacket. So, again, the auxiliary can get out there. And the other message, to everyone that’s on the line, you may think that you’re too old, or it might be, to join the Coast Guard. Or you can join the auxiliary. You can be part of the Coast Guard. And it’s a lot of fun. And there’s—and if you’re into boating or the paddle craft, there’s an opportunity to get involved. So that’s a good point to bring up. FASKIANOS: I’m going to go— back to John Dizuki—Jaszewski. Excuse me. Q: Can you hear me now? FASKIANOS: Yes. Q: OK. I’m John Jaszewski, calling from Mason City, Iowa. Talk about recruitment. What kind of young men and women are you looking for? And what kind of requirements would they need to join the regular Coast Guard? DOUCETTE: Yeah. That’s a great question. Thanks for bringing it up. I tell you—you know, and I’m biased because I’ve been in Coast Guard thirty-five years, and I just wore my son into the Coast Guard last week. So it’s the high point of my career. And, you know, I would tell you that if you have access and know a lot of young, talented kids, whether they’re going to be high school graduates, they’re in college, and if they don’t know what they want to do, and they’re remotely interested in service to their country, environmental issues. I mean, we’ll take everyone. I think there’s—I think there’s a carve-out or there’s a mission in the Coast Guard, you can find something to do. And it maybe it’s—like, even with my son, it was let’s get in the Coast Guard. And maybe he’ll get exposed to cybersecurity, something that he wasn’t planning to do. But by joining the Coast Guard he’ll get a security clearance. That’s going to help him with other jobs—he’s going to join the reserves. And I joined the reserves when I was in college. And that’s how—and now I’ve been in for thirty-five years. But, again, I think it’s a great—if you’re an interested in law enforcement, you know, we’re a law enforcement agency. If you’re interested in environmental oil spill response, working with the EPA one day, there’s a lot of skills you will acquire with the Coast Guard. We have medical professionals. There are so many different ways that we’re bringing people into the Coast Guard. We have an electrician mate. So, we—and if someone’s already a qualified electrician, we’ll look at what credentials they have and say, you don’t need to go to our ten-week school, but maybe go to this week and this week, that gives you the marine portion of all the things you already know. And if someone has a medical background, we have medical professionals, and we’ll look at their credentials. And we’ll kind of—we’ll now custom to—this is very new. It wasn’t this way until recently. But—and they’ll even bring people in at advanced rate or rank based on their skills. So, if people were remotely interested, they should talk to recruiters. They should look at the Coast Guard website. I’m happy to take any calls any day for anyone that’s interested in joining the Coast Guard. And, again, you don’t have to do it for life, like me. You can just come in for a couple years and be in the reserves or be on active duty and call that good and move on with your life. But I joined the Coast Guard, you know, I was either going to be a state trooper or I was going to be in the Coast Guard. And now I’ve traveled to seventy countries, I’ve had twenty moves, lived all over the country. And it’s been a phenomenal career of opportunity. So, I would encourage anyone that wants to have an opportunity, look at the Coast Guard, consider the Coast Guard. FASKIANOS: Wonderful. We are at the end of our time. And I think that’s the perfect note on which to end. So, Captain Eric Doucette, thank you very much for your time today and for your service to our country. And, of course, we have really enjoyed having you at the Council this year. You have a few more months left before your fellowship comes to an end here. Thanks to all of you for your terrific questions. We will send out a link to this webinar recording and transcript. And you can learn more about CFR’s military fellows and browse their work by going to CFR.org and, as always, for other research and analysis on many issues and topics. Please also go to ForeignAffairs.com and ThinkGlobalHealth.org for other developments and analysis on international trends and how they’re affecting the United States. And, of course, do share your suggestions for future webinars by emailing [email protected]. So, again, thank you. And we hope you enjoy the rest of your day. END

Zongyuan Zoe Liu, the Maurice R. Greenberg fellow for China studies at CFR, discusses China’s sovereign wealth funds, investments in the United States, and considerations for policy responses to foreign land ownership trends in the United States. Elizabeth Blosser, vice president of government affairs at the American Land Title Association, discusses recent state legislation on the purchase of U.S. property by foreign entities and individuals. A question-and-answer session follow their opening remarks. TRANSCRIPT FASKIANOS: Welcome to the Council on Foreign Relations State and Local Officials Webinar. I’m Irina Faskianos, vice president for the National Program and Outreach here at CFR. CFR is an independent and nonpartisan membership organization, think tank, and publisher focused on U.S. foreign policy. CFR is also the publisher of Foreign Affairs magazine. As always, CFR takes no institutional positions on matters of policy. Through our State and Local Officials Initiative, CFR serves as a resource on international issues affecting the priorities and agendas of state and local governments by providing analysis on a wide range of policy topics. We appreciate your taking the time to join us today. As a reminder, this webinar is on the record, and the video and transcript will be posted on our website after the fact, at CFR.org. And we are delighted to have over four hundred state and elected officials registered, representing over forty-seven states and U.S. territories. We are pleased to have Elizabeth Blosser and Zongyuan Liu with us today. We’ve shared their bios with you, so I will just give you a few highlights. Elizabeth Blosser is vice president of government affairs for the American Land Title Association, ALTA, which oversees the association’s state legislative efforts including annually monitoring state bills related to the real estate, mortgage, and title industries. She also serves on the board of directors for the Property Records Industry Association. Ms. Blosser has worked for legislators on the federal, state, and local levels, and has extensive experience managing political grassroots and public relations campaigns. Zoe Liu is the Maurice R. Greenberg fellow for China studies at the Council on Foreign Relations. Her work focuses on international political economy, global financial markets, sovereign wealth funds, supply chains of critical minerals, development, finance, emerging markets, and more. Dr. Liu is the author of Can BRICS De-dollarize the Global Financial System?, published by Cambridge University Press, and Sovereign Funds: How the Communist Party of China Finances Its Global Ambitions, published by Harvard University Press. So thank you both for being with us today for this conversation on foreign asset ownership in the United States. Elizabeth, I thought we could begin with you, if you could give us a little background on specific policies regarding foreign land ownership in the United States up to now, and how could recent changes at the state level shape U.S. foreign policy going forward? BLOSSER: Yeah. Happy to talk about that. And want to say, we really appreciate the Council on Foreign Relations including us in this conversation. We especially appreciate it because we are not foreign policy experts. I have to admit I woke up this morning still a little bit surprised I was doing a webinar for CFR. But what we are experts on is the safe, certain, and legal transfer of real estate in this country, something that represents approximately 13 percent of GDP. So we think that’s very important. So there’s been a lot of conversations about foreign ownership of U.S. real estate. What we’ve tried to do over the course of the past year is really offer ourselves to legislators, regulators, and others who are looking to develop policy around this issue as subject matter experts. Notably, we don’t take a position on any of the legislation being considered in the space—again, because we’re not foreign policy experts. But, you know, whether you think these bills are good or bad, or right or wrong, there’s a lot of conversations happening around this. They’re going to continue. And so from our perspective, it is really important that whatever policy is developed and whatever laws are enacted, they fit within the current system of real estate transfer so that you don’t run into unintended consequences and you’re not adding risk for American real estate and landowners. If you think about it, besides a place to call home, real estate really represents one of the greatest generators of wealth in the country. So whenever you’re talking about shaping real estate policy, how you do that really matters. It matters to millions of everyday Americans. And so what we want to do is provide some subject matter expertise to make sure that there aren’t unintended consequences. And we think that can be accomplished by adding some procedures and protections within this legislation. And the good news is, there’s a lot of existing real estate law that can be leveraged for that purpose. So I’ll talk a little bit about some of the legislation we’ve seen. And it’s been extensive. So about a year ago all of a sudden we started seeing a lot of legislation pop up on this issue of foreign ownership of U.S. real estate. And to date, fourteen states have enacted legislation. Some states have enacted several bills. And this is—this is just last legislative session, so last year. And then most recently in Missouri, there was an executive order issued on this subject. Two states have enacted legislation for study committees on the topic. And as of right now, there are almost 150 active pieces of legislation in over thirty states moving on this topic. So it is a lot to track. As Irina said, we track all the legislation related to really real estate, title, and mortgage. And when you think about different topics, this one is just sort of off the charts in terms of the number of bills that are out there. Notably, there’s really no model legislation that has emerged in this space. But all the bills that have been introduced or enacted do two main things. One, they identify restricted parties. And, two, they identify impacted land or real estate. So in these bills, a restricted party could be a foreign government, it could be an entity, it could even be an individual. And the impacted properties could be anything from just agricultural land, to property that’s adjacent to or in a certain radius of critical infrastructure or military bases, or, in some cases, it could be all real estate within the state. So just to kind of give you an idea of the bills that passed last year, six dealt just with agricultural land, two with critical infrastructure, four with a combination of those two, and then eight touched on real property throughout the state, to some extent. So with these two elements, there are some challenges that come in with definitions. When you’re talking about these restricted parties, there’s not necessarily lists available to know who exactly is a restricted party. Some states have addressed this by pointing to federal lists, such as the Department of Commerce’s foreign adversary list, or the Department of State has a countries of particular concern list. But, you know, that has been a challenge. And you would think sort of definitions around real estate would be kind of straightforward, but unfortunately, that’s not as straightforward as you might think. For example, property that is considered ag land or farmland today can literally be a strip mall tomorrow. And conversely, property that’s not farmed today can be farmed in the future. And, you know, today we also have a lot of urban farming on land that is, you know, definitely not considered traditional agricultural land. Likewise, it’s really hard to figure out what properties are within a certain radius of critical infrastructure or military bases, even knowing where all of those places are. You kind of have to put together a map, and map that out, and survey. And, you know, there may be all sorts of reasons why you wouldn’t want to do that. So there’s definitely some definitional challenges as you look at this legislation to definitely be thinking about. Unfortunately, the more sort of focused and narrow the legislation is, the harder it is to sort of sort through some of these aspects. I mentioned unintended consequences. And I want to talk a little bit about what that might look like. And I will preface this by saying the majority of unintended consequences we think about from our perspective have to do with legislation that simply voids transactions. So rather than a divestment process of some sort, there’s legislation that says, you know, whether a transaction with a, you know, restricted party happens in the future, and in some cases in the past, that transaction is just simply void. Well, that creates some problems, because obviously, the local land records are going to show something different than that. So, you know, think about it from a consumer perspective. You have a seller who unknowingly sells property to a restricted party at some point. That transaction is considered void. Presumably, the property would revert back to the seller. So at that point, does the restricted party, you know, have reason to sue the seller for false enrichment, or others who were part of the transaction? From a business standpoint, liens that are on properties owned by restricted individuals that are, you know, transactions later considered void are unlikely to get paid. They’re not going to get paid. And those liens could be anything from a mortgage, to a mechanics or construction lien of some sort, or a tax lien—for all of those the local officials listening in today. And so, you know, that becomes a challenge, and that those liens are unlikely to be covered at that point. You know, if a transaction is voided, basically what a lienholder has is a note, but there’s no property to secure that interest anymore. From sort of an economic standpoint, transactions that are voided bring into question who owns the property. So, as I said, presumably the transaction’s voided, the property goes back to the seller, but the land records are going to show somebody else owns that property. And so there are serious questions about who has rights and responsibilities as it relates to that property. That kind of puts the property into limbo and creates clouds on title. That’s going to make that property unmarketable in some ways, really hard to transfer in the future. It certainly is going to impact the value of the property. So that’s obviously something to think about from a real estate standpoint and just an overall economic standpoint. And then, of course, I would be remiss if I didn’t mention that, you know, we are concerned about the liabilities some of these bills might cause for real estate professionals, whether you’re talking about a realtor, a lender, a title professional, or arguably even a county recorder. So those are some of the concerns that we have with legislation. I’ll talk about, just high-level, a few things that that we think can help address these concerns. I will say though, at the outset, I think we can expect a lot of changes going forward, right, in terms of what this policy looks like. This is a very new issue. As I said, there’s no—there’s no model that’s emerged. I think there’s going to be a lot of lessons learned as states look to implement this legislation. I think there’s probably been some lessons learned already. Notably, there has been litigation around some of this legislation. I assume there will be additional litigation that we will see. So that will impact things. Then you also have whatever’s going to happen at the congressional level. Certainly Congress is looking at this issue, and that might impact what states do in the future and what they’ve done in the past on this issue. So I think we can expect, you know, sort of changes and evolution in policy. And I think that that’s fine. I was talking to someone at the Uniform Law Commission recently about, you know, their process for updating model legislation or uniform legislation that’s been enacted in many states. And, you know, they do take a look after a set number of years at, you know, what’s happened, what new information has emerged. And they go back to legislators and ask them to make changes as necessary. And so we might see that happen. So there’s three main pieces we think about in terms of strengthening the policy around domestic real estate aspects. First, we think there needs to be an established enforcement authority within the legislation. There needs to be somebody within state government who has responsibility for enforcing the legislation. In many cases, that’s the state attorney general’s office. Sometimes it’s another agency within the state, depending on the type of real estate that’s been impacted. Second, we think there needs to be divestment processes built into the legislation versus just voiding transactions that have happened in the past, or may happen in the future. And that divestment process can really follow whatever is established in the state. It could be judicial foreclosure. It could be partition or receivership. Most state laws allow a restricted party a certain amount of time to divest themselves of the property. And if that doesn’t occur then there’s forced divestment after that period of time, hopefully using, again, established real estate transaction processes. And what that’s going to do is make sure that lienholders are paid, that the local land records are updated, and all that information is correct. And then finally, we really think it’s important for some protections to be built in. They need to be built in for the seller or previous owners of the property. They also need to be built in for future owners, so that, you know, the fact that the property was at one point an impacted property owned by a restricted individual should not impact somebody’s property rights down the road, a future owner of that property. I think there needs to be protections for lienholders and then also protections for real estate professionals. So that’s kind of a high-level overview. And I’m happy to take questions and dive into some of these issues in more detail. FASKIANOS: Fantastic. And, Zoe, let’s go to you to talk about the trends in Chinese global investments, and how the purchase of land and other assets in the United States has changed over the years. LIU: Yeah, sure. Thank you, Irina, for inviting me to do this. It’s truly a pleasure to, and I’m always happy to work with our state and the local legislators. So, you know, what Elizabeth just to described from a high level, in particular a lot of these reasons—the legislative changes or updates with regard to land, including farmland and real estate investment, or property in general—a lot of these really happened, I would say, starting from the past year, in particular. There was this one particular transaction. If I remember correctly, it was this Chinese company called Fufeng Group. Its U.S. subsidiary made an investment—or, purchased about three hundred acres of land in North Dakota. And the piece of land that this Chinese company purchased happened to be about twelve miles from the Grand Forks Air Force Base. So basically, it’s about a ten minutes’ drive by car. So I think it matters in the sense that first—from two perspectives. The first piece is, it’s important to understand who is the foreign investor which could become the asset owner of a particular piece of U.S. asset. And then, secondly, it also matters in terms of both national security perspective as well as in cases—in particular, in cases where CFIUS—which is the federal level panel of government agencies that review the national security implications of foreign investment in the United States—in cases where CFIUS do not necessarily have jurisdiction, then perhaps local legislators and state legislators can actually step in and fill the gap. So I wanted to just sort of first talk about, you know, who—why the individuals matter. You know, in this particular case that I talked about, the Fufeng Group, it’s a private company. And it’s, you know, based in China. But the reason why this triggered a national security concern is not necessarily because of the state ownership, but because this investment is related to a piece of the Grand Forks Air Force Base, which is reportedly to be home to a U.S. top secret drone technology base. So from that perspective, is there is this inherent—despite that this is a private Chinese company, the nature of the investment, in the sense that it’s—the location is in the proximity to a top-secret military base, makes this—from a national security perspective, triggered concerns. But in this particular case, CFIUS really did not have the jurisdiction in terms of rejecting the investment. Therefore, the investment could have moved forward. But what ended up happening, or obstructed the investment, was that actually local officials also reacted and took matters on their own hand. In particular, the city council sort of stepped in and say that, well, you know, despite that perhaps the city council may not necessarily directly have the authority to revoke the transactions, or so on so forth, there are other ways that the city council can actually do, such as the granting permit, or developing infrastructure, and so on, so forth. So there is this kind of disconnection—or, in other ways, it’s not necessarily, like, disconnection in the sense of what national security might—what national security concerns might mean for the local legislators, right? So the Fufeng Group—the Fufeng investment was a private company. And then that does not necessarily mean that all Chinese investment in the United States or all Chinese asset owners in the United States are, you know, not state-owned. In fact, there have been a lot of state-led investment from China in the United States. And a particular group of investors would it be the state-owned institutional investors, such as China’s sovereign funds. The most influential one would it be this group called China Investment Corporation, which is now the world’s second-largest sovereign wealth fund. And the size, as of the end of last year, the total assets under management of this state-owned institutional investor, China Investment Corporation, or CIC, was more than $1.1 trillion. In other words, the size of the asset under management by the state-owned investor is bigger than the GDP of Saudi Arabia. So from that perspective, you know, if you look at how these companies—how China’s state-owned institutional investors invest in U.S. assets, they will invest in not just in real estate. They also invest in startup companies in companies that have critical pieces of technologies that are to the interest of the Chinese government. So from that perspective, you know, not we—from local governments—from local legislators’ perspective, you need to know what—you need to know not just national security concern at that very high level, but you also need to know who is the investor or who are the potential asset owners. And then from that perspective, the inherent debate, perhaps, many legislators, especially at the local level, you are facing, is the promised job delivered by foreign investment versus the national security concern, because, you know, obviously, coming with foreign direct investment, there will be job created, there will be infrastructure being upgraded, and so on, so forth. So if the investment were to be blocked for national security concerns, then that also perhaps means the jobs were not necessarily going to be generated. Therefore, it perhaps would work if there were the so-called white-knight leaders that could have potentially step up when there is undesired foreign investor try to secure a piece of strategic asset, viewed as strategic from either federal or local perspective, and as a counterbalance, try to sort of defend against undesired foreign direct investment—foreign investors. And then finally, if I can just conclude by quickly saying that, you know, despite there is this whole panel of CFIUS review at the federal government level, again, I wanted to emphasize that CFIUS do not always have jurisdiction over every single piece of investment. And on top of that, could have foreigners, foreign investors, try to bypass the CFIUS review process? There are ways that foreigners could potentially do that. And one way to do that is to set up joint ventures by partnering with a U.S.-based company or U.S.-based institutional investor, so that the joint venture from a review—from a regulator’s perspective, this investment is made by a domestic entity rather than a foreign entity, despite the source of money comes from foreign investors. So, this—again, this ultimately relies upon deeper scrutiny from actual—the recipient of the investor, whether it is a local company or it’s a local government—it’s a local land managed or owned by a local legislator. So know your investor, and know the source—ultimate a source of money actually matters a lot, too. I will just stop there. And happy to answer any questions. FASKIANOS: Thank you both. Now, we’re going to go to all of you for your questions. And we also encourage you to share your experiences as well, because this is a forum for you to exchange your ideas. So with that, of course, we are on the record. (Gives queuing instructions.) So let’s go first—we have a raised hand from Mayor Mark Allen. Q: Hello. This is Mark Allen. Can you hear me OK? FASKIANOS: Yes. Q: OK. Thank you very much for having me today, for your discussion. Just wanted to chime in a little bit on foreign ownership within America. My state rep—she’s a state senator, Donna Campbell. I know she introduced some legislation during the most recent legislative session in Texas to prohibit foreign ownership of land in Texas. I’m not sure if her bill did ultimately get approved and voted on. But, you know, I do have a little bit of concern about that. We do have, you know, two projects going on in my city, which is a little bit east and northeast of San Antonio. And we have an existing factory that—it’s called Aisin AW. And they build transmissions for Toyota. And so they do have a Toyota factory that builds Toyota Tundra trucks down in San Antonio. And so what they do there is they build the transmissions there in our site, in Cibolo, and they, you know, put them in trucks and bring them on down there. But we do have another prospect. And they’re from South Korea. And they’ll be making electrolytes for Tesla. And so we’re—we still haven’t finalized the deal, so I can’t name the company. But we are, you know, a little bit concerned if there is, you know, like, a restriction on ownership of the land. Because I know that Aisin AW, it’s a company based out of Japan. And they did buy land in our city, in Cibolo, and then annexed into our city. And I’m assuming that the—our South Korean partners would be interested in doing the same. And so if this legislation does happen to go through in Texas, I just wanted to know if there’s any federal laws that would potentially trump that law that Donna Campbell, you know, put forth, or if there’s any compromise that could be made where the landowner, which could be an American, they could rent to the—to the foreign company. So that seems to me like a win-win, because the landowner would have a nice tenant there, with I’m sure they’ll make a pretty good amount of money on the rental situation even if it’s a long-term, you know, twenty, forty, maybe even sixty-year contract. So, just wanted to get your opinions on if there’s anything on the federal level that might trump what Donna Campbell is trying to do there in Texas. FASKIANOS: Who wants to—Elizabeth, do you want to go? BLOSSER: Yeah, I’ll jump in and just share that Texas is not on our list of states that enacted any legislation last year. So I know there’s been a lot of conversations at the state legislature there. I anticipate there will be additional conversations. You know, in terms of things happening at the federal level, whether it be legislatively or existing law, I think there are some good questions. There’s certainly a lot of questions that have been raised over fair housing. That would be less of sort of this business type of transaction, but more, you know, restricted parties being individuals and impact on residential real estate. I think a lot of these questions are going to be considered by courts and decided in the courts. And so I would—I would not even hazard to guess how that’s going to go. But there will be some impact there. In terms of the leasing question, I would just—like, some of these bills do include language regarding leasing. So I would take a look at that. And again, you know, in terms of who’s a restricted entity and what’s impacted property, it’s been a really wide variety of, you know, restricted parties. So it could be just government—foreign governments, right? And then they could be specifically laid out. Or it could be just certain types of foreign entities. So there’s a wide variety of impacted both property and restricted parties. So, you know, it’s kind of hard to say, but, you know, certainly we’ve heard too about, you know, the pending projects and other things. And I think Zoe did a really good job laying out sort of that balance on that point. LIU: If I can just quickly chime in here. I personally do not think that there would be any federal political willingness to—a political willingness to stop or obstruct this type of—at least from CFIUS perspective—this kind of investment, I mean, would not—would not be—would not be under the same type of national security review process, because neither Korea nor Japan are treated the same way as China, because they are U.S. allies. And then on top of that, one beneficiary—one beneficial factor would be the Inflation Reduction Act, which is very much in favor of localizing or near-shore and friend-shore and onshore a lot of the manufacturing product, and in terms of facilitating the renewable transitions. So from that perspective, I do not think there will be any federal obstruction in terms of making the—obstructing the investment. But there is the FIRRMA, the Foreign Investment Risk Review Modernization Act of 2018. So, FIRRMA expanded the scope and the reach of CFIUS. It include—sort of, it has the authority over certain transactions, including undeveloped land in proximity to facilities that are considered as sensitive for national security concerns or connected to critical infrastructure, critical technology, and so on, so forth. So from that perspective, unless the specific investment made by Toyota or the Korean company has any kind of that problem, I do not think existing legislator or the new legislature would potentially trigger any kind of obstruction. But, you know, Elizabeth can correct me if my interpretation of the legislation is wrong there. Q: Yeah, thank you very much for your answer there. We do have an Air Force base in the area, Randolph Air Force Base. And so it is within ten miles, for sure. So that could be a bit of a concern. But I think with them being friendly nations that we should be OK. LIU: Right. But the CFIUS did, I think, last year, right after the Chinese company investment—Chinese food company investment case, CFIUS did add a couple more U.S. Air Force—just U.S. military bases on sensitive—on the sensitive list. So you might want to check if your military bases is on that list. Q: Thank you very much. BLOSSER: I’ll just also throw out there, because I don’t think it’s been shared yet, but generally the countries that are listed in the state legislation that’s been introduced or enacted are China, Russia, North Korea, Iran, Cuba, Venezuela, Syria. That’s kind of—pretty close to comprehensive list. So those are—those are the countries that usually are referenced in the legislation. FASKIANOS: Thank you. I’m going to go next question from Justin Bielinski, who is the director of communications in the office of Wisconsin Senator Chris Larson: What is the best source of data to find out what level of foreign asset ownership exists at the state and local levels, and to compare how your state, community stacks up against other U.S. jurisdictions? Elizabeth, do you have that—those sources? BLOSSER: That is a great question. And I don’t think that there are necessarily great sources for that data. As I mentioned, Mississippi and South Dakota passed legislation to do a study on these types of things. It’ll be interesting to see what data comes out. I don’t—you know, I don’t think it will be possible to go into a state and try and look at all the land records and figure out things like beneficial ownership and the, you know, status of individuals who own various property. Maybe you can take a segment and study that and get that information. So, you know, I have seen some studies come out. I know the National Association of Realtors puts out some information annually on this topic. And I’m not exactly sure how that information is gathered. From a title perspective, we certainly do not gather or retain that type of information. And then, of course, it’s strictly prohibited and illegal for us to ask about country of origin, or political affiliation, or things of that nature in a real estate transaction. I don’t know, Zoe, if you have other data sources. LIU: I was going to mention the National Association of Realtors, their annual report. They basically talk about, you know, to what the level of the transaction—what are the levels of transaction, whether they are—you know, what type of investment, whether they invest in—or, they purchase in existing homes or new homes, or to what extent the transaction is made by cash. And if all transactions are made by cash, then there are kind of further financial security, or safety, or legal implications. And then in terms of farmland investment, I think USDA—the Department of Agriculture, USDA, the Department of Agriculture does have this farm service agency. They put out an annual report on foreign ownership and foreign investment in U.S. agricultural land. So they would show, like, which countries are the largest share of—which country owns the largest share of U.S. agricultural land, and how much. So that would be another source. In terms of—in terms of just the generic foreign investment at the federal level, and to what extent it triggers a CFIUS review, CFIUS does have annual report. I think they have done the 2023 press release. But I don’t think the 2023, like, statistics is out yet. But CFIUS do have annual report. But I would—in general, I would agree with Elizabeth that there is really a lack of comprehensive data sources that allows for just a direct oversee who owns what and in what types of asset. Then if you—if you broaden the definition of—which, if we just take a holistic view of foreign asset ownership in the United States, then this asset can include financial assets, that include U.S. Treasurys, corporate securities, or any other types of financial investment. And for those type of data at the federal level, especially for U.S. Treasurys ownership, the Treasury Department published numbers on that, and then the Federal Reserve also have comprehensive data in terms of who—what types of foreign investors owns what type of U.S. financial assets. FASKIANOS: Thank you. I’m going to take the next question from Mayor William Lewis of Havelock, North Carolina, with a raised hand. Q: All right. Can you hear me good? Can you—OK. FASKIANOS: Yes. Q: Cool. Yeah, Will Louis, down here in eastern North Carolina. We have Marine Corps Air Station Cherry Point. And one thing you guys have not mentioned that we’ve seen a little bit of a trend on, particularly around our training ranges where there are some really, really large properties that are available, is this digitizing property rights. Where they’re selling—where we have one organization that is an American organization that is using foreign money to digitally purchase properties, and then sell NFTs based on those properties. And I don’t know—I haven’t—in all the things I’ve heard about CFIUS, and doing research on that, that’s a different level of scrutiny. And, you know, that can be changed so fast at any given time that you don’t even know who does own a property. And being able to protect those pieces around the range. Have you guys heard anything about that, or have any insight on what levels of scrutiny that may require in the future? And just for reference, we have a project right now that in the next month may get sold that way, that is literally right next to our ranges. And if you present the company to CFIUS for review, they’re an American company that just sells the digitized pieces of the property. So a whole different level of concern. BLOSSER: We could probably do a whole conversation on NFTs and real estate, and what that looks like. You know, this is an issue the Uniform Law Commission is looking at, and others. You know, my understanding of the process is basically you have an LLC that owns properties, and then really you’re transferring the LLC versus the property. And so that brings up lots of questions about local land records. And so it’s a big—it’s a big conversation. I will say, as somebody who’s a board member for the Property Records Industry Association, you know, the way that we do land records in this country is very unique. And it is very local, where those records are kept at, generally, the county level, local government level. You know, to protect people’s property rights, they record on the local land records, and that provides constructive notice. And really, that’s been the backbone of property ownership in this country for hundreds of years. And, you know, is it a perfect process? No, absolutely not. Is it arguably the best process out there today? Yeah. So I think when you start talking about NFTs and that piece, there’s a lot of issues that get pulled into that. But that’s a really interesting perspective. And, frankly, something I’m going to do some more research on, and educate myself more on. LIU: I really do not have too much to add here to the conversation, you know, besides what Elizabeth just mentioned. But one thing that struck me was a lot of the—a lot of the transactions could potentially be made by cryptocurrency, not just for—obviously, not just for NFTs, but also for the transaction of a particular real house. Like, you know, they—in the transaction, the property owner would just say that she or he would be happy to take cryptocurrencies. And that—for me, that is something very interesting, because it has direct implications for tax payment and a lot of things like that. So far, I mean, I’ve never made a transaction using cryptocurrency and I really do not know what are the implications for taxation. So perhaps, you know, for Mayor Lewis’s office, you need to, you know, take the entrepreneurship and pioneer work to help us understand it better. FASKIANOS: Thank you. I’m going to take the next question from representative Aundré Bumgardner, who is Connecticut house assistant majority leader: Maine stands out among U.S. states for its high percentage of foreign-owned land. Why is this the case? Elizabeth, you want to? BLOSSER: I don’t know that I have a good answer to that one. I don’t know what the—what would necessarily be a driver of that. LIU: If I can—if I can quickly chime in here, just very briefly. I mean, I did—I’ve done research in food security. And as far—if I understand this correctly—and please do correct me if I’m wrong—if I understand it correctly, that a lot of the foreign-owned land again in Maine, a lot of this is related to farmland, and a lot of this is related to concerns with regard to food security. And there are—it’s probably worth looking into who are the owners of land in Maine. My guess is that, given that China, just in the grand scheme of foreign-owned U.S. agricultural land, China’s ownership is less than 1 percent. So probably, China’s ownership and may be minimal, whereas countries like Canada looms large in the—in the totality of the picture, and the geographic proximity perhaps makes sense, both from food security perspective, as well as invest just for the resource such as timber. FASKIANOS: Thank you. And he had a follow-up question: Why do we see more foreign ownership of U.S. agricultural lands than we do from Black, indigenous, or Latino farmers combined? How does U.S. policy through the farm bill shape this phenomenon? And again, I don’t know if you study this, Elizabeth, or you’ve been following this. BLOSSER: Yeah. You know, again, sort of data on some of this stuff is limited to get a big picture. A lot of times, state-by-state, people have a good view on this. I do think, going back to kind of discussions in Congress, there are a lot of conversations about this issue, specifically as it relates to agriculture. You know, I would not be surprised to see legislative language make itself—and, you know, its way into to the farm bill, especially given that the Government Accountability Office, the GAO, recently released a report just within the last couple of weeks kind of talking about concerns about communication breakdown between the USDA and CFIUS. So, you know, I could—I could see some policy on the federal level come down through the through the farm bill. You also might see something come through the National Defense Authorization Act, the NDAA. LIU: Elizabeth, you just reminded me in terms of the legislation, restrictions in terms of foreign ownership of U.S. land. Like, not all state has legislative restrictions against foreign ownership, which is—which reminds me of the earlier question with regard to Maine. If I remember it correctly, I don’t think Maine has foreign—has restrictions against the foreign ownership. But it—although it did have procedures to say, if it’s a foreign investor, if a foreign owner, you have to report it. But there is no restrictions. But, you know, a lot of these legislative changes over the past year would mean that, you know, perhaps more state would enact additional foreign ownership restriction laws, or even become more restrictive. But just a thought. FASKIANOS: Thank you. In the Q&A there’s some resources. Evan Meyer has shared an article that you might want to take a look at. And Zamora Gaston, legislative assistant for Representative Marcus Evans from Chicago, Illinois, is—responds to Justin’s question: In Illinois, certain foreign persons have to disclose their agricultural land holdings to the Illinois Department of Agriculture. And there is a bill that has been proposed during this session that will require the Illinois Commission on Government Forecasting and Accountability to provide to the legislature a report that details noncitizen purchases of real estate, and percentage of noncitizen-owned real estate, and offers recommendations to make it easier for citizens to purchase real estate. So that might be legislation that other states might want to look into raising, passing. There is a written question from Joshua Ward—Councilman Joshua Ward from Pemberton Township in New Jersey: Being that we live right next to McGuire Air Force Base and we have farmland that is owned by foreign entities, it raises concern for my local citizens about this. Is there a way local municipalities can ask for assistance in investigating concerns? BLOSSER: You know, I think those are conversations to have with your state elected officials in terms of, you know, what policy is coming down the road. But sort of the last conversation reminds me to say that, you know, sort of restrictions, especially as it relates to ag land, aren’t necessarily new. We saw a whole slew of bills get passed last year but, you know, there’s bills—or, legislation that’s been on the books, you know, back to the ’80s, and before, regarding reporting or review of certain transactions by, you know, a state’s department of agriculture, or others. So I would also check to see sort of what maybe some of the requirements in your state currently are. FASKIANOS: So I’m going to ask a question. How do you balance legitimate national security concerns with legislation that might discriminate against individuals of certain national origins? LIU: I guess it’s really hard, because it seems to me that a lot of these national security concerns, so it’s specifically directed against undesired investors, that are either U.S. rivals or U.S. competitors, or entities that are—entities or individuals that are under U.S. sanctions. So it’s very easy for the—for investors—for the investment process, meaning the law firms and the companies that are the recipient of the investment, to be—to self-select themselves outside of the investment process. So from that perspective, I do not—I really do not have a good answer, Irina. FASKIANOS: OK. Let’s go next to—oh, Zamora Gaston has a raised hand. So follow up. Q: I was wondering—Zoe touched on this earlier—about investments from foreign nationalities and startup companies, or businesses in general. I was wondering if there was any congressional oversight or what state-led legislation that you would suggest we look into. LIU: Thank you for the question, Zamora. Right now, there are there are—there are I don’t know how many bills in Congress that are specifically targeting China. But the direct, most relevant piece of a process would be the CFIUS national security concern review process. And in order for the review process to be triggered, the—it has to either satisfy national—it has to satisfy a certain percentage of investment, and in a particular company. And that particular company would also be of strategic relevance, or in an industry that are relevant for national security. Now, in the current political scenario, everything can potentially be national security concerns. So, I would anticipate a lot of additional, more stringent CFIUS reviewing processes against Chinese investment, specifically state-led investment, coming up. In terms of how local legislators can respond to this, I mean, this is really—this is really a calculation that local legislators you need—you would have to have the conversation among yourself, and with your—with your own constituencies. Because, again, who are the investors matters, and to what extent these investors, whether they are Chinese, they are Russian, they are from the Middle East or elsewhere—to what extent they have state connections. The point here—the reason I wanted to make this point is because not all investment—not all, you know, foreign investment in the United States from U.S. competing countries are state-owned entities. And there are private company that really just want to invest for business purposes, right? But the over-securitization of investment make things very difficult. Therefore, you would really have to have a serious conversation in terms of what are the—what are the priorities? Do you think the job being created, the tax revenue being generated, is—basically, the benefit, like, outweighs the potential risk? And if you do think—you do value the benefit, then what are the countermeasures that you can compartmentalize the national security risk? In other words, you take the investment but how are you going to safeguard the national security concern that, you know, CFIUS or other people who are opposing the investment might raise? You know, part of this could be through, like, a contract. You can have specific, concrete terms by saying that, you know, there should not be forced technology transfer, and so on so forth. So this is really a conversation that you would have to have with your own constituencies and figure out is the national security concern a real concern, and then do you have the countermeasures that can balance out the potential national security threat. Q: Thank you so much. FASKIANOS: Thank you. Zoe, to build on that—let me see. Wait. We might have—Vice Mayor Ted Bui from Fountain Valley, California has a question: Foreign entities that are here on an EB-5 visa, are they a concern as well? And, second, are we only concerned with entities that are here from China, or are there other countries as well, like Vietnam? LUI: I can chime in on this, and Elizabeth can correct me and enrich the conversation. So on the EB-5 visas, this is interesting, because with EB-5 visas you really apply to business and business individuals and in the context of China in particular these are usually rich individuals who are—who want to eventually migrate to the United States. So from that perspective, as long as—you know, as long as you have a clean understanding of this person’s source of money, and the connection, and the company’s capital structure—meaning to what extent—again, it’s know your investor and know the business person. As long as you have a clear understanding of the ultimate source of money, there is a high chance—there is a high chance that a lot of these projects coming from a private individual may be from somebody who wanted to, you know, eventually migrate to the United States. Therefore, the national security concern would be not as severe as a state-owned enterprise investment. And then, I would say that not just China. Right now the reason why China becomes a national—Chinese investment become a national security concern was because a lot of the—a lot of the demonstrated patterns by—at least, viewing from Western investor—Western policymakers and Western companies perspective—China tend to have strategic motivation, or their investment is not necessarily just for pure financial returns. And the Chinese—the strategic nature of Chinese investment also not only apply to U.S. companies, but also to their investment in other companies—in companies in other countries as well. One good example, would be 2015 Chinese company’s investment in a German robotic company called KUKA. And this Chinese company, again, it’s private. It’s called Midea. It’s basically a Chinese appliance maker. It has—it does not make anything advanced, like, you know, weapons or anything. No, it just, like, make refrigerators, or toasters, or coffee machines. But this company is very interested in making itself a pioneer in smart home appliances, like smart appliances. Now, whenever—now, when everything touched upon the issue about “smart” or “chips,” now it started to touch upon a series of other things. Like, you know, do you want your coffee machines to start spying on you? Things like that. But I’m not saying that, you know, the Chinese appliance makers are doing that. But those are the kind of concerns in countries like the United States and—or Western companies. And when you—when a Chinese company, even a private company investing in a robotic—in a piece of company that are strategically—yes, it is very much of the German industry’s strategic concern. The reason why the process could go forward, could go through, was primarily for two reasons. First, in Germany there was no other competing bidders willing to offer a counter bid. And then, secondly, at that time, Germany did not really have a robust investment screening process. But from the U.S. perspective, we really did. We have a robust review process. And oftentimes, we can mobilize our private investors to sort of offer a counterargument. Now, not just to China. There are other countries like Russia, as Elizabeth mentioned earlier, from other countries that are considered as U.S. rivals. But I’m not exactly sure about Vietnam, because Vietnam is very much a beneficiary from a lot of this supply chain diversification. BLOSSER: Yeah, I’ll chime in. Again, you know, we don’t really comment on the foreign policy, you know, who should and shouldn’t be included in these bills, what—and, you know, impacted property should or shouldn’t be included in in the bills. But this kind of goes back to what I said earlier about definitions matter in this legislation. Like, how do you draft definitions that are somewhat evergreen, right? You’re putting this into law. That really gets to what you’re trying to accomplish on a foreign policy front, whether that be around the restrictive parties or the impacted properties. And that is difficult. I don’t think there are great answers to that. Like I said, you know, some states have, you know, referenced the federal lists, which sort of narrows it down and allows you to deal with sort of changes over time. In terms of Vietnam, I don’t recall off the top of my head them being listed in any of the bills that I’ve seen. FASKIANOS: Wonderful. Well, we are at the end of our time. Thank you very much to both of you for doing this—Elizabeth Blosser and Zoe Liu. We appreciate it. And to all of you, for your questions and comments. We will send out the link to the webinar recording and transcript, as well as other resources. You can follow Elizabeth on X at @EABlosser, or you can also follow the American Land Title Association at @ALTAonline and Zoe at @ZongyuanZoeLiu. Zoe is also a contributor to CFR blog Asia Unbound. So you can sign up for that if you wish to receive notifications for that at CFR.org. And, as always, we encourage you to visit CFR.org, ForeignAffairs.com, and ThinkGlobalHealth.org for the latest developments and analysis on international trends and how they’re affecting the United States. And we also encourage you to share your suggestions for future webinars by emailing us to [email protected]. So, again, thank you all for joining us today. We appreciate it. (END)

Jess Maurer, executive director of the Maine Council of Aging, discusses demographic trends in Maine and the work of her organization. Jennifer Sciubba, global fellow at the Woodrow Wilson International Center for Scholars, discusses demographic trends and the implications of an aging population at home and abroad. A question-and-answer session follows their opening remarks.  TRANSCRIPT FASKIANOS: Thank you. Welcome to the Council on Foreign Relations State and Local Officials Webinar Series. I’m Irina Faskianos, vice president for the National Program and Outreach here at CFR. CFR is an independent and nonpartisan membership organization, think tank, and publisher focused on U.S. foreign policy. CFR is also the publisher of Foreign Affairs magazine. And CFR takes no institutional positions on matters of policy. Through our State and Local Officials Initiative, CFR serves as a resource on international issues affecting the priorities and agendas of state and local governments by providing analysis on a wide range of policy topics. Thank you all for being with us today for this discussion. The webinar is on the record. We will circulate the video and transcript and post it on our website after the fact at CFR.org. We are pleased to have with us today Jess Maurer and Jennifer Sciubba to talk about demographic trends. We’ve shared their bios with you, but I’ll give you a few highlights. Dr. Jennifer Sciubba is a global fellow at the Woodrow Wilson Center. She’s an expert on demographic trends and their implications for politics, economics, and social relationships. Previously, she worked for the Hess Center for New Frontiers at the Center for Strategic and International Studies and was a tenured professor at Rhodes College. Dr. Sciubba is the author of 8 Billion and Counting: How Sex, Death, and Migration Shape our World. Jess Mauer is the executive director of the Maine Council on Aging, which she co-founded in 2012. The Maine Council on Aging consists of over 135 organizations, businesses, municipalities, and community members. Its recent achievements include increased pay for direct care workers and increased eligibility for the Medicare Savings Program in Maine. And Ms. Mauer previously worked in the Maine office of the attorney general for nearly two decades. So thank you both for being with us. Jennifer, I thought we could begin with you to give an overview of the global demographic trends you’re seeing and their political, social, and societal, and economic implications. SCIUBBA: Absolutely. Glad to do so. And I have just a few slides to show and tell a little story, if we can pull those up. Perfect. Let’s go to the next one, but it might even—that one might be blank, and it might be the one after that. Perfect. Let’s start there. So pop back one to the star. So let’s think about that.  I love this, the idea of the night sky as a metaphor for understanding global population. Because I remember learning—I had to take one science class in college as an International Studies major. And that one science class was astronomy. And I was so fascinated in learning that when we look at those stars in the night sky, some of them are so far away from us that they don’t even exist anymore by the time their light reaches us here on Earth. And when I think about where we are in this moment of global population trends, I think it’s a lot like that night sky.  In parts of the globe, the human population is already or will soon be shrinking. And that’s really different from what we hear all the time. We hit eight billion globally in November. And Irina mentioned, that’s the title of my most recent book. And we know that we are continuing to see global population grow. But what I don’t think everyone grasps is that while those overall numbers are increasing, there’s a tectonic force underneath that is leading us towards shrinking. It’s kind of like looking at a star that seems to be shining brightly, but in actuality it’s already imploded. And so to understand where we are today in terms of global population, and where we’re going, I want to explain first how we got here. And what I hope you’ll take away from this few minutes that I have to speak with you is thinking about the night sky as representative of our soon-to-be shrinking population is that it is a trap in data analysis. And so I’m actually going to talk about two traps and data analysis and how they relate to demographics, that I think can help us understand how to incorporate demography into our larger planning, which is exactly what I hope you’re all doing at the state and local levels. So let’s go to the next slide, please. Alright, so how did we get here? There are just three ingredients to population change. So that’s all we have to wrap our brains around, and that’s fertility rates. We typically talk about the average number of children born to a woman in her lifetime. Mortality rates. Think about us dying. And, of course, migration. And if we’re at the global level, like the whole planet, migration doesn’t much matter. We don’t have other species coming here yet. But when we zoom down, it matters a lot. And I know to a lot of you on this webinar it matters a great deal for what determines population change at your local level, whether it’s in-migration or out-migration there. So where else did we—how else do we get here, putting these components together, particularly the births and deaths? Next slide, please. A quick overview of our human history in thirty seconds here. It took from all of human history until around the year 1800 for Earth to amass its first one billion people. But as we started to get control over that second variable on that preceding slide, over death, we started to see populations boom. In particular, we were able to help infants and children live to reproductive ages. And that allowed population to boom. If you’ll click one more time you’ll see that it actually boomed from 1.6 billion at the start of the century to 6.1 billion by the century’s end.  And I want to flag this as a moment to understand that probably for everyone on this webinar—maybe a few of you who are in your early twenties not so much—but this is what you were born into, right? I know this is what I was born into. We were born into this context. And when I talked about traps—you know, a little hint about the traps in data analysis, this is one part for us to take stock. What kind of world were you born into? What kind of messages were you receiving about population? We’re going to think about how that colors our view of it. Next slide, please. We’re not just talking about size of the global population. We’re talking about a shift in the composition of the global population as well. So what you see here, they’re commonly called population pyramids because they actually used to all be shaped in this little pyramid, like 1950s, but maybe more accurately called population trees now because they’re actually turning into more of trees. And it’s typically males on the left, in the blue, females on the right in the red. And we see age groups in the ascending order there. So it’s thin at the top in the 1950s. Not a lot of folks living to be over ninety, a hundred years old. And we see that it’s fatter at the bottom. And if you think about where people of reproductive age, particularly women of reproductive age, would be located on that pyramid, and you see that it’s fatter at the bottom, you know that your fertility rate—the average number of children born per woman—was over replacement level. By the time we get to 2023, we now have a total fertility rate globally of 2.3 children per woman on average. And that’s really close to replacement level of 2.1. And where we’re headed is a more tree-like structure. Next slide, please. That mirrors what happens at the country level. And so still today there are countries in the world that do have high fertility rates. In case you thought I was off my rocker in talking about shrinking populations and forgetting about places like Nigeria, or Tanzania, Ethiopia. No, that’s certainly still the case. But there are fewer of them. There are only about eight countries left in the world, out of two hundred, where women have five or more children on average. That is a complete sea change from 1960s, when it was, you know, about 130 countries. So the shape of Turkey’s population today looks a lot like the shape of the global population. And if you’ll click one more time you’ll see that Japan’s population has that tree-like structure, with lots and lots of folks at those older ages and fewer people at the younger ages. So the next slide, we’ll see why that happened. I said there were tectonic forces at work all along. Well, here they are. Since the 1960s, the rate of global population change has been slowing. And so what we end up with, next slide, is that in 1968 lots of women—lots of countries had high fertility. Very few had two or fewer children on average. And now, we click again, and we see that very few have high fertility and that two out of every three people on the planet live somewhere with below replacement fertility. And nearly half the countries that are above replacement, are only just above it, with women having fewer than three children on average. So we’re part of a global trend. And I think this is a spot for us to pause and think about why it matters. And that, you know, we’ll get into this in Q&A because I don’t want to get into Jess’ time, but when we think about priorities, and setting priorities and policy—and I’m at the global level—then we’re thinking about how the interests of those countries that have rapidly aging and potentially shrinking populations might increasingly differ from those that still have very young and growing populations. And it’s just something that I want us to keep at the front of our minds, is how investments and policy priorities might be different in those different settings. But, of course, we all need to be thinking about demography. Next slide. Because if you are thinking about planning for education, care work, et cetera, demography matters. This is just a quick map to show you places where fertility is still higher, which are some of the poorer places on the planet, as you might expect. OK. Next slide. OK, so the first trap is getting stuck in the past in terms of our trends here. So we know that trends change but sometimes our thinking does not change. And so I want to make sure that we understand how much the global situation behind fertility has changed, like those stars. OK, next slide. And, of course, that matters at the state level as well. So state—here, I’m thinking about the United States. And we’re about to make that a very different kind of state. But we—whoops. My own little screen just did something strange. So U.S. population has been, in some ways, exceptional compared to some of its peers for a while. We had relatively higher low fertility, if that makes sense to you. So low could be anywhere from zero to two, right? And we were on that relatively higher end of low. But that’s not necessarily the case anymore, as we’ll see here. And I’m sure some of you—well, probably all of you saw the news coming out of U.S. Census in November and December of last year, that really talked about these changes at the regional and state level in the United States, and which regions are growing or not growing. Next slide, please. That, much like the slide I showed with the little baby and the death and the migration, it’s driven by births, deaths, and migration at the state level as well. So we see here in the United States, our total fertility rate is somewhere around 1.6 to 1.7 children born per woman, on average. That places us, again on that higher—still kind of on that higher end. For comparison, in Japan is probably around 1.3, maybe a little bit lower than that. So this is, you know, kind of typical of a wealthy, industrialized country. And places in the country that it has historically been lower are the Northeast. So we typically see lower fertility rates. This down here is called the general fertility rate. So it’s expressed a different way, which is basically the birth rate—births per one thousand, women fifteen to forty-four. You can see where it’s slightly higher. It’s already, I think, starting to fall again in North Dakota and South Dakota. And, but we see regional differences here. Next slide, please. And we see regional differences in terms of migration. Now, let’s—look, this is taken from the Tax Foundation. So you know that they’re trying to make the point that people are moving to states with lower taxes, but that is true, demographically speaking.  You start to peel down at the level here, and we see people are moving to Texas for jobs and cheaper housing. They’re typically a working-age population. Most of Florida’s growth came from people between the ages of fifty and seventy. So, you know, nuance is always really important with demographics there. So I would submit to you that U.S. exceptionalism is over. We have low fertility. We do have some in-migration that is propping up the size of the population, but the U.S. is facing the same set of issues and opportunities—challenges and opportunities—that other wealthy industrialized countries are. And I think it’s time we wake up to that. Next slide. And we’re almost done.  And then trap two, I just really quickly want to point out that we are all carrying biases in with demographic data. All kinds of ones. Jess has a whole other set of biases besides the ones I’m going to talk about. But it’s really important for us to recognize that. I saw it when I worked at the Pentagon. I saw the U.S.—that line about U.S. demographic exceptionalism, perfect, was talked about all the time. Yeah, you can go to that one. And I say—would often say, we’re not that different from Russia and China. Just look at the little shape of our population here. A lot of things are really similar there. And in fact, if you are a democracy and you need to pivot quickly to deal with an aging population, it is very difficult. If you’re not a democracy, it’s a lot easier.  Next slide. I also often point out that there is a sense in the United States that migration will continue forever, whether you want it to or not. That does not matter to me. It’s just this idea that this—you know, we have the world’s largest stock of migrants in the U.S. So we tend to think global migration is really high. But really, 2 to 4 percent of people live outside the country in which they were born. That’s been true over the last decades and decades. There are actually far more older people worldwide than migrants. If you look at just those ages sixty-five to seventy-four, there are about 200 million more of them than global migrants. So this is a huge segment of the global population and of the U.S. population. But I think we kind of carry some of that bias into looking at the data there as well. And so a question we might ask is, will migration continue at these levels, and for the United States, or not? And last slide for me is just to say—I got two plugs for you here. One is the personal plug. The list of you on this webinar I’m salivating over because I would like to talk to you. Sorry, Irina, but I got to give this plug. My next project, research-wise, is trying to understand how we can thrive, not just survive, economically particularly, in this era of shrinking populations. And so if anybody is talking about this at your state or local level, please shoot me an email or find me for us to chat. And then the other is I’m on the board of the Population Reference Bureau, which does a lot of data and analysis for state and local governments about population projections. And I’m sure that soon—if this is the kind of thing that you’re interested in, I’d be happy to send you their way. Thank you so much. FASKIANOS: Jennifer, thank you so much for that and your wonderful slides. And we will circulate your contact information after the fact as well, in case people did not get it on the—on the slide presentation. So, Jess, now we’re going to over to you with your experience. Talk about what you’re seeing in Maine, what policies you were looking at to prepare there. And I know you’ve been advising other governments as well as the federal government—some national governments and the federal government. So what you were saying and where you see things are working well, and any best practices you can share with the group. MAUER: Sure. And thanks for inviting me. Glad to be here. And I just learned a whole lot from Jennifer. So I’m really excited to be here. And I have questions. And I’m going to be using some of—some of this data as I talk about this stuff in the future. So if whoever is going to share my slides could do that, that would be great. And so you can go right ahead to the next slide. I just thought before we jump into the issues that we’re seeing and some of the solutions, I’d talk a little bit about Maine. So Maine is the oldest state in the country by median age. Our median age is 45.1. We’re also the most rural state, which a lot of people find interesting. And I find that when I talk about rurality, a lot of folks particularly in urban areas don’t really think the same way we do. For instance, I’ve heard people talk about a city of twenty or twenty-five thousand people as rural. So, for reference, I like to say, only nine cities in Maine have a population greater than twenty thousand. And 83 percent of Maine’s five hundred towns have a population of five thousand or less. And, in fact, 44,000—sorry—44 percent of Maine’s population lives in towns with fewer than five thousand people. We have towns, like, with five people in them. And so, you know, we have a lot of rural communities.  We also have the lowest working-age population, which creates a significant challenge. Not just for business, but also when we’re talking about the direct care workforce and a significant growing care gap that we have for populations of all kinds across all settings. So next slide.  So here’s an actual look at our demographics. We have 44 percent of our entire population—entire population—is over the age of fifty. For reference, 18 percent of our population is under eighteen. And 23 percent is over sixty-five. So, this means for the better part of the last decade we’ve had significantly more people every year turning sixty-five than we’ve had babies, and sometimes twice as many for a good three, five, or six years. We had about 24,000 people turning sixty-five and about 12,000 babies born every year. Next slide. So in 2020, we launched a three-year municipal data dashboard project to help communities in Maine understand the challenges that older people in their community might be experiencing, and to take a look at their demographic challenges generally. These were our pilot communities. Just want to say that three of them were remote rural communities. One was our—one of our largest cities. One was a midsized city, and two are sister suburban towns. Next slide, please. So these are two different data points that highlight the differences between rural and urban communities in our—in our community, in our state. One generally looks at the median age. And you can see that, particularly for urban areas, not surprisingly, our median age is lower. But in some of our most rural communities, is very high. So in Eastport, the median age is sixty-one versus forty-five, as a state average. And in that same community, you’ll see that just over 70 percent—70 percent—of the households in that community include a person over the age of sixty. Next slide. So one of the shocking, really, pieces of data that we learned when we started digging deep at a community level was that some communities do better and others do worse at supporting people later in life. So you’ll see here, one community has very few people living in their community who are eighty and older, as opposed to another community which has a much larger percentage. And the next slide is actually the data. And you’ll see that these two communities have essentially the same population of people who are over sixty-five. And so you have to ask yourself, why is one community the community that’s better for older people—which is a city setting, walkable, access to transportation, access to affordable housing—so much better for people over eighty then another, which has no transit, all single-family homes, very few affordable housing units, rural, and very few services? So these are the reasons we start, like, saying, you know, it’s really important for municipalities to look at their own data and not just rely on state and county data to sort of see how they’re doing. I will say, interestingly enough, and why it’s important, this community that I mentioned in the last slide, that has—more than 70 percent of the households have sixty and older, they have a very, very low working-age population. And they said, well, that’s because nobody can afford to live in our city anymore. And they all live outside of our city. So we did a demographic profile of all the communities around their city that they said that older people—that younger people lived in. And the reality is, they don’t live there. They just have a really, really low working-age population, and it’s something that they need to consider. So next slide. In 2022, we did a report on the economic status of older women in Maine. And the next few slides highlight some additional demographic concerns specifically related to older women. On this slide, you’ll see why it’s important to explore data by gender, race, and age. Nationally, eighty—women over eighty have a significantly higher rate of poverty due to—than men—due to gender-based wage disparities across their lifetime. But in comparison to White women, Black women or women of color over the age of eighty experience nearly twice as much poverty as White women. So these are issues we just have to look at, right? I mean, it makes a difference if you’ve just experienced gender-based bias versus gender-based and race-based bias across a lifetime. Next slide. And then to truly understand how folks are doing in your community, you also have to disaggregate data related to age. For instance, all the reports we see show poverty among older people at a rate at about 8 or 9 percent. And we can see here, however, that women over eighty in Maine experience poverty at a rate nearly twice that of men over the age of eighty. So it’s really important not just to say, how well are people over the age of sixty-five doing? But now we have to say, how well are people over the age of eighty doing in our community? And are there demographic differences again, by race, or by age? So next slide, please. So the federal poverty level is the piece that we look at when we say whether or not older people are experiencing poverty. But living alone is a clear demographic issue that has big impact for people later in life. People who live alone when they’re older don’t have a second income, right, to help cover costs, and have no informal care within the home if they need help with care. And they also have no basic help with chores. They have nobody to drive them if they can no longer drive. They have nobody to help them with home maintenance. So two times as many women over the age of sixty in Maine live alone. And women who live alone, not surprisingly, have less income than men who live alone. The next slide, please. So we look at something called the Elder Economic Security Index, which is a national index that tells us how much income an older person or older couple needs to meet their basic needs if they’re in poor condition, poor—good health, poor health, excellent health, and also if they own their own home, with or without a mortgage, or they rent. So you’ll see here, this is both the previous slide and this slide, that at least half of the older women who live alone in Maine do not have enough money to meet their basic needs, regardless of where they live, and regardless of their health status. So these are issues that also help us think about: How we target services? And what do we do, right, when we come up against this sort of issue? So next slide. I just want to say a little bit about some of the policy-level solutions. We’ve been focused on really creating new models of housing in Maine for older people to address the very issue of a community that is no longer working for people over the age of eighty. We asked, well, what can we do? How can we help older people find housing, help older people find transportation? So with our focus on housing, we’ve actually just in the last few months—few weeks, actually, signed a contract with a new organization who’s going to start doing a home-sharing pilot project here in Maine, to get that up and running.  We’ve also been doing a considerable amount of work over the last many years on zoning, specifically related to accessory dwelling units. We’ve had a big win recently on that. And so it’s no longer just town to town whether you could—you can put an accessory dwelling unit or a second home on your property, but now really municipalities have to allow for that accessory dwelling unit. Which is a really terrific thing. We’re looking to implement transportation solutions that really knit together technology that we already have, and we already use, and volunteer driver—volunteer driver programs as well as public transit systems. Trying to make sure that they’re more accessible for everybody and also better funded. We’re also focused, and have been for a decade, on growing the direct-care workforce to meet the increasing support needs of older people. And have had some real success. If you’re—if you’re a direct-care worker in Maine and you’re living alone, you can actually earn a livable wage, which is really terrific. But, you know, not if you’ve got kids or a husband. So we’re still working on cracking that nut. But our big focus has really been on older people themselves and reducing poverty. Our biggest win just came in the last legislative session last year, when we used a lot of the data that’s in this presentation to secure economic justice for older people who’ve experienced a lifetime of economic injustice and disparities, by significantly increasing eligibility for the Medicare Savings Program. It’s a program that puts about $7,500 in the pockets of older people. So this ultimately means that about—well, about thirty thousand people in Maine, older people in Maine, will have more income. And they’ll be more on par with a livable income and will be better able to meet their basic needs.  And this is something any state in the country can do. The Medicare Savings Program is a terrific program. And for those of you who’ve done Medicaid expansion, Medicare eligibility expansion is essentially the corollary. It’s the part that lifts older people in your communities out of poverty. And D.C. actually increased theirs to 300 percent of the federal poverty level. We didn’t go that far. We’re up to 250. So pretty exciting stuff. And but totally doable, to really make a huge difference in the financial security of older people. So next slide. Just a couple more pieces, and then I’ll be done. We’ve also been using this data—and I loved Jennifer’s talking about traps. And I think, you know, we talk about this idea that we’re still sort of stuck in that 1950s thinking about older people, and what they should be doing, right? They should be leaving work. They should be retiring. The reality is, they’re supposed to be dying at seventy, and they’re not. They’re living to a hundred. And, but we really haven’t gotten rid of the views that older people aren’t good workers, that they cost too much money, that they’re not good at technology. And so what we see a lot of is ageism, both at an institutional and a systemic level. And so we’ve been using this data to talk about, you know, these outdated views that older people and aging—that they’re a problem.  And really, this image is what I like to—like, when I think about, you know, for the better part of the last thirty years, we’ve been talking about this, right? A silver tsunami. It’s literally a gray wave of sedentary, medically needy, older people that’s going to crash down on your head and ruin everything. I mean, that’s what we’ve been talking about. And it makes you feel all warm and fuzzy about older people, right? I mean, they’re a problem to be solved. They’re not a solution. So next slide, please. Really, the primary work that we’ve been doing lately is flipping the script, really changing the way we look at this wave. Literally turning the wave upside down, and looking at it as an opportunity. The key here—and I love—I love this point. We’re so focused on in-migration. And we haven’t—we’ve just started to move the needle in increasing the number of people over the age of sixty-five who are working. I mean, we’ve been working on that for a decade. So we’re glad that there’s movement, finally. But the focus has been on getting people to move to Maine.  And so getting this number, this is—you know, there are 200 million more people sixty and over than there are migrants in the world. I mean, that’s a really interesting number. And I’m going to be thinking about how to use that because, you know, we’ve really been looking elsewhere for the solution, when the solution, as we’ve been saying, is sort of right under our nose, that if we are seeing that older people—that people—all people are living longer, healthier lives, and can continue to work long into their seventies, and eighties, even in their nineties, then our solution is right there. But we’ve not yet been able to do that. So we really do need to flip the script and see older people not just as our workers, but also as our volunteers, as our cultural and municipal leaders, stewards of our environment, right? Caregivers for young and old, basically integral parts of our community that we just can’t let go and we need to actually embrace. And then the final slide is a new map. It’s called the new map of life, that’s come out of the University of Stanford. We look at this and it’s basically saying, look, kids are going to—kids born today are going to live to a hundred, by and large. And we have to think differently about our systems. We need to learn differently, right? Space out the way we learn, space out the way we work, and also need to build longevity-ready communities, right? Communities that have these new models of housing, transportation solutions that work for people who can’t drive. Again, not being able to drive didn’t used to be a problem, because people died when they were seventy. Now people stop driving in their eighties and nineties, for many physical reasons. Also just don’t feel comfortable about it. But we just haven’t—we haven’t invested in the solutions that help people move around when they can no longer drive. So we have to do this through this lens of equity. Age equity is what we have been talking about. And need to be intentional about who’s in our communities, who’s being included, who’s being excluded, partner with people in their eighties, nineties, and hundreds to talk about how we design solutions that work for them. We really haven’t been doing this, but it’s really what’s next in relation to, you know, sort of, again, how do we take advantage of what we have and also build what we need to build for the future? So I’ll stop talking there and say thanks for the opportunity. FASKIANOS: Thank you very much. Again, another fantastic presentation. And so we’re going to go to all of you now for your questions and to share what’s happening in your community. As a reminder, we are on the record. So I’m going to take the first written question from Justin Bielinski, who is director of communications in the office of Wisconsin Senator Chris Larson. Do you have any successes from Maine to share regarding increasing density, affordable housing in urban or suburban areas? MAURER: Sorry. We do have some successes. And we passed a really comprehensive—we actually had a committee that worked for a year on recommendations regarding these things and have passed a comprehensive bill in this regard. And I will say, it’s still early days to be talking. So I think the bill—the law itself is a success. But there have been real challenges to implementation. And I’m happy to share a link to that law in the chat. FASKIANOS: Great. And we can also share that out. Next raised hand from Councilmember Jose Trinidad Castaneda. Q: Hi. Good morning. Or, sorry, good afternoon.  So I’ve worked on some of the California ADU legislation. And I’m working on an innovative program for our city, in the city of Buena Park, California. One of the challenges that I have is how do we allocate our Medicare-managed plan funding for ADUs, specifically for categories of our population that are most vulnerable to demographic shifts—employment and economic trends that you were bringing up in both of your presentations? And since we have a silver tsunami right here at home, how do we—how do we balance that, as local policymakers, between what we need in terms of migration, a baby boom, and, like, a long-term kind of stabilization of a very—you know, a massive aging population in our city? So how do we allocate those funds? And how do we balance between those challenges? Thank you. MAURER: And, Jennifer, I don’t know if you—if you have any interest in jumping in. I’m happy to, I just want to— SCIUBBA: I’m listening to this part. Yeah. I’m learning. MAURER: I mean—I’m not going to say that we have it sorted out in Maine, by any stretch of the imagination. And I think the answer is, it’s going to take a lot of different solutions. There’s not one solution that’s going to work, A. And, again, you’re in a very different place than we are, because we’re so rural and we’re so spread out. But one of the things we’ve been talking about, A, is that we don’t ask people what they want. And the things we know that are true is that it’s better for older people to stay in their community. And because we have decided that we have to build—from an economic standpoint, we have to build affordable housing in a certain way or housing with services in a certain way—build and fund in a certain way, we just do. And so that separates people from their community if they, you know, don’t have an affordable housing option in their community. And so, you know, what we’ve been talking about are that we—you know, we really have to build what’s next. We haven’t—we haven’t designed or built that thing, although it’s starting to work. So we—you know, we’ve got a couple of—like, a pocket community in Dover, New Hampshire of, you know, forty small homes, tiny homes. They’re workforce housing, but I think that’s exactly the kind of thing that older people want. And the question is, how do we incentivize the development of the things that people want? I’m not sure I’m answering your question directly, but it’s going to take a mix of doing affordable housing differently. We need some changes within the federal government around Medicare and pairing of—well Medicare, and Medicaid, and also paying for services within housing. And we need to have affordable housing investing in accessory dwelling units and figuring out how to build affordability into them. So I think there’s a lot of solutions. There are a lot of problems that we haven’t found solutions to, but we’re working on them. SCIUBBA: I want to add in a little on that too, because I think what is great about a demographic lens is it lets you see the future in the ways that no other trend does. I mean, there is no other trend where we can be so certain about what the world will look like in twenty years. You know, the people of—the retirees of tomorrow are already born, or they’re sitting in kindergarten desks today. And so we can do this long-term planning. And I’ve even—there’s an architect who looks at age-friendly architecture out of New York City, who’s German, Matthias Hollwich. And he and his firm build modular homes. Imagine being in New York City or in a densely populated area, and when a building is being turned into housing units it’s done so modularly so that it can adjust for: Do you work from home? Do you have two small children? Did your children move out? Do you now have an aging parent move in? And some of this is done in the context of being environmentally sustainable as well.  So, you know, if we build for that, as Jess said, that can look all kinds of different ways depending on the community. In New York, it looks one way. You’re not going to do that kind of thing, you know, in my suburb of Memphis, Tennessee. But there are many options. And I think also, when we start to do an international comparative context, we can learn a lot there as well. Like, we can learn from other states but, like I said, the U.S. has seen itself as demographically exceptional for so long that in many ways we’re way behind. You know, I remember doing some fieldwork in Singapore in 2009. And they were working on complete streets there for older people to get on the buses, and how did they make that age-friendly? And that was, you know, fifteen years ago. So I think there are some places that have aged faster or have been aware of their aging faster that might serve us as models. Yeah. FASKIANOS: Fantastic. Texas Senator Donna Campbell has raised her hand. Q: Hello. Good afternoon. Can you hear me? FASKIANOS: Yes. Q: Yes. My name is Jim Morales. I work policy for Senator Donna Campbell here in Texas.  Thank you, Jennifer, for that presentation earlier. It was very enlightening. And also Jess, as far as the state of Maine. We are taking some good notes here. As you presented earlier, the growing population here in Texas from basically all over the country and other parts of the world. And we are currently working on legislation for the next session that addresses the workforce, especially, like it was mentioned earlier from Jess, as far as the age population—working population. The infrastructure, medical facilities and centers, nursing homes as well for that—in preparation of that longevity. My question is, if you can share, if you have that information, does Maine have any—have data or best practices on nursing homes, preparation for public health emergencies, and natural disasters? Of course, our natural disasters are going to be different from state—from state to state, but there’s some commonalities there, especially when addressing and sustaining our aging population. Thank you. MAURER: Yeah, and I wish—I wish I knew. You know, I don’t do direct advocacy, nor support—I mean, we’re partners with all of the aging services in Maine. But I can certainly find out for you. I know of a lot of our policies, but I don’t know of a specific—or a specific report that would answer that question. But I will find out and be happy to share it with you if I—if I find it. FASKIANOS: Great. One question, how does women’s access to reproductive care influence the population trends that you’ve cited, both globally and domestically? I think, Jennifer, maybe you can start. SCIUBBA: Yeah, sure. I’d be glad to take that. It makes a difference if you have a desired number of children, and you’re able to act on those desires. Certainly, that is why we have seen global fertility fall from, you know, seven children per woman on average to lower. But by the time you get to a wealthy country and how far it is along the demographic transition to lower fertility and mortality, we’re really talking about a lower number of pregnancies generally. So that would be women’s ability to control whether or not they get pregnant. And women have been getting pregnant less, particularly teen women. So in the United States, what a lot of people don’t realize is that that drop to below replacement fertility has really been in large part at the teen level. And so we see fewer teen pregnancies. That is not just from contraception and reproductive health. It’s also from the fact that they are less sexually active than previous generations were. So, you know, it’s always good to look behind those numbers and really see things like, you know, we see increasing pregnancies in my age group, in the forty-plus age group, is actually up. And so it does differ for those different age groups, yes. But having the ability to control who gets pregnant, when, and where does make a difference, of course, as to how many children are born. FASKIANOS: Great. I’m going to Patricia Farrar-Rivas. How are you addressing the high costs of care for individuals with dementia and Alzheimer’s? I think, Jess, you marked that you could answer that. MAURER: Well—I’m not sure that we’re addressing the high cost, but we are trying very specifically to, A, support informal family caregivers. We’ve increased the respite care benefit and have created a respite care program specifically for people with Alzheimer’s and dementia. Are doing a better job of trying to do care coordination. So that is one of the bigger cost drivers in the federal government, or CMS, or—you know, sort of uncoordinated care for people with dementia. We also have just completed the revision of our state plan on Alzheimer’s disease and related dementias, and have a BOLD—the second iteration of the BOLD grant, and are working collaboratively—starting implementation of many of the recommendations of that. And, again, a lot of that talks about coordination of care early, early diagnosis, early connection to services, and then additional training for all kinds of providers. Which I think is really critically important from EMS and Fire and Rescue to local municipal officials needing to understand, you know, sort of how do we—how do we intervene with people who are in our communities, particularly, as I mentioned, right, I mean, women are more likely to live alone than men. And this is a trend not just in Maine, but nationally. And so—and also, we didn’t talk about this, but I think, Jennifer, you bear this out, the generation before—Boomers had 10 percent fewer babies than the generation before it. And so you have a lot of older people who don’t have kids. And so you’ve got a lot of older people with dementia, with moderate dementia, living in the community, and really no supports. And so we’re really talking about, you know, looking at dementia-friendly communities, and how do we integrate some of the good work that’s been done nationally at a local municipal level to put supports in place, both for people living with dementia and with family caregivers. So happy to provide some more support. I’m not sure that we’re—I’m not sure we can say we’re addressing—we’re addressing the cost drivers at a very local level. I’m not sure we can say we’re being successful at the CMS level. FASKIANOS: Thank you. I’m going to go next to Tom Flight, board member in East Hampton Village in New York, with a raised hand. Q: Hi. Good afternoon. And thank you both very much. A fairly straightforward question, which is: What have you found to be the most effective means of educating the public on the changing profile of the population and the services required? SCIUBBA: I’ll add some global part of this. I think that we have a long way to go to get people to understand that this shift towards fewer babies is permanent, and not a problem to be solved. So that is, there’s just a long way to go in getting that. But it is a necessary first step then if we are going to implement these policies and programs that Jess talked about in detail, and all of you are concerned about in detail. It seems to me that without getting that first hurdle—getting over that first hurdle, we don’t plan for the long run.  So that’s why I do always start by putting it in global context. This is not some fluke. This is not an exception. This is a permanent shift, the likes of which we’ve never seen before. But we worked so hard to get there. We worked so hard to get infants and children to live to reproductive ages. We’ve worked so hard to create economic opportunities outside the home, and to educate people and, you know, to thrive. The result of that was having fewer children on average. And so I think we’ve got to—that is a first hurdle, and then understanding how to be resilient and adapt to this is the next step, which I’ll hand over to Jess.  MAURER: Sure. And, you know, I mean, I know this is going to sound ridiculous, but I’m going to say the answer is really just conversation. And we’re hosting those conversations at multiple levels. So we actually have created a thing called the Leadership Exchange on Ageism, which is a fourteen-hour, very intensive peer learning, leadership learning experience. We’ve had 180 leaders graduate through that. And we’re really digging deep on these issues. And what we found, which I don’t—you know, it’s sort of been stunning, actually—is that people—the program itself leads people to take rapid action within their own institutions, systems, and spheres of influence to create some change. It is an aha moment. And so we’ve now taken that. We’re having community conversations. And, again, we are finding them very impactful. People haven’t had a chance to have these conversations. And when you kind of bring cold, hard facts—as Jennifer presented them, and, you know, we talk about them, that people get it and they want to know then, what do we do next? And so, anyway, I will just say, we’re just hosting a series of conversations with employers. Again, helping employers understand why—what are the benefits of a multigenerational—first of all, what’s the business case? And then, what are the benefits of a multigenerational workforce? And if you approach it in that way, and then you give them examples of multigenerational workforces in Maine that are thriving, that are actually attracting workers because of—because they’re multigenerational.  And the ways—that’s the other piece. Is there’s a lens that we talked about, right? When you—when you do things to address challenges—real or perceived, by the way—for older people, older workers, it works for everybody. I’ve heard, you know, it takes longer to train an older worker. And then I say, well, even if that’s true, don’t you think that would benefit younger workers too?  Let’s start there. It’s not true. But even if it were true, wouldn’t it be better for younger workers to have a four-week onboarding process instead of a two-week? And don’t you think they’d probably do better, and feel actually better connected to the organization if you did that? So conversation is the key to this. And I’m going to say it works. I swear it does. So that’s my answer, and I’m sticking to it. FASKIANOS: Great. I’m going to go next to Emily Walker, legislative director in the Office of Pennsylvania Senator Katie Murth. Q: Hi. Thank you guys so much. I’ve learned so much from both of you. I am a Pennsylvania native myself, but I lived in York, Maine, for a long time, and I have family in Dover, Delaware—I’m sorry; Dover, New Hampshire, not Delaware. But, so familiar with the area and the issues that they face. And so it’s very helpful to see the work that you’re doing there. I have a question about kind of tying in sort of the needs of our younger generations into the needs of older generation. You mentioned, you know, more accessibility to affordable housing, more accessible public transportation, and just generally, like, more working—more workplace accommodations as well. Do you think there’s more opportunity that we could be bringing in young—so for being—I’m at the end of the Millennial Generation, and right at the beginning of the Gen Z generation. So I feel like, is there opportunity to kind of build on things that we do need for our aging population, and then the things that our younger generation are also asking for, that they want in their communities? And how can you sort of bridge that together a little better? MAURER: Yeah, I mean, I think that’s work we really have to do. And, yeah, all right, well, I’ll just say it out loud because I feel like, you know, it’s my—it’s my duty to say, you know, I’m not sure generational—like looking at generations are really helpful. Because I think it skews things. What I think is to say, you know, we have older people who need X, Y, and Z. And if you solve that solution—by the way, we have younger people who need X, Y, and Z. As a matter of fact, you know, older people—they’re lonely and isolated. That’s, like, I hear it all the time, like, with pity in your voice. Poor older, lonely people. Well, all of the data suggests that the people who are struggling most with isolation and loneliness are in their twenties and thirties, particularly young people who are going to college right now, because of the pandemic, are really struggling, right? And so, you know, it’s sort of, like, we need to stop talking about age and start talking about what we all want. And what you find, right, is if you look at workers today, right, older workers—oh, they need flexibility, or want flexibility. They want—they don’t want to work forty hours a week. They want to—well, OK, that’s also true for younger workers. I mean, all the trends say it. And so, you know, like, moving to a value-based sort of view, or what do we—what do we—where, where is there common ground, right?  I’ve heard over and over again that people who are described as millennials don’t like to drive, right? They would prefer to be driven. They would prefer to use public transportation. Well, public transportation is what we need. That that wouldn’t be what older people say, but they need—but they need public transportation. That’s what they would say. So for different reasons. So I think it’s like finding commonalities where things work for everybody, regardless of how you come at the problem. We come at the problem through aging, but we always try to solve that problem for everybody. FASKIANOS: There’s a written question from Stuart Murray in the Village of Corrales in New Mexico: It seems this presentation is aimed at higher-density communities. I was raised in a small Oklahoma town where services do not exist. When I talk small, 1,500 people or less. People do lean on other people, churches, et cetera. However, creating these services may not be financially possible. Is this where higher levels of governments need to step in to help these rural communities? MAURER: So I’m sorry if I gave that impression, because, like, all of Maine is rural. We don’t—we have, like—we have, like, nine communities that are not rural. And what we have are—one-hundred-plus communities have started volunteer initiatives called lifelong community initiatives, age-friendly communities, villages, NORCs, whatever you want to call it. We don’t—there’s lots of ones that have no models at all. But these are volunteers within communities that are doing volunteer driver programs, food, lunch programs, home repair initiatives. The key, though—particularly what we found in rural settings—is that you do need some community backbone, some community-based organization backbones. So, for instance, Habitats. And we don’t have Habitats in every community. Well, we also have public housing authorities, but not in every community. So we have some churches—that wanted to—so we look at—from a policy perspective, right, we say we need home repair, right? So the very first—so older people are living in homes that don’t work for them anymore, but we haven’t built the next iteration and we’re not going to build enough affordable housing. So we have to keep people safely in homes. So home modification, and weatherization, and home repair is the—is the first line, right, of keeping people safely at home. So how are you going to get those services affordably? Well, you have to figure out who you have that serves any community. And then we have successfully had Maine Housing then fund those home repair initiatives. Some of them use volunteers. Some of them use public housing authority staff. But it’s about, you know, sort of—we can do this. But it does have to be knitted together through the municipality, through volunteers, and through a community-based organization. We have found, over and over again, different models that work to solve different challenges that people who are living rurally are experiencing. FASKIANOS: Great. I think we have time for one last question. And I’m going to take it from raised hand, Monica Rossman, Glenn County supervisor. Q: Good afternoon. Thank you for letting me ask a question. We live in a very rural county here in California. Population twenty-eight and change. The problem that we’re having right now is getting our seniors to actually take advantage of the services that we are providing, even though it is limited. I keep saying over and over again, in fact I said it during my campaign, you know, a hungry bird only gets fed when it opens its mouth. And if these don’t want to do it, they’re just not going to. And, you know, I’m starting to see all of these programs, which I’m sure, you know, Jess, you could probably agree with me, there are a ton of programs out there. It’s just when they’re not used, they’re forgotten. And, you know, we have a grant for tablets to senior citizens that have been open for two years.  They’re just now, ever since I started—I started peeling an onion, is what I did. When I first got into office, I started taking care of, you know, my senior citizen parents who have Alzheimer’s, dementia, the shared cost, you know, taking care of two households, you know, trying to get two households to run. So my question is, how do we get the—what is the incentive to bring them in? You know, what can we do? That’s the problem that I’m having. And I’m working on it. I feel like I’m going uphill. And I could definitely use some help. So thank you for letting me ask the question. MAURER: Yeah. So, you know, I mean, if I were in a room full of however many people who are here today, I would say how many people like asking for help? And the answer is zero. I mean, like, every once in a while some doctors will raise their hand. I don’t know what that’s all about. But most people really don’t like asking for help. And it’s really true. I mean, like, I mean, I love, you know, it’s a trap, right? Independence is a trap. And what we hear all the time when we ask, when are you old—what’s old and when will you be old, it’s always about what I can’t do for myself. And so there’s a real tension inside of us that says, if I need help, you know, I’m on the—I’m on the downslide here. And so there’s—so one of the things we found that’s really helpful is to ask older people, why is it hard to ask for help and what would help you ask for help? And, specifically, what’s the trusted source? What we heard in my own community when we asked that question is: We don’t want to rely on the same volunteer over and over again. We don’t want to burden our children. We don’t want to, you know, burden our next-door neighbors. But if there was—if we could call the town, or we could call a church, then—and say, I need a ride to the grocery store, that would feel less burdensome for us. So I think it’s about asking the people themselves. And then, I will also say, getting a whole bunch of volunteers, right, together who know about the services to be the bystanders who are there to say: Hey, I know about this great program, when they hear that people are in need of things. And we have found that’s a great way. The final piece, I’ll just say, in my own community, again, we’ve had this—every community has this problem that there are benefits that people don’t want to use. Telling stories in your local paper about people who did use them successfully and how it changed their life is really good. It’s money. It does—it does bring people in. SCIUBBA: Yeah, the two last ones that Jess mentioned, I was thinking come—we have so much research in the public health literature about how to change people’s behavior. And the most effective way being a peer who’s used a service coming into your home and talking about that service. And if we’re talking about family planning, or if we’re talking about old-age services, or, you know, any kind of help in the home, that model just—that community-based model seems to work really, really well. FASKIANOS: Thank you both for this wonderful hour. We really appreciate it, for you taking the time to share your expertise, and for all the great questions and comments. We appreciate you as well. We will send out a link to the webinar recording and transcript, contact information, links to resources. You can follow Jess Mauer at the Maine Council on Aging on X at @mcoaging, and Jennifer Sciubba at @profsciubba. As always, we encourage you to visit CFR.org, ForeignAffairs.com, and ThinkGlobalHealth.org for the latest developments and analysis on international trends and how they are affecting the United States. And please don’t hesitate to share suggestions for future webinars. You can email us at [email protected]. Again, thanks to Jess, and Jennifer, and to all of you. And we hope you have a good rest of the day. END  

A. Michael Spence, distinguished visiting fellow at CFR, provides a global perspective on the changing landscape of labor and economic productivity. Sharon Block, professor of practice and executive director of the Center for Labor and a Just Economy at Harvard Law School, discusses this year’s strikes and the economic implications of increased collective labor activity in the United States. A question-and-answer session follows their opening remarks. TRANSCRIPT FASKIANOS: I’m Irina Faskianos, vice president for the National Program and Outreach here at CFR.  We’re delighted to have over two hundred participants from forty-seven states and U.S. territories with us today. CFR is an independent and nonpartisan membership organization, think tank, and publisher focused on U.S. foreign policy. CFR is also the publisher of Foreign Affairs magazine. And, as always, CFR takes institutional positions on matters of policy. Through our State and Local Officials Initiative, CFR serves as a resource on international issues affecting the priorities and agendas of state and local governments by providing analysis on a wide range of policy topics. So, again, thank you all for joining us today. As a reminder, this webinar is on the record. The video and transcript will be posted on our website after the fact, at CFR.org. And we will circulate it to you as well. We are pleased to have Sharon Block and Michael Spence with us to talk about U.S. Strikes and Global Trends in Labor and Productivity. I will give a few highlights from their bios. Sharon Block is a professor of practice and executive director of the Center for Labor and a Just Economy at Harvard Law School. Recently, she served as a senior official in the Office of Information and Regulatory Affairs in the Biden administration. From 2017 to 2021, Professor Block led the Labor and Work Life Program at Harvard Law School, where she focused on labor law reforms to build a more equitable economy. Prior to that, she’s held various senior positions in government, including principal deputy assistant secretary for policy and senior counselor to the secretary of labor. Michael Spence is a distinguished visiting fellow at the Council on Foreign Relations and clinical professor of economics at Bocconi University in Milan. He is also a senior fellow at Stanford University’s Hoover Institution and the author of the book, The Next Convergence: The Future of Economic Growth in a Multispeed World. And in 2001, Dr. Spence was a co-recipient of the Nobel Prize in Economic Sciences. So thank you both for being with us. Sharon, I thought we could begin with you to give us a sense—give an overview of the increased collective labor activity in the U.S. that we’ve seen this year. If you could discuss the different strikes and the common threads, AI among them.  BLOCK: Yeah, happy to. And thank you for having me. It is—I’m sure it will be a really interesting conversation. So just set the stage, this summer into fall, I think, was a season like no other in recent years in the U.S. labor movement. There were approximately half a million workers who went out on strike in 2023. And a lot of that activity, again, was concentrated in the later part of the year. Another way of thinking about that is more than four million workdays were spent on strike instead of working. And to put it in context, that’s double the number of workers who went out on strike in the U.S. in 2022. So really a big upswing. But, to sort of pull back and put it in even sort of longer historical context, it’s a much, much lower number than what we saw decades ago in the sort of the high point of union density in the United States. You had millions and millions of workers out on strike, and a much greater part—share of the economy would be affected by those strikes. But in terms of, like, say, the last twenty to thirty years, this was a very significant year.  The biggest strike in the United States this year was the SAG-AFTRA strike. That’s 150,000 union members were on strike. That’s a little bit of a funny number because SAG-AFTRA members are obviously a little unusual. They don’t go to work—typically they don’t go to work every day. But they are a very big group that withheld their labor, along with the Writers Guild. So you had Hollywood shut down for a significant period of time. The next biggest strike this year was the strike at Kaiser Health Care. Those are mostly SEIU members. That was about 75,000 workers who were out for three days. And then the strike that got certainly the most attention and was, I think, the third-biggest strike this year, was the United Auto Workers and their sort of novel strike strategy vis-à-vis the big three auto companies. Now, they did not take all of their members out at one time. So that was about 50,000 workers. There are more members in the UAW than that. But it was still a very significant number of workers, even with this sort of staggered strategy.  So in addition to those three very large strikes we also saw strikes in the hospitality sector, in Las Vegas at the casinos, also L.A. hotels, and then in higher education. So the most of these strikes were really centered in the private sector. But we did have University of California, graduate student workers went out on strike. That was a very large strike. And then Rutgers University faculty and staff went out on strike. Now I would add to this an almost-strike, if you really want to think about how dramatic this activity was in the United States. The UPS workers—the Teamsters at UPS didn’t actually go out on strike, but took a strike vote, came very—like, within hours of going out on strike, at which time they were able to reach an agreement with the company. But it’s a similar dynamic of the threat of a strike that led to that agreement. But say the theme among many of these strikes was that they existed—they happened between bargaining partners who have a very mature collective bargaining relationship. You think about the auto workers who have been unionized at the same three companies—you know, one of the companies has changed their name—but essentially organized at those three companies for almost a hundred years. These are not the kinds of bargaining relationships that have dominated sort of labor news over the past year or two, like Starbucks and Amazon, where you have new collective bargaining relationships. We didn’t see strikes among those workers. We saw them in these very established relationships. The other theme among these strikes, really almost universally, were very, very big wins for workers. They settled these strikes with agreements that, I think, were objectively viewed as very advantageous for workers. You saw very high levels of public support for the workers in almost all of these strikes.  And then, to your point about AI, these are also strikes that happened, for the most part, in sectors that are in big transition. In some, because of the introduction of AI. That was obviously a very big theme, a big factor in the Hollywood strikes, but also other transitions. In the autoworkers strike you had the issue related to transition to an EV future played a big role, in healthcare that’s obviously an evolving field. So this idea of there being a big transition and workers using their power through their strike in order to get contracts that help them have more of a say in the future. And then I would say one last theme that was very prevalent in many of the strikes was the sort of rhetorical and motivating theme of workers wanting to have their fair share. You heard that phrase come up a lot. So we’re talking about sectors where the companies had had a recent history of very high profits, workers who were locked into collective bargaining agreements that they had negotiated sort of before the pandemic. So if you think about, like, UPS had very, very high profits during the pandemic. The Teamsters were working under a contract that didn’t anticipate that level of profits. You have—the auto companies were also coming off a couple of years of very high profits. And so you have this theme of workers really wanting to get their fair share of this increased revenue and profits that they saw coming into their—into their companies. The last thing I will say is just if you want to understand just sort of how positive this strike season was for workers, you just have to look at the UAW contracts. I mean, there are so many things about this strike that were just groundbreaking, or at least groundbreaking as of the past few decades. You saw wage increases of 25 percent for permanent workers and 150 percent for some of the temporary workers. You had really novel provisions in the collective bargaining agreement that they eventually signed to keep open or reopen auto plants. We’ve never really seen that before in a collective bargaining agreement. And workers preserving the right to strike over any other plant closures. As I said, you got this foothold in the EV future in agreements for the companies to recognize the union in these EV battery plants. And so, it was just a really remarkably positive contract that ended the strike in the auto sector, really transforming the UAW to be able to say, again, that a job in the auto sector equals a good middle-class job. And we’re seeing now the autoworkers taking that message to the nonunionized companies—Tesla and the transplant companies—to say, look what we got for workers at the big three. Wouldn’t you like to have this too? And you’re seeing actually these companies already responding by raising wages. So it’s also a strike that has had pretty significant ripple effects already. One thing to watch in 2024 is how far those ripple effects go, how successful they are. Will this season of successful strikes for workers actually lead other workers to want to organize a union in their own companies, in their own sectors, maybe even beyond the auto sector? And, again, we did have some groundbreaking provisions that came out of these strikes around AI. The Writers Guild, most significantly. You had agreements that AI can’t be used to undermine the writer’s credit, requirements for studios to disclose if they’re giving any material to writers that was generated by AI. But then also, in a sort of more positive embrace of AI, the right for writers to choose to use AI as a tool as part of an agreement with the studios. SAG-AFTRA, the actors also got provisions sort of protecting their images from AI replication without their consent. And the Las Vegas—the hospitality unions also got provisions guaranteeing them advanced warning of any new technology rollouts that were going to impact jobs and training for jobs that are altered by AI. And, really importantly, protections from certain types of AI that enables surveillance within the workplace, something that was very important to hotel workers who have been increasingly surveilled in their work. So there is a lot to dig into. I’m going to stop talking so we can get to some questions, because there’s really—could go on and on because it was such a fascinating period of time. FASKIANOS: Fantastic. Thank you so much, Sharon.  Michael, let’s go to you to pull out a little bit and talk about the global trends you’re seeing, and the implications for the future workforce and labor movements. And you just recently authored an article in our magazine, Foreign Affairs, The Coming AI Economic Revolution, with James Manyika. So perhaps you could talk a little bit too about the AI piece of this as well. SPENCE: Well, thank you very much. And I’m, you know, like Sharon, very pleased to be with you. So let me approach these things, you know, at a sort of slightly different level. That three-decade period that Sharon referred to is a period in which a massive amount of productive capacity was introduced into the global economy, largely as a result of emerging economy growth. And that had one very large negative effect, which was it, you know, created options for, you know, labor arbitrage and decreased the power of American labor. So unions declined, you know, the middle class got hollowed out to some extent, and so on. That force is fading. It’s not over, but it’s fading. There’s lots of evidence of that. You know, for at least two decades, probably more than that, we lost employment in the manufacturing sector. That stopped in the last decade. And then—but then there’s some other trends that, you know, kind of reinforce this. So when I look, you know, I see aging populations. Seventy-five percent of the global GDP is produced in in countries that are aging rapidly. You know, the great financial crisis caused some of our older fellow citizens, like me—not to retire. Now they’re retiring in droves. You know, when I look at the American economy all—most of the big labor, you know, employment sectors have labor shortages, right? I mean, it’s clear that on the underlying economic fundamentals, labor’s power position vis-à-vis their employers has increased dramatically. Some of this shows up in unionization. Some of it just shows up and in bidding for, you know, talent in a way that basically companies didn’t have to before—or, employers in general. So I think this is basically a good development. I expect to see, you know, several attractive trends. A reversal, maybe not a dramatic one, in the trends in inequality on the income side, which would be very good thing because it had gotten pretty extreme over this three-decade period. You know, I think we will see productivity increases because when you’re short of labor it’s sort of natural to start looking—the incentives are much stronger to look for productivity-enhancing things. And if that’s done in a way that makes—you know, puts management and labor in a collaborative position, seeking for ways that are mutually beneficial to do it, that’s also a good thing. On the negative side, you know, this is—you know, for the first time, really, we live in a supply-constrained world. I just—you know, at the risk of telling people what they already know, after the great financial crisis we’ve had—and for a longer period than that—we’ve had essentially no sign of inflation whatsoever. And we had no sign of inflation, in spite of zero interest rates and massive infusions of liquidity into the economy to try to precipitate a recovery after the balance sheet damage that the great financial crisis caused. And as a result of that, people have kind of gotten used to the notion that, you know, the cost of capital isn’t very high. So for people who are operating in state and municipal governments, I think, you know, there’s—nobody knows for sure. And we have a big inflation fight on, led by the central banks. Not just in the United States but in the U.K., and in Europe, and in other places. China being a fairly dramatic exception to this. We’re likely, in my view, to emerge from this with higher real interest rates. I don’t have any doubt that the central banks will get the inflation eventually under control, because they’re determined to do it and their credibility depends on it. That’s their job. But when we come out, I think we’re going to have, you know, lower sustainable debt levels, higher cost of capital, lower multiples, lower valuations for many assets. This will have mixed effects. You know, the cost of funding, certain longer-term investments is going to be a little bit higher than it was before, maybe even more than a little bit higher. On the other hand, from a distributional point of view, you know, when—in the period—the decade after the great financial crisis, the one thing that just ballooned in value was the assets. And that favored people who, you know, own a lot of assets. So it didn’t do wonders for the distributional features. So I think on the whole, if you sort of look at—I mean, there’s a lot—a lot of other factors, you know, that are affecting this. The global supply chains are, you know, collapsing—or, being fragmented. We have a major strategic competition, you know, with China underway. Economic policy, from an international point of view, has tipped toward, you know, various kinds of security—national security prominently, but also economic security, here in Europe energy security, food security, and so on. And this is causing, you know, policy to reinforce a trend in the global economy that’s very visible now, which is diversification in pursuit of resilience.  And the policy is reinforcing it and saying: We have to do some of this at home in a way that we didn’t pay attention to before. We lived for three decades, those three decades, in which the way global—the global economy was constructed was basically on the basis of economic efficiency and comparative advantage. And that’s no longer true. So we have homeshoring, friendshoring, nearshoring, et cetera. All of which are transforming the structure of the global economy. And for the most part, I think, in ways that favor, you know, domestic—our domestic fellow citizens, and especially labor. Briefly on AI. So, we’ve had a sequence of breakthroughs in AI that go back, you know, a decade or a bit more. Language recognition. You know, image recognition was a stunning set of breakthroughs that, you know, occurred roughly around 2015-2016. But the one that’s really gotten people’s attention is generative AI, the large language models and the like. So there’s several things to say about this. And I’ll try to be brief. One, we’re not at the end of this. These folks aren’t finished. So what’s coming next we don’t know. I suspect that we will see significant advances in robotics as a result of the fact that gen AI allows you to basically talk to machines in a way that they understand.  The gen AI is distinctive in the sense—in two respects that I think are important. One, unlike any other previous version of AI, they switch domains easily. By that, I mean, you know, you can talk to it about the Italian Renaissance and then switch to math and then it’ll do computer coding, you know, and whatever, right? Now, there’s lots of quirks, you know. These systems so far have hallucinations. They make stuff up. And I mention that for a reason. You know, it’s not—when you look at it carefully, it’s not sensible to think that these things should be fully, you know, allowed to operate on their own, right? They’re just not that flawless. You know, there’s a famous story in America, you know, a lawyer, slightly incautiously, prepared a legal brief entirely using ChatGPT, and handed it in. Well, ChatGPT made up all the legal precedents. And this gentleman is, I think, in some serious trouble as a result with the courts.  So the way I think about it, and I’m not alone in this. I mean, James and I wrote that paper. We think that the right model is powerful digital assistant or machine-human collaboration, right? And you have to work that out. But let me say, you know, right at the top, there’s just overwhelming evidence that whenever you mention, you know, AI, people think, automation. They think they’re coming for our jobs. A hospital administrator stands up and starts talking about AI—and, by the way, AI is going to be transformative in biomedical and life sciences, which is not our topic for today. But it’s just one of the many places where the footprint over time will be felt. We have to overcome this bias. So the implementation matters.  You know, unions representing people and having a voice in which they participate in conversations about what the AI is supposed to be doing and how it will change the jobs, and which parts are acceptable or not. But I think in the course of it we can sort of get rid of this—what I call the automation bias. Erik Brynjolfsson at Stanford calls this the Turing trap. Alan Turing proposed that we evaluate our progress in AI by asking the question: Can we produce a machine that when a human being interacts with that machine, not looking at it but talking with it, it thinks it’s interacting with another human being? And so we haven’t got there yet, but we’re working on it. Second, one small step. Almost all AIs are benchmarked against human performance. So when they declare victory in image recognition, it’s when it passes the average human, and so on. It’s the next small step that’s dangerous, which is, you know, well, once the machine passes the human, why don’t we replace the human, right? That’s where the AI—the automation bias comes from. And it’s just a mistake. Now, there may be a time in the future when these machines are so good that automation is a more serious consideration. But right now, they’re powerful digital assistants. They can sometimes do things that humans can’t do. Sometimes they do them, you know, in a way that’s just on par. But they—but I think the promise here is if we do this right that we’ll have the potential—not next year, not the year after, but maybe by the end of the decade—we’ll start to see, you know, impacts of this and in terms of productivity that are actually, you know, enhancements to the way people work and how they view their employment. To get there, we got to get rid of the automation bias, which is very deep. And we need one other thing. We need access. So right now, we’re in a period of intense exploration and experimentation. Who’s doing this, right? The answer is the companies with the resources to do it, you know. But if we’re going to have this broadly beneficial in society, available to small businesses, to local governments, and so on, it has to diffuse widely and well beyond, you know, the kind of entities that have the capacity to invest tens of millions of dollars in it. There’s a role for government in this.  And I want to conclude with this, because we’re talking to, you know, important government officials in our economy. There really is a role, you know, in ensuring diffusion and broad-based access to these tools once we’ve decided, you know, in rough and ready terms, you know, how we’re going to try to use them. It’s really important, both for the purpose of getting the productivity surge but also, you know, for preventing—you know, in past—there’s studies of this at the McKinsey Global Institute. In past, you know, episodes of digital, you know, transformation, they’ve studied adoption. So and what you see is a pattern of divergence. So the tech sectors way is way up top, and finance is not far behind, and then you drop down and find sectors that, you know, are lagging seriously in this respect. This is the pattern that we do not want to repeat on this round.  So I think there’s huge potential. There’s some downside risks. James and I would say that, you know, it’s important to pay attention to the misuse of these things and the downside risks, just as there is with any powerful technology. I mean, gene editing is terrifying if used in the wrong way, just as AI is as well. But there’s the positive agenda as well. FASKIANOS: Thank you both very much. And now we’re going to go to all of you for your questions. We’ve got the first written question from Riley Nye: Hasn’t automation already replaced tons of manufacturing jobs? SPENCE: Sharon, do you want to take that, or? BLOCK: I mean, certainly there has been displacement. Earlier this year I visited a Ford auto plant. And it is very, very—a very, very different place than certainly historical documentation of what the manufacturing process looked like. There are a lot fewer workers. You see that also reflected in—just to stay with the auto sector—in the number of UAW members in that sector. The UAW has actually diversified their membership a great deal. They do a lot—as many people on the call may know if you’re involved with higher education—they represent now many, many graduate students and other employees of higher education institutions. So, yes, that has happened. But the displacement conversation is obviously not over. And there is, I think, concern about additional displacement of workers if robotics and those kinds of productivity enhancements, or whatever the right euphemism is, continue. But I do think in the shorter term, the bigger concern actually should be for workers is the way that automation is being used in workplaces to enhance not just productivity but also employer domination of workers. These surveillance issues you’re seeing, especially if you follow, like, the logistics sector. The intensification of work that is enabled by the kind of productivity tracking that AI has enabled. I think these are the changes in the workplace that people are feeling already, even before we get to this question of whether AI is ever going to—or when it’s going to be good enough to replace more workers. And so that’s a place where I think the regulatory attention really needs to be paid. And if you look at what the EU just did—we don’t know the details yet of the AI Act that the EU Parliament just passed—but there is a lot of attention to those issues. And, in fact, the workplace is designated in that legislation is a high-risk forum for the introduction of AI, not because of the displacement issues but because of the intrusion into sort of personal privacy spheres for working people, and this potential for new safety and health issues to arise from a misuse of AI in the workplace. FASKIANOS: Thank you. I’m going to go next to Justin Freeman, who is the director of community affairs for New York State Assembly: Could you share more about how today’s strike actions compare to before, say, thirty, forty years ago? You mentioned four million strike days. BLOCK: Yeah. So, again, we haven’t had a year with four million strike—it’s actually more than four million at this point. That doesn’t capture the full range of the UAW strike days. But I just couldn’t find a more recent calculation. That’s a little bit of a hard calculation to do. We haven’t seen a four million strike day year in a long time. So, say, ten to fifteen years ago. But if you look at, like, in the 1930s, so the period as we were legislating the right to join unions, you would have—there were years in the 1930s, early 1940s, where you had thousands of strikes in the United States.  And, you know, it’s hard to compare numbers because our economy is obviously so much bigger now. Our workforce is so much bigger. But if you could imagine thousands of strikes. It was really a completely different scale. I mean, if I could show you a graph from, like, the ’40s to today, you would see a line that just really dramatically falls off as we entered this period, you know, that we’ve been talking about, like the past thirty years of a real decrease in the strength of the labor movement. You saw a commensurate decrease in the number of strikes. FASKIANOS: OK, thank you. Shawn has asked a question. China was mentioned. How big of a threat do you feel China is, with their housing, population, and debt crisis? SPENCE: OK. So I think everybody knows that China, you know, has had kind of a pretty impressive forty-year run. It was one of the poorest countries in the world in 1980. It has exhibited growth rates of, you know, 7, 8, 9 percent on a sustained basis that, you know, causes, you know, the size of the economy and incomes to double faster than every decade. That’s not something an advanced country can do. I think China is now in a very difficult sort of position in terms of transformation. And the economy is in trouble.  So they have major, major excess capacity in real estate, and a lot of non-performing loans, and whatnot. This directly affects the Chinese economy because while this is, to some extent, true in other places, the household balance sheet—meaning wealth—is heavily dependent on real estate, right? Once they started buying houses and so on, they just owned more real estate and less kind of other kinds of assets than almost anywhere else in the world. And so when the real estate values decline, or there’s some uncertainty, or it gets shaky, or, you know, the apartment that you bought in advance doesn’t get built, it causes a major shakeup in confidence.  The fiscal system needs major reform in China. The municipal governments are essentially flat-broke. They do not have the normal sources of revenue that our municipal governments do. And they are responsible for delivering services that are in excess of their capacity to finance it. There’s no more land. They used to do it by selling land. There’s no more land to sell, or not enough to finance themselves. But I think the really sort of serious challenge, in addition, in China is that the pattern of off again/on again and fairly aggressive regulation, which you can see in the tech sector but it’s broader than that, has caused a loss of confidence among investors.  And by that, I don’t mean foreign investors. I mean, everybody, including the domestic investors. And so with the household spending, you know, a little bit on hold, and the private sector investment, you know, kind of on hold because they’re not sure what their place in the sun is, that, you know, there’s a significant slowdown. The numbers in China will look OK because the previous year was a disaster. So when you’d show up growth numbers, you know, when they were in zero-COVID, it was, you know, unimpressive. So the numbers look better than the actual situation. Having said that, you know, it is in many ways—you know, in human capital, in science and technology, and whatnot—they’ve made huge investments in it. So I don’t want to leave the impression that this is a kind of, you know, permanent disaster at all. They can pull this out. And it’s an economy—it’s a very large economy, the second-largest one in the world. And it will be, if they right the ship on these—what I think of as short- and medium-run challenges—it’s a, depending on how you think of it, a powerhouse and potential major competitor. FASKIANOS: And, Michael, just to follow up on that, a question from Alan Schneider, who is legislative director in the Office of Maryland Delegate Chao Wu: You know, given the relationship changes between the U.S. and China, how are the changes affecting wage, A1, and inflation here in the United States? SPENCE: Very good question. So in terms of, you know, the—we are in—our national security, you know, driven policies are bringing more stuff home. And in addition, China is now an economy with a per capita income of $13,000. You’re not going to make, you know, the cheapest labor-intensive, process-oriented manufacturing and assembly stuff in China for very much longer. There is no real substitute for China. There are other countries. And some of them are benefiting—Vietnam, Bangladesh, you know, Mexico has a major opportunity as China sort of, A, gets into kind of conflict with us and, B, you know, we move both businesses and governments in behind with policy to move stuff away. I think on the whole it’s slightly inflationary. But it’s good for, you know, labor—meaning, our labor. FASKIANOS: Terrific. Let’s go to—sorry. Going to sell in Selin Zorer: What proactive steps should federal and state legislators take to ensure that the emergence of AI benefits the public? SPENCE: Sharon, do you want—do you want— BLOCK: I can—I can start. I mean, you know, I think one way to ensure that it benefits public—I mean, most of the public has to go to work every day. And so thinking about the ways to protect workers from some of these abuses and excesses is really important. The other—I think the other area where I’m really interested is while we see some paralysis at the federal level in terms of legislating around the introduction of AI into the workplace, I think there is much more of an opportunity for state and local governments to step in. California is obviously very engaged in their legislature in thinking about guardrails for AI in the workplace and in other domains.  But it’s really important that as this regulatory forum moves to state and local levels, that there is an attention to making sure that the people who are going to be most affected, that working people have an opportunity to have a voice in how this regulation develops. And so whether that’s bringing in the labor movement, finding other ways to ensure that working people are participating in these really important conversations, I think is going to be critical. And I hope we’ll see sort of interesting and innovative approaches as more states feel compelled to get into the game. Because we are probably not going to see, you know, significant federal regulation or legislation in this space. FASKIANOS: Thank you. Next— SPENCE: Irina, could I— FASKIANOS: Go ahead, Michael, absolutely. SPENCE: This is—I don’t want to repeat myself but, you know, there’s a positive agenda. You know, a lot of the, you know, management that affects people’s lives is done at the state and local level. Not, you know, the kind of stratosphere where some parts of the federal government operate. And, you know, I think, you know, thinking carefully about where we’re going with these technologies and how you help people, you know, become comfortable with them, productive with them, and so on, is a hugely important part of the agenda. And I can’t think of more important entities than the state and local governments, you know, the community colleges. You know, the education system as a whole seems to me to be, you know, where the conversation needs—you know, a fair amount of the conversation needs to occur. So, again, I don’t want to, you know, minimize the importance of preventing downside risks and misuse and so on. But I think walking into the world, you know, without a coherent set of programs to help people—you know, if we are going to have these transformations in one form or another. That it’s way too powerful, these technologies. So I think the challenge is to do it right, rather than resist them. FASKIANOS: Fantastic. I’m going to go next to Justin Freeman, director of community affairs at the New York State Assembly: Is there any correlation between interest rates and strike actions? Can strikes be anticipated through economic indicators? SPENCE: Go ahead. FASKIANOS: You can take it. Who wants to start? BLOCK: I think Michael mentioned the most important factor, which is a tight labor market. I mean, that is clearly connected to this upsurge in labor activity, both in the strike activity and then also in this renewed commitment to organizing. There’s just—there’s a lot of risk under our legal system. There’s a lot of risk to workers who try to organize a union, who go out on strike. We have a law that’s really deficient in terms of protecting workers who engage in that kind of labor activity. And so a tight labor market gives workers the confidence that if they are retaliated against for taking this kind of activity, that they can find other jobs. And it’s really as simple as that as to why you see that correlation between a tight labor market and increased union activity. So I think that’s the most important factor. I think the issue of interest rates is just whether the Fed was going to raise interest rates enough to start driving that unemployment rate up and creating slack in the labor market, which then would have taken some of this dynamic—diluted this dynamic so that workers didn’t have that same confidence in their ability to find other jobs when they take the risk of organizing or striking. FASKIANOS: Michael. SPENCE: Yeah, I mean, essentially the same. I mean, so we—you know, the supply side of our economy, and the global economy has just changed dramatically, right? So it used to be almost infinitely elastic. You could have a surge in demand and, you know, somewhere somebody produced enough to meet it. That’s just not true anymore. That’s why we have labor shortages, as Sharon says. That’s why labor power is increasing. And as for inflation, you know, the trigger, you know, as we came out of the pandemic with a predictable surge in demand, and the supply side constrained by, you know, aging—you know, all the things we talked about. You know, we had a demand and supply imbalance. It was the trigger for inflation. Now, inflation can develop a life of its own, you know, once it goes on for long enough. But, you know, the economists look at this and say: When have we seen interest rates go up this fast and this high and not seen, you know, labor market problem? We just—you can go back a long way and try to find out an example of this. So, you know, this—what this tells you is that, you know, we have fundamental structural changes underway in the economy. And they—and the relationship between the labor markets and the inflation is that, you know, it triggered the inflation because the supply side couldn’t keep up. Now, what’s going on now, and I’ll just end with this, is, you know, the central banks, you know, can’t operate on the supply side of the economy. So they’re basically raising interest rates largely to reduce aggregate demand and get rid of that imbalance. And so far, they managed to do it without, you know, producing unemployment increases of any significant magnitude because there are labor shortages—short version.  FASKIANOS: Great. Thank you. I’m going to go next to Aaron Tebrinke, who’s legislative assistant to Leader Koehler of the Illinois Senate: After 148-day strike, Hollywood screenwriters secured significant guardrails against the use of AI in one of the first major labor battles over generative AI in the workplace. A battle for automation against AI, automation was won by labor. But what protections will workers have to keep up with AI tools in the marketplace that are not regulated for privacy? SPENCE: Sorry, can I—the concern of the writers was that, you know, they were going to get displaced, you know, by the use of, you know, the kind of generative AI, the large language models. That was, like, I don’t—that’s a bit of automation, but the underlying concern was copyright, right? Which is a major issue, right? Because it—you know, gen AI is trained on the entire internet. They just go read everything, you know, at speeds that exceed human capacities. So the question is, well, what’s the relationship between that and all the imaginative content that these and other people have produced that the AIs just hoover up? So that strike had multiple dimensions to it, and not all of them had to do with automation, for sure. FASKIANOS: Sharon, anything to add? BLOCK: Yeah, I think that that’s right. Obviously, we’re seeing litigation by content creators, many of whom are members of the Writers Guild, in order to get at this issue of their intellectual property rights vis-à-vis the use of these—the use of that content by the large language models. So I think we are going to continue to see many different fronts in the introduction of AI into the workplace, and as it impacts workers in different ways. So but to just to answer the, the part of the question about privacy, we have a very, very weak privacy regime vis-à-vis the workplace in the United States. And so you really—in the private sector. Now, that’s different in the public sector because you have a constitutional dimension to privacy in the workplace with public sector employers. So some of this might sound—might sound different than your own—than your experience, since folks on this call are from the public sector.  But in the private sector, we don’t really have an institution of privacy protections—as we now have AI surveillance of things like, you know, your email. There are employers now who very easily can just scrape every email that you write to find out all kinds of things about you, and you probably don’t even know it. That can watch you through the camera on your laptop when you’re working from your home. So I think these privacy concerns aren’t new in the workplace. But I think they’re going to be appreciated by, I hope, policymakers, but also by workers in a new way, as we see different uses of AI in the workplace. FASKIANOS: Great, thank you. I’m going to go next to Nate Belcher, who is a fiscal analyst for Arizona Joint Legislative Budget Committee: UAW included a thirty-two-hour workweek with no pay reduction as one of their bargaining points in their recent negotiations. Do you think that reducing the length of the workweek will become a more popular demand from labor in the coming years? BLOCK: Yes. I think—I mean, I think we’re seeing it already. I mean, I would say just a few years ago there was almost no serious discussion of a four-day workweek. That is now an issue that is on the table. I don’t know of any workers who have secured a four-day workweek through collective bargaining. There are certainly employers who, of their own volition, are experimenting with shorter workweeks, sometimes with four-day workweeks. You know, I don’t think that many people thought that the UAW contract at the end of the day would actually include a thirty-two-hour workweek.  I think it was put on the table as just another way to discuss hours. I mean, what was really an issue in the UAW strike I think around hours was the fact that many, many workers were being forced to work a lot of overtime. And even if they were getting paid for that overtime, it was having such an impact on their quality of life that it was really an entree to talk about what it is like to have those kinds of time demands, and what workers want in terms of having some kind of balance in their lives to be able to do with their time what they want. But I think the thirty-two-hour workweek is a conversation we’re going to continue to see bubbling up. FASKIANOS: Thank you.  Next question from Paul Egnatuk, who is the legislative aide in the office of the Michigan State Representative Jim Haadsma: I’ve heard recently of brick-and-mortar type investments stalled because investors are enamored with AI ventures. Can you recommend sources of research on the impact of private capital going toward AI development and/or where capital may be short for other pressing needs? SPENCE: Right, this is complicated. I mean, so, you know, there’s a massive amount of money going into AI. So some of the valuations are probably a little bit off the chart and, you know, that’ll get corrected over time. Some of us will remember the internet bubble, which had some of the similar characteristics. But that doesn’t mean there’s nothing there. But, you know, if you look at, I mean, vis-à-vis the previous subject, you know, hybrid working is becoming a very prominent feature of a subset of the economy where you can do that, right? And, you know, if you go into New York now and go into an office on Friday—you know, you’re very likely not to find anybody there. I mean, my friends tell me, don’t even bother. You know, so that doesn’t mean the work week is shorter, but it means, you know, that there’s substantial changes in the real estate sector and, you know, excess capacity of one kind, people—economic activity is moving around. I mean, on the whole, I would say the investment situation in the United States is reasonably healthy. You know, for the first time we have sort of major investments in infrastructure, you know, that have been funded by the government. And the CHIPS and Science Act has some more major investments, some of it designed to bring activity at home. And then we have the Inflation Reduction Act, which is designed to put, you know, funds into the energy transition in pursuit of sustainability. So when I look at the whole—I mean, there’s imbalances all over the place because of these structural transformations. And I’m sure we could find places where there’s significant deficits. But on the whole, I think the investment program, you know, or the investment situation looks moderately healthy. You are going to see just huge investments in the digital technology side as people pursue this set of opportunities. FASKIANOS: Sharon. BLOCK: Yeah, I don’t think I have anything to add. I mean, it is—it does feel like we are seeing more manufacturing jobs. I think we’re all—having come out of the Biden administration, I’m really excited to see sort of the full implementation of the Inflation Reduction Act and the CHIPS and Science Act. We just—I think, last week the president visited a site of the first—like, one of the first major investments. So I think that might balance out, you know, the kinds of trends that the questioner was raising. FASKIANOS: Emily Walker, who’s legislative director for Pennsylvania Senator Katie Muth, asked: Can you talk a little bit about the wave of organizing that’s been taking place in southern United States recently? BLOCK: Yeah, happy to. It’s a very interesting dynamic. So a couple of different trends. There has been a concerted effort, particularly driven by SEIU, Service Employees International Union, to do some kind of innovative organizing in the South. You know, the South is a very challenging place for the labor movement. Has been for a long time. And so there’s been a push to not do traditional union organizing but just try to get as many workers engaged in collective activity without necessarily using the traditional model of an NLRB election for majority exclusive representation within their workforce. You know, the South now is pretty much universally right to work, which just makes it a very challenging environment for traditional union organizing. So I think we’re going to continue to see these kinds of innovative campaigns. They’re really more like campaigns than organizing drives. The counter to that, though, is, like in the Starbucks organizing, there’ve been about more than 300 Starbucks stores that have unionized, and a number of those are in southern states. The South has not been able to sort of put up that wall to union organizing, at least among the Starbucks organizing, that they have in terms of a lot of other sectors. But the other dynamic, which it’s too early to know whether it’s going to be successful or not, but is what I raised at the outset about the UAW’s intent now to organize the transplant car companies. Almost—not all of which, but which predominantly have located their manufacturing in the South. And we also have—Ford is building the Blue Oval Plant, which is going to be, I think, one of the largest auto manufacturing plants in the country, if not the world. And they have now made a commitment to not try to stop the union from coming into Blue Oval. So that’s in Mississippi. That is going to be a union plant. That’s a big deal. But then the big question is going to be whether the UAW can organize other car companies that are not union in this. And I’ll note, they’re not union in this country. Most of these companies have unionized workers everywhere else in the world. And they seem to figure out a way to make money in plants in other countries with unionized workforces. They come here, and they fight the UAW sort of tooth and nail to keep the union out of their plants here, again, which are mostly located in the South. So, you know, we’ll see. I think after this most recent UAW strike, underestimating the new president Shawn Fain is not a good idea. He did things in this strike that nobody thought he would be able to pull off. So I think, again, one of the big stories in 2024 is going to be whether we’re going to see inroads for labor in the South, particularly through these auto companies. FASKIANOS: Thank you. And I’m going to sneak in one last question from Charisse Childers, director for Arkansas Division of Workforce Services: Michael stated it is not possible to think that robots can operate on their own. Do we have employment data on jobs that were added solely in conjunction with added technology? In the same vein, jobs lost solely in conjunction with technology, meaning robots? SPENCE: So, I mean, this a little bit nerdy, but, I mean, robot—human beings, you know, especially people who actually make things and, you know, do things in a physical environment, have, you know, an extraordinary capacity that robots don’t have. Which is an ability to absorb a rapidly evolving, you know, external environment, you know, visual and other signals, essentially with no latency. Robots aren’t even remotely close to that. And if you want evidence of it, look at the, you know, challenges facing the autonomous vehicles. You know, they do fine in highly structured environments, you know, where, you know, you’ve painted all the lines on the road, or you’re in a parking lot, or something like that. And then you put them in sort of an unusual situation, and they drive into a pile of cement or, you know, the emergency responders don’t know how to deal with them, and so on. You know, in other words, in unstructured environments, you know, the robots basically need help navigating around, even if they have the mobility and, you know, manual dexterity, and other things that are other dimensions of robotics. There’s people working on this problem, but I think, you know, this is an example—you know, one of the many—in which I think robotics and people are going to work together. You know, and you’re not going to see full automation. Maybe in structured environments. I mean, you see some of it—you look at—it’s not just manufacturing. You look at a, you know, major distribution center, an Amazon distribution center, there’s—you know, there’s a lot of robots. And this isn’t very snazzy technology. They just don’t bump into each other and they go collect things and bring them to the people who pick and pack them, scan them, and so on. So, you know, there’ll be progress in this. But my—having spent some time talking with AI people, I think that, you know, full automation, except in highly structured environments, is a fairly long way away. And we’re going to see mostly human—you know, human-machine kind of collaboration and those environments. And there are a lot of them. I mean, you know, if you go outside distribution centers and manufacturing things, and highly structured, you know, roadways and whatnot, pretty much everything else is unstructured, right? Hospitals, et cetera, so. FASKIANOS: Thank you. Well, unfortunately, we are out of time. But this was a terrific discussion. So thank you, Sharon Block and Michael Spence. We appreciate it. And to all of you, for your questions. We will be sending a link to the webinar recording and transcript, as well as some of the other resources that were mentioned. You can follow Dr. Spence’s work on CFR.org and Professor Block on X, formerly known as Twitter, at @SharBlock.  And, as always, we encourage you to visit CFR.org, ForeignAffairs.com, and ThinkGlobalHealth.org for the latest developments and analysis on international trends and how they are affecting the United States. Of course, please do share your suggestions with us for future webinars and any ideas on how we can help you in the work that you are doing in your communities. You can email [email protected]. We wish you all a happy holiday season. And we look forward to reconvening this series in fiscal year—or, actually 2024, which is right around the corner. So, again, thank you both. We really appreciate it. SPENCE: Thank you. Thank you. (END)

Thomas J. Bollyky, senior fellow for global health, economics, and development and director of the Global Health program at CFR, leads a conversation on observations and lessons learned from states’ public health responses to the COVID-19 pandemic.  TRANSCRIPT FASKIANOS: Thank you and welcome to the Council on Foreign Relations State and Local Officials Webinar. I’m Irina Faskianos, vice president for the National Program and Outreach here at CFR. We’re delighted to have participants from fifty-one states and U.S. territories for today’s conversation. Thank you for taking the time to join us for this discussion, which is on the record. CFR is an independent and nonpartisan membership organization, think tank, publisher, and educational institution, focusing on U.S. foreign and domestic policy. CFR is also the publisher of Foreign Affairs magazine. As always, CFR takes no institutional positions on matters of policy. Through our State and Local Officials Initiative, CFR serves as a resource on international issues affecting the priorities and agendas of state and local governments, by providing analysis on a wide range of policy topics. We are pleased to have Tom Bollyky with us for today’s conversation on public health and lessons learned from the COVID-19 pandemic. We’ve shared his bio with you, so I will just give you a few highlights. Thomas Bollyky is the senior fellow for global health, economics, and development at CFR, and the director of CFR’s Global Health program. He’s also an adjunct professor of law at Georgetown University, and a senior consultant to the Coalition for Epidemic Preparedness Innovations. Mr. Bollyky is also the author of the book Plagues and the Paradox of Progress: Why the World is Getting Healthier in Worrisome Ways, and the founder and editor of Think Global Health, an online magazine that examines the ways health shapes economies, societies, and everyday lives around the world. So, Tom, thanks very much for being with us today. You recently co-authored a report on COVID-19 pandemic policies and behaviors. I thought you could talk us through the differences in public health responses that influenced states’ infection and mortality rates, and what you came away through this research for recommendations for future pandemics. BOLLYKY: Great. Well, thank you, Irina, for the kind invitation to be here and that nice introduction. It is—this is, I think, my third time, maybe fourth time, speaking to the State and Local Officials network. And it is one of my favorites in terms of a resource at the Council. I always learn as much from these discussions as I think I am able to impart, so I’m really looking forward the chance—to the chance to speak with all of you. And congratulate Irina and team for pulling together such a useful network. What the thing we’re here to talk about today is—it is—Irina, are you making faces? Is my internet causing trouble? FASKIANOS: Yeah, your internet—I was like, oh, no, his internet is freezing. So— BOLLYKY: Hmm, ah. Well, let’s keep going. FASKIANOS: Let’s keep going. BOLLYKY: And perhaps at some point I will turn off my video and do it just with the audio if it remains a problem. But apologies for that. Again, this paper appeared in Lancet six weeks ago. It’s a year-long study, the product of five different institutions. And I had the pleasure of co-leading that group. And it—what it was meant to look at is what explains the very large differences we have seen between how states, U.S. states, performed in the pandemic. And I think it’s been underreported, but perhaps not a surprise to this group, that while the U.S. overall struggled in the COVID-19 pandemic, not all U.S. states struggled equally. There is, in fact, a nearly four-fold difference in cumulative total COVID deaths from the worst to best performing U.S. states, even once you adjust for all the relevant biological factors—differences in the age of the population or key preexisting health conditions. For most of the pandemic, states like New Hampshire, Vermont, or Washington have actually posted COVID-19 death rates that are comparable to countries in Scandinavia, like Denmark, or in Europe, like Germany. While mortality rates from some other states have actually rivaled the worst-performing countries in the world during the pandemic—Russia, Bulgaria, and Peru. That difference, between top performers and poor performers, is large in health standards, even by American standards. For instance. The U.S. states with the shortest average lifespans come nowhere close to matching Chad, Nigeria, or the worst countries in the world on that measure of longevity. The state variation, though, is a reason for hope. Because if poorly performing U.S. states could more closely match their more successful counterparts when the next health crisis emerges, many lives might be saved. One estimate we have from that Lancet study is that if every state had performed as well as New Hampshire, the second—state with the second-lowest COVID mortality rate—there would have been 504,000 fewer U.S. deaths from COVID-19 during—just during our study period. That would have made the U.S. again, in terms of overall death tolls, very similar to other high-income countries, as opposed to one of the worst-performing countries, which is sadly where we were. I’m going to pull out just four specific themes about what drove those differences, and then I’m going to save most of the discussion about what do we do for this, because I really do intend for those to be mostly a conversation about looking forward and how do we respond to this. But four themes that came out from our analysis in the Lancet. One is—or, theme number one is that the role of health equity, socioeconomic and racial disparities, loomed very large in this pandemic. Larger than it does in many other—even larger than it does in many other U.S. health measures. So what we—what we saw was a cluster of factors—low educational attainment, limited access to high-quality health care, the percentage of people living below the poverty line—had a strong association both with differences between states, and their infection rates, and in their COVID-19 death rates. In many ways, this reaffirms what we’ve seen in the past, that these disparities played a large role in H1N1 and the response there. These disparities combined with racial disparities, which were also significantly associated with state variations in our study, also play a role in differences in seasonal flu vaccination. It’s not just in pandemics or infectious disease. Of course, in other health crises,­ you see these social, economic, and racial disparities loom large. And it will be important to proactively seek to mitigate these differences ahead of the next emergency. And we can talk a little bit about in the discussion of ways to do that. All right. Theme number two that came out from here. Trust, interpersonal trust in particular, played a large role in this pandemic in the U.S. Interpersonal trust, if that term isn’t familiar to you, is the trust we have in one another. And it is actually a finding that has been shown also in many international studies. For example, we did a—the same group did a study in the Lancet the year earlier on the global level. And we were unable in that study to find any connection between country variation and COVID outcomes in many of the leading theories or pet theories of what made a difference in the pandemic—like economic inequality, or pandemic preparedness metrics, or democracy, what have you. We didn’t find any links. But interpersonal trust had a very large and significant association with differences in how countries did. We see the same thing in the U.S. context, that the trust—how we feel about one another, the trust we have in one another, is tied to vaccination rate­s and adoption of health-protective behaviors. And that, in the end, has a large tie to the outcomes and how states did. Meaning that when confronted by contagious novel virus, government—most effective ways for governments to protect their citizens is ultimately by convincing them to protect themselves. And their willingness to do that, particularly in free societies and in U.S. states, depends on the trust we have in one another. And that’s going to be important to foster stronger in the future in thinking about how we respond to these things. Theme number three: The role of politics was nuanced in this pandemic. There is a perception political parties mattered a great deal in the response to this pandemic. But at least from our study, there is no association between the party of the leading state official, or state governor, or, in Washington, D.C.’s context, mayor, and COVID deaths. In fact, out of top ten states that did best, half—five of them are Republican and—five of them are led by Republican governors and five of them are led by Democratic governors. That said, there is certainly a role for politics in this pandemic. And the degree to which states voted for a particular candidate in the last election does seem tied to the adoption of health-protective behaviors, and vaccination rates, and the application of mandates. And that does seem to have had some effect. Which brings me to the last theme to draw out, which is mandates. And by mandates, I mean bar and restaurant closures, gathering restrictions, mandates around vaccination use—or, vaccination, or mask use, or stay-at-home orders. What we find in this study is that the package of mandates, or the broader use—because states tended to use many of them together, and nearly all states used some mandates in this pandemic, usually for roughly—for about a sixteen-month period. And what we found is they were generally associated with fewer infections. But it was vaccine mandates that had the largest effect on deaths. And there’s been a discussion around tradeoffs in this pandemic. We did find some. There weren’t any tradeoffs between overall economy and the adoption of health protective measures, but there were some tradeoffs particularly on restaurant closures and employment and there were some tradeoffs on educational performance in this pandemic. It will be important in the future to adopt—to apply these mandates in a way that they target the most vulnerable and are designed in a manner that it promotes getting back to work and getting into schools as soon as possible. They will also be important to combine with mitigation measures for the period in which they are in place. We can, again, talk a little bit about that. But those are the four themes to start us off, to draw us out. I’m really interested to hear about the experiences you all have had in the pandemic, and questions you might have about this study. And I will put the link to the study in the chat, if it’s not already available to attendees. Irina, do they have it already? Sorry, you’re on mute. FASKIANOS: Oh, can you hear me now? BOLLYKY: Yes. FASKIANOS: Great. Yes. They do have a link to the report. So we did send it out in advance. BOLLYKY: Great. FASKIANOS: So that’s great. I’m going to—now it’s great to turn to all of you. Again, this is a forum to share best practices, ask questions, and whatnot. And I want to go first to Dr. Jonathan Ballard, who’s the chief medical officer in New Hampshire—the New Hampshire Department of Health and Human Services in the office of the commissioner, since, Tom, you mentioned New Hampshire being in second—the second good story. I guess Hawaii was number one. So it would be great if you could just react and maybe share your thinking of what you—what else you will do in the future, Dr. Ballard. And if you accept the unmute prompt, that would be great. There you go. Q: Thank you, Irina. Thank you. So the question I have is around health equity and the diversity of the population. So some of the questions I have, particularly around your study, is does this study adequately adjust for the disparities in—related to health equity that we see between New Hampshire? New Hampshire’s one of the healthiest states in the country. And so, you know, the theory is that, well, you’re already a healthy population, you do not have obesity to the degree, you have lower smoking rates, you have high rates of physical activity in New Hampshire. And so is that—was that taken into account already into your study about why some states are performing well? Was it the underlying population was already healthy or not? I would conjecture that it’s not—it’s not simply that underlying fact, because there are several states in your report that are just as—nearly as health or heathier than New Hampshire but did not have the same outcome with the mortality rate. And I think that there several things that New Hampshire did do that was quite protective and did kind of go against the strain of what the national guidance was. Each time there was a recommendation that came out from the CDC or any other national body, we did look at it carefully, and noting particularly the recommendations around the vaccination priority populations. New Hampshire did not follow the national guidance on vaccinating frontline workers. We did a different approach. We looked at social vulnerability index and vaccinated those who had the highest risk of social vulnerability—of vulnerability, but then also looked at—made a big effort to vaccinate the other vulnerable populations, those in congregant facilities, nursing facilities, and other locations. And New Hampshire was the first to get to kind of whatever number you would—each state would get to with its vaccination rate. We had a lot of emphasis on speed, on delivery of the vaccines, and very seldom had any in reserve during the early months. They were all used. And I think a lot of that relates to what you talked to around the interpersonal trust, resulting in us being fastest to get the vaccines out. New Hampshire’s known as a—you know, the live free or die state, and individual liberty, individualism. But we didn’t have a lot of the culture wars. We’re a purple state. We have split government as far as state government versus our federal delegation. And we just didn’t see vaccines getting caught up in that, especially early on. So I just wanted to stop there and, Thomas, would be appreciative of your response on the was—what were the adjustment rates that you used, and did it account for just these healthier states did better, or not? BOLLYKY: Great. So the first one it’s a relatively quick answer, fortunately, which is the adjustment, it does, in fact, account for BMI, it accounts for rates of diabetes, cardiovascular disease. Really, an expansive view of the key comorbidities that might have made a difference in how states performed in the pandemic. So it is adjusted for that. And, of course, it is adjusted for age. I would draw out a couple things at least from our study, but obviously you lived the experience so I take your insights more—as seriously. But, you know, New Hampshire, as a state, is a little healthier than other states. Though New Hampshire’s average life expectancy at birth actually only ranks twenty-third in the U.S. out of states. So it’s around the middle. And its performance in this pandemic was better than that metric might have suggested. There are a few—about New Hampshire. It does have the lowest poverty rate, or percentage of population under the poverty line. It has the highest levels of interpersonal trust in the country. It has relatively few uninsured. Reasonably—among the top ten in terms of access to quality health care. It is also, you know, not a—as states go—not a particularly diverse state in terms of its racial makeup. But the—what people identify as in the U.S. Census. However, as you rightly pointed out, one of the things we’ve—in a follow-up piece that we wrote—pointed out that to the extent that New Hampshire does have social, economic, or racial disparities, the state was quite aggressive about addressing them in its vaccination program. And that seems to have made a large difference as well. In terms of our research, or talking to local officials, also they reaffirmed the view that you had put forward about a strong partnership between states and local communities in terms of enabling some of the local actors to have some agency to respond to what they were seeing as well. But we highlight New Hampshire, in terms of an example because, of course, unlike Hawaii it is not an island. But there is a lot—you know, New Hampshire has many advantages but again, as we pointed out, the health circumstances has some challenges too. And through aggressively addressing some of those challenges, the state did well in this pandemic. And hopefully more states are able to match it in the future. FASKIANOS: Thank you. So we have two questions on interpersonal trust, which I will—I will ask together. So the first one is from Colorado State Representative Parenti. How were levels of interpersonal trust measured? And then, from Alder Regina Vidaver in Madison, Wisconsin, she asked: What are evidence-based approaches to improving interpersonal trust? BOLLYKY: Great. So two fantastic questions. I will start with how we—the data sources we used for interpersonal trust in this study, and then I’ll just briefly reference how it can be measured more broadly. So the short answer is surveys. We have a set of surveys reflecting nine thousand respondents throughout the country, all conducted in 2019. Those surveys asked the question: Do you—how often do you trust others to do the right thing? The responses coded for most of the time being high levels of interpersonal trust. This would seem like a subjective question, but surveys—social scientists have been actually asking that question since the 1950s internationally. And you would be amazed how stable the values are for countries and communities. So that is the way people measure interpersonal trust through surveys. There are also, of course, experiments people do to measure them in a community, or they look to proxy behaviors that are suggestive of interpersonal trust. We use for this—for this study surveys. Now, what would you do with it? Well, a couple of things. Or, what’s the evidence-based interventions for interpersonal trust? First thing I will say is the government of Denmark actually monitored trust at the community level throughout the pandemic and adjusted its public health interventions to reflect those changing levels of trust. That’s just running a survey at the community level. Not cheap, but not impossibly expensive. But to give you an idea, for instance—because they convinced people that they will not the only who is vaccinated, that there won’t be holdouts. But in low-trust populations, they have the opposite effect, where they tend to inculcate hostility and a reaction. So that was used to tailor public health policies for different populations, just to give one example. As a general matter of how you build trust, and how you identify where there is low trust, and what you need to do differently to respond to that in the future. But hopefully that gives at least a start of the conversation around trust. FASKIANOS: Thanks. All right, the next question, we’ll take an oral question from Pennsylvania Representative Arvind Venkat. Q: Hello. My name is Arvind Venkat. I’m a state representative in Pennsylvania. I’m also an emergency physician. I had two questions. One is on did you distinguish in a large state like Pennsylvania, when you’re looking at it, between urban—or, among urban, suburban, and rural areas? Because the response in all of these area was very different in our state during the height of the pandemic. And the second question is, what specific legislative recommendations do you have coming out of your study? Thank you. BOLLYKY: Great. We did look at population density, but we only looked at population density at the state level. So the study in general functions at the state level. We don’t look at whether it’s at the ZIP code level or the community level. So that will have to be a future study. I will say population density, as the pandemic progressed, was less meaningful in terms of having a tie to either infection rates or deaths. And perhaps that might make sense from what we—what you’ve seen, what others—what we all have seen in the rural communities and how the pandemic experience has changed in those over time. In terms of legislative approaches, I think there are a few. I do think it’s important for states with high rates of uninsured, or states that have not extended Medicaid use or are reversing those policies. The study suggests that rates of uninsured did have a significant association with how states performed in this pandemic. Perhaps not surprisingly, and high death rates. So those are one area. Another is we did see an association between states that had adopted more generous family leave policies, or personal leave policies, and infection rates as well. And it will be important, whether they’re adopted on an ongoing basis or adopted in a manner that allows them to be expeditiously exercised in a health crisis, or extended in a health crisis. It’ll be important to have those structures in place. As I mentioned, whether it’s on politics or on social, economic, and racial disparities it’s really important to have ongoing community engagement, or to build these partnerships between state officials and community organizations or faith-based organizations. That’s perhaps less of a legislative matter, but certainly a matter of appropriations. And it’ll be important to have those partnerships established ahead of a crisis, because it is difficult to build them and use them and harness them effectively once the crisis has begun. But great questions. Thanks for participating in today’s call. FASKIANOS: So the next question is a written question from police chief Patrick Finlon, who’s in Village Cary, Illinois. And I’m not sure that this is in your area, Tom, but I will ask it: What were your findings related to the ability/desire to use/exercise governmental authority related to the shutting down of businesses and the application of constitutional provisions? I’m in law enforcement, and our risk management provider advised us not to close businesses for fear of a potential civil rights violation. BOLLYKY: Well, in terms of—what I can use on the use of mandates, in general, is there—although underreported—there is actually a surprising level of uniformity across states. There’s a perception that some states locked down and other states didn’t, and that that tends to vary politically. As an initial matter, lockdowns or use of mandates, rather, at the state level really over occurred over a sixteen-month period. Virtually all states from March until June of 2020 used some policy mandates. Where really you started to see the big differences in the outset of the Omicron wave, between some states reimposing them and others doing less so. But there’s a lot of uniformity to that at the state level. I will—I will forgo the—opining on the legal merits of the adoption of these, but there have been, of course, a good number of cases that have worked their way through the courts, some of which have gone to the Supreme Court, and they point to a few lessons on, you know, public health authorities/powers, and where they draw from and what they extend to. But, again, I will save that for a more legal discussion. FASKIANOS: Thanks. We’ll take the next question, raised hand, from Georgia Representative Imani Barnes. Q: Hello. Thank you for having me. I don’t think I can turn my camera on. But I was wondering, what type of educational data did you gather from this study? I was wondering the data compared to New Hampshire with other states that—I wanted to understand the disparities, educational disparities, that you gathered—the data that you gathered for educational disparities. And what suggestions do you have to mitigate the learning loss that the children experienced during virtual learning? BOLLYKY: Great. So the educational data we used for is average educational attainment. Again, like our metrics in the study, it is statewide. So by disparities, we’re talking the difference between states, and that average level of educational attainment. It does—didn’t matter a great deal in terms of showing differences between how states performed in this pandemic. Levels of—or access to high-quality health care or percentage of people below the poverty line does seem to have a pathway through vaccination rates, that states with lower rates of—or, a lower average of educational attainment had lower vaccination rates, by and large. So that’s the way we address that. On the learning gap question, I think the real answer is people don’t know as of yet, in terms of we haven’t really had a disruption of this duration and length before. So there are theories of what matters, from tutoring to, you know, more extended engagement or programs with students that fell behind. What I can say from our study is that the tradeoffs on the educational side were significant. All states suffered from an educational standpoint in this pandemic. Some states suffered more than others. It is unfortunately true that the same racial disparities and socioeconomic disparities we see in educational attainment, by other studies that have been done, suggests those were exacerbated in this pandemic. So it will be important to redouble and be aggressive about addressing those gaps. FASKIANOS: I’m going to take the next written question from Crystal Goodwin, who is with the Texas Council for Developmental Disabilities, and serves as a public health and disability integration specialist: If this were something that—if this was something that the study looked at, did the findings show any difference among states based on disability status or disability services offered? Something we found during the pandemic, and studies show, that individual with intellectual and developmental disabilities as a comorbid condition were in the top three of deaths here in Texas. BOLLYKY: I wish it was something our study looked at. It’s an important issue, and I really appreciate you raising it as something that deserves more attention, both by my colleagues and I but others in the future. So thank you for raising the question and, unfortunately, it was not in our study. But I wish it had been. FASKIANOS: It can be the subject of your next study. BOLLYKY: Indeed. FASKIANOS: Let’s go next to W. Abdullah Brooks with a raised hand. Q: Hello. This is—yeah, I’m W. Abdullah Brooks. I’m actually standing in for a representative from the state of Maryland, Scott Phillips. In full disclosure, I’m a faculty at the Bloomberg School of Public Health at Johns Hopkins, and with a background in infectious disease and global public health. First of all, congratulations on a brilliant study. And I haven’t had time to go into a deep dive, but I had just two questions that maybe you could elaborate on, if they’re not in your paper. One is, you talked about the correlation with employment and health outcomes. And given the structure of health care access in the U.S. often being tied to employment status, I’m wondering if you adjusted for access through, for example, those who have public assisted health access. Just to look at the question of health equity or equity in health outcomes, and whether or not there was any difference between those who are on public assistance, had access to public—to health access, hospital, and so forth, versus those who only had access through private insurance. That’s one question, just getting at the issue of equity of outcomes. The second, you have a reference to interpersonal trust. And during the beginning part of the COVID pandemic, the American Society of Tropical Medicine and Hygiene held a series of discussions around this and looked at specifically the issue of trust towards health experts—trust or distrust. And I’m wondering whether or not your paper looks at this specifically with regard to health communicators and health communications, and whether or not you gleaned any insights into messaging. And, you know, whether there were better or worse strategies with respect to trying to get messages regarding, you know, responses to the pandemic, and access to things such as vaccines. Thank you. BOLLYKY: Great. Thank you for such a rich group of questions. And thank you for the kind words about the study. On the employment side, the employment results are fascinating in the study, in that by and large most of the use of policy mandates are not associated with differences in employment. There is an association, in particular, with restaurant closures, which perhaps not surprisingly, given that sector. But there is an association between higher infections and higher employment. And that actually reaffirms what we’ve seen in other studies of the economic impacts of the pandemic. That it may have been less a matter of policy in terms of differences in economic impacts, and more in the responses of the population. So, meaning people that stayed home more cautiously, whether the state ordered you or not, had broader economic impacts. As a general matter, economically what you see in the pandemic is often a fair amount—and this is perhaps why the GDP levels aren’t shifted—or, have no association with the degree of public health response—is that you’re largely shifting economic activity between sectors. So less activity in restaurants and bars means more grocery. And you see some of that shift where all states suffered in the pandemic economically, but it tends to net out, to some degree, in terms of the various sectors positively and negatively affected. In terms of equity in the private and public insurance, we do include both public, private, and out-of-pocket spending—estimates of out-of-pocket spendings in our measure of health spending. We, unfortunately, do not break them down and see how the results might be different depending on the level of spending between each. But that too, like Irina suggested before on the disabilities, would make for an interesting follow-up analysis. So thank you for proposing it. On the trust in health experts, we do look at trust in government. Now, that is not—and we also looked at trust in science in the studies. Both of them also the product of surveys. As you rightly perhaps intimated, you know, trust in government does tend to vary by agency and area. There have been some good studies that have come out that have looked at trust in health authorities. And what you have seen are declines, particularly in trust in state governors, trust in federal health authorities. What I’ve—from what I’ve seen from multiple surveys or studies of this kind, what has really held up are your family physician. Local hospitals, local health clinics still enjoy high trust. They enjoy it across political lines. And that too may be something we can seek to leverage in the future but would be a different lesson than we’ve had in the past, where we have really emphasized having one voice speak in a pandemic, having it be at the federal level, perhaps having it be CDC. What the lessons of this pandemic suggest is that we need more community and local engagement, engaging trusted health sources of information. FASKIANOS: Thank you. I’m going to take the next written question from Commissioner Keith Baker from Colorado. Was the level of interagency—county, municipalities, healthcare, school districts, et cetera—coordination and collaboration evaluated in your report? And were there any lessons drawn from that? So we have another question too on this, about, you know, measurement of the level of intergovernmental cooperation and outcomes. BOLLYKY: Great. Thank you for the good question. No. I haven’t seen a good standardized data source of measuring the cooperation that occurred in the pandemic. There are different measures of polarization people have looked at, but they typically look at the legislature, state legislature, or surveys of the population and how polarized they are on particular issues, or politically. But the interagency cooperation’s an interesting question. But I have unfortunately not seen it well measured, particularly across U.S. states. FASKIANOS: All right. So the next question I will take a written—I see no more raised hands, so I will continue to go for our written questions. Next one from Vice Chair Mary Alford from the Alachua County Board of Commissioners, in Alachua County, Florida: Was good information found in states like Florida, where information shared was of questionable accuracy? How was that information treated—margin of error, sampling from other sources, et cetera? BOLLYKY: Great. So in terms of our study, we do—these are estimated death rates and infection rates. They do tend to be backed up by a variety of sources, including both state-reported data but also zero-prevalence studies and peer-reviewed data, is what we used from that. So that’s how we tried to adjust for the fact that some states may not have been reporting as actively or as rigorously as others. FASKIANOS: All right. Next question from Ellyan Veronica from the Puerto Rico Senate: What data did you find regarding unvaccinated people who suffered violations and interference in educational, medical, or other services by their vaccinated status? Not sure—Senator Martinez, do you want to ask your question? Maybe clarify it a bit? OK. Don’t think—oh, if you unmute yourself, you can clarify. No, that is not working. OK. Q: Yes. FASKIANOS: Oh, good. Thank you. Q: OK. Yes. I’m referring that what is the data did you find regarding the unvaccinated people who suffer interference with their educational, medical, and other services because they didn’t want to be vaccinated? Did you study that matter? BOLLYKY: We did, actually. So we look at vaccine mandates for state employees and vaccine mandates for school employees, and both their association with health outcomes, infection rates, and death rates, as well as whether they have any tie to shifts in employment or in lower educational performance, particularly for fourth graders. We used NAEP test scores. On infections and deaths, they are very much associated with lower rates of both. State employees, of course, it will not surprise people on this call, represent millions of people in the United States. So it’s not a small group. And you do see a strong association with fewer deaths from the use of those mandates. We did not find any tie between the use of those mandates and lower state GDP or lower employment. So nothing on the economic side. You do see an association with lower math test scores. However, almost all mandates were associated with lower math test scores. And what our theory there—so this includes things that have, you know, restaurant or bar closures—. And so the hypothesis is that association reflects the caution in the population. People who were less likely to send their children to in-person schooling, those children tended to—or, those states where that was happening at a greater rate—to do more poorly educationally. Because math is something that, I can say as a parent myself, parents don’t teach as well as the school settings do. So it really does seem to be a stronger tie between in-person schooling and better math test performance, at least for fourth graders. Sorry, that’s a long-winded answer. But most of what you could say is, no, I don’t see any educational, economic, or deleterious health outcomes from those vaccine mandates. FASKIANOS: So I’m going to take the next written question from Dawn Gresham, who is a community liaison in Senator Liz Krueger’s office of New York Senator Liz Krueger: It seems as though it would have been helpful if messaging had communicated that there would be saves in community infection levels requiring additional safety measures to be followed at times, and relaxing safety measures where possible. Because this did not happen, it made it more difficult to discuss reinstating certain measures when it would have been helpful. Can you share thoughts on best practices for handling communication? And, Tom, I’m going to add onto that. I think we’ve seen some backlash against other vaccines because of the experience of COVID-19, which could be potentially alarming for things that we have not had problems with, because vaccinations have been measles, and whatever, and how we deal with that. So can you talk about messaging and vaccines going forward for other diseases? BOLLYKY: Great. So on the communication side, I completely agree with the questioner on the premise that we struggled to educate the population on the fact that this was likely to evolve and to change. That is actually—there have been a relatively large literature on communication in this regard. And this ties to the earlier question we got about trust. In addition to monitoring levels of trust to try to tailor programs to low-trust communities, we do have good research on communication strategies that preserve the levels of trust you already have. So less on how do you build it in crisis, and more about how you slow its erosion. And one of them is—or, two of them are related to your question. One is transparency. So saying the quiet part out loud. For instance, there is a great study that looked at—they presented two groups of individuals with—or, two groups of individuals, rather, with information about a hypothetical vaccine. One of those groups received information about—that was vague about the side effects but suggesting that there may be some but somewhat vague about what they were. Another was very specific about the range of things you might find in those circumstances with the vaccine. And what you found in that is not that you had a higher rate of people willing to take the vaccine between those two populations, but the population that received more detailed and complete information expressed higher levels of—or, more sustained levels of trust in the health authorities that provided it. Suggesting, again, that transparency is important, but also—and this is the second lesson—trusting the population. In order to be trusted, governments have to be trustworthy, but they also need to trust the population to be able to understand what they’re communicating. And that is something we struggled with throughout in this pandemic. FASKIANOS: Thank you. I’m going to go next to a raised hand from Paul Rotello from the city of Danbury in Connecticut. Q: Thank you. Yeah. Paul Rotello, City Council, Danbury, Connecticut. Connecticut, in terms of geography, is one of the smaller states. In terms of population, it’s relatively moderate. I think it’s about thirtieth. Both Vermont and New Hampshire are not particularly big when it comes to geography, but they’re much bigger than Connecticut. Their populations are quite a bit smaller. So I was just curious as to what—there seems to be a little bit more elbow room, or maybe a lot more elbow room, in Vermont and New Hampshire, compared to Connecticut. I was curious as to what density played in your statistics and your analysis. And how would you even go about figuring that, because while you can live in a somewhat agrarian community, you may spend a lot of time in town at diners, and post offices, and things like that, or even at jobs? How do you tease that out? And were you able to tease that out? And did you see a difference? Thank you. BOLLYKY: Great. Well, I’m happy to get the question. I actually grew up in Stamford, Connecticut. So I know Danbury quite well. I went to high school in Fairfield. And so it’s nice to meet you and have this engagement on this. Connecticut, as a state, actually does well in our study also. It is ranked seventh in terms of standardized deaths. So, again, adjusting for the biologically relevant factors. We did not see a strong tie between population density and infection or deaths in this study. The reason why is over time—in the beginning, it mattered, in terms of the spread of the virus to communities in the initial wave of the pandemic. But over time it was more around economic geography. Congregant housing, people—percentage of essential health workers, people with a greater ability to avoid people that are infected or isolate on their own is tied more to economic geography than the population density. So there are some fairly rural states that don’t do well in this study because of, we suspect, these broader questions of economic geography. FASKIANOS: I’m going to take the last question from Alison Despathy, who has raised her hand, from Vermont. You need to unmute yourself. Q: Thank you. FASKIANOS: There we go. Q: OK, good. All right, thank you so much. So I’m here in Vermont. And my question relates to, back to the trust issue. And this is also sort of stemming from some of the swine flu history and what we saw go on there with a bit of the sort of marketing and propaganda around the safety and effectiveness of vaccines. So with regards to the trust, did you see any data or results surface around the fact that the COVID vaccines were originally sold as safe and effective, and included the ability to prevent COVID and prevent transmission? So there was clearly a level of propaganda, not necessarily intended. But many heard that, you know, this is the pandemic of the unvaccinated. So as actual vaccine impact surfaced vis-à-vis safe and the failure of COVID vaccines to prevent infection and transmission, did you assess the role of propaganda, marketing of pharmaceutical products, and any—? And thank you. BOLLYKY: Great. So we did not assess the role of mis- or disinformation in the study, other than trust levels. The trust levels that we had, of course, they had to, for the study to work, predate the pandemic. So we looked at levels of trust in 2019, the situation, effectively, the virus found us in. So we did not assess ways that might have changed over the course of the pandemic. Other studies certainly have. I will say that levels of trust declined everywhere, even in countries like Denmark or Scandinavia, famously high levels of interpersonal trust. The question is, how quickly and to what degree. And, you know, some of the good communication practices that we’ve talked about, and I’m happy to communicate more about with people via email, do seem to have been effective in slowing that erosion. But we didn’t look at the mis- or disinformation and how that changed trust in the United States. FASKIANOS: Thank you. Unfortunately, we are out of time. I’m sorry we couldn’t get to all of the questions. But I just want to ask you, Tom, to take just thirty seconds to talk about Think Global Health, since we have so many health commissioners and medical officers on this call. If you could talk a little bit about your magazine and what you’re doing there. BOLLYKY: Great. I will do that in twenty seconds, because in ten seconds I want to say that health crises are fought at the state and local level. And I am grateful to all of you for what you did during the pandemic, and what we will need to rely on you for in future health emergencies. I don’t think we’re getting enough attention on what states and localities need to succeed in the future. And hopefully, this study can help spotlight that. Now, that said, on Think Global Health, it’s an online magazine that’s meant to look at how health affects economies, societies, and everyday lives. It’s been up for about three years. It has been—it’s analysis has really been picked up everywhere, from the New York Times to the Atlantic to Fox, across the aisle. More than eight hundred pieces published, from authors from sixty countries around the world. We would welcome state and local members of this network contributing. And it’s ThinkGlobalHealth.org. And thanks, again, for your time today. FASKIANOS: Thank you. And thanks to all of you. We will disseminate the link to this webinar recording and the transcript. We will circulate again the report that Tom Bollyky authored—co-authored, as well as the link to ThinkGlobalHealth.org. We’ve also dropped those links in the chat. You can follow Tom on Twitter at @tombollyky. And, as always, we encourage you to visit CFR.org, ForeignAffairs.com and, of course, ThinkGlobalHealth.org for more expertise and analysis. You can also email [email protected] to let us know how CFR can support the important work that you are doing. And we do recognize all the hard work that you are doing. As Tom does go—not enough attention is given to it. So thank you for all you’re doing. Thank you for being with us. And thank you to Tom Bollyky for your efforts.

Brad W. Setser, CFR’s Whitney Shepardson senior fellow, leads a conversation on the likelihood of an economic recession, the current debt ceiling debate, and recent instability in the U.S. banking sector.  TRANSCRIPT FASKIANOS: Thank you. Welcome to the Council on Foreign Relations State and Local Officials Webinar. I’m Irina Faskianos, vice president for the National Program and Outreach here at CFR. We’re delighted to have participants from forty-eight states and the U.S. territories with us for today’s conversation, which is on the record. CFR is an independent and nonpartisan membership organization, think tank, publisher, and educational institution focusing on U.S. foreign and domestic policy. CFR is also the publisher of Foreign Affairs magazine. And, as always, CFR takes no institutional positions on matters of policy. Through our State and Local Officials Initiative, CFR serves as a resource on international issues affecting the priorities and agendas of state and local governments by providing analysis on a wide range of policy topics. We’re pleased to have Brad Setser with us today for our conversation on “U.S. Economic Uncertainty.” Brad Setser is the Whitney Shepardson senior fellow at CFR, where he focuses on global trade and capital flows, financial vulnerability analysis, and sovereignty debt restructuring. Prior to this role, he served as a senior advisor to the United States Trade Representative and as a deputy assistant secretary for international economic analysis in the U.S. Treasury. Dr. Setser is also the author of the book, Sovereign Wealth and Sovereign Power and the co-author of Bailouts and Bail-ins: Responding to Financial Crises in Emerging Economies. Brad, thanks very much for being with us today. I thought I would throw you a softball question and ask you to talk about the state of the U.S. economy and what we’re looking at, especially in light of the debt ceiling discussions in D.C. SETSER: Well, I think the economy is in an OK, but not great, position right now. Clearly, the economy has slowed substantially compared to the initial phases of the recovery from the pandemic. But that slowdown was largely the expected response of the withdrawal of some of the fiscal stimulus and the Fed’s tightening. What I think, though, stands out right now is that there's enormous uncertainty, as the title of this panel suggests, about the future economic outlook, large possibilities of significant deviations from a sort of stable, orderly path of growth. So I thought I would highlight what I think are the three biggest risks, just to get the discussion going. The first risk is, in some sense, we are driving through terrain that we don't fully understand. Largely because the effects of the pandemic are so with us and a once-in-a-century, or once-in-a-millennium pandemic is not something that was easy to model or has been easy to model as we emerged from it. We should remember that we never really saw the kind of shutdown of the U.S. economy that we experienced in the second quarter of 2020, in the very early days of the pandemic. I mean, both Irina and I were in New York at the time, and the city literally shut down for a period of time after the enormous initial outbreak and while we were waiting for the vaccines, and basically learning how to manage this particular pandemic.  That shutdown had reverberations and consequences that have stayed with us over time. It’s left the path of economic growth—it’s created a much more unstable path of economic activity than is typical in the U.S. economy. Obviously, it's hard to disentangle the effects of the pandemic, per se, from the effects of the policy response to the pandemic, the initial rounds of stimulus under both the Biden and the Trump administrations, and then the snarls in global supply chains that complicated the path of recovery. Those snarls reflected both a shift in demand towards goods and away from services, which was really quite substantial when you look at the data, and then the fact that we encountered infrastructure constraints as well as production constraints around the global economy. In 2021, our ports literally couldn't accommodate all of the containers coming in with all the goods our economy was demanding. And then because there was such repressed demand, we had, like, an enormous trade deficit in the first quarter of 2022 and then a big fall-off in trade late last year, which actually had nothing to do with any change in trade policy. It was simply the fact that it, you know, there was such high demand for goods in 2021 that wasn't really met until early 2022, but then there was a fall-off in demand once our economy had kind of adjusted to this new equilibrium. One sign that these pandemic-related disruptions aren't completely past is pretty straightforward, when you think about it. Auto prices are still up quite a lot, quite significantly. Normally, when prices go up supply responds, production goes up. But only very recently has U.S. automobile production—it's also true for North American automobile production—recovered to the levels that we had before the pandemic. Our economy didn't forget how to produce cars, but the availability of the semiconductors needed for a modern car was really constrained. And that limited the ability of the economy to respond as one would expect to a clear signal from the market. So there was just—whenever you look closely at the U.S. economy, you find relationships that have held for long periods of time that aren't quite holding as one would expect, even three years after the pandemic. We still haven't managed to return to a fully normal economy. We're still dealing with some of the aftershocks. So that creates one source of uncertainty. The second source of uncertainty is that the Fed really did tighten rates quite substantially last year and early this year. It’s the largest tightening cycle in recent economic history, largest and fastest, going from zero to five in a very—in a relatively short period of time. And that tightening cycle, you know, clearly was a response to the fact that inflation was above the Fed’s target, through the tightening of supply because of the higher demand from some of the policy responses to the pandemic. No one doubts that inflation was above target. No one doubted the Fed needed to react. And I don't think anyone really doubts the Fed needed to react quite strongly.  But the magnitude of the increase in interest rates and the pace of the increase in interest rates is large. And there's always a risk when you tighten monetary policy that you do too much, that you push the economy, or you tighten—you pull back the economy too, too heavily. And rather than bringing the economy back into equilibrium, you push on the brakes too hard, the economy stops. And effectively, there's a recession. There's also a risk of doing too little. You don't tighten enough. The economy slows, but not enough to bring down inflation. And the concern then is that expectations about future inflation become entrenched and inflation never comes back down to pre-pandemic levels. So the Fed has had to try to navigate between those two risks. And it has had to do so while driving over uncertain terrain because of the pandemic and dealing with the normal uncertainty that accompanies all Fed policy. The Fed’s monetary policy famously works with what are called long and variable lags, which means that the effect of tightening last year is still being felt in the economy this year and will still be felt next year. An easy way of seeing that is when you think about how trade responds to a Fed tightening cycle. The dollar goes up, but it takes eight quarters before all of the trade impacts of a stronger dollar typically feed through to the U.S. economy. When interest rates go up, that impacts housing. Impacts the affordability of homes. All that, though, feeds through to the broader economy over time. It doesn't happen instantly. And it doesn't always feed through at the expected pace. There's arguments why the pace of tightening last year, that the normal lags will be shorter. Financial markets looked ahead. long-term interest rates went up very quickly even before the Fed completed its tightening cycle. That arguably pulls forward some of the contractionary impact.  But there are other variables which suggests that the lags may be particularly long. We didn't actually see the labor market tighten very significantly when the Fed started raising interest rates. Employment has remained very strong. Inflation has come down, but maybe not quite as much as the Fed might have hoped. Although I think there's some evidence that is feeding through. But famously, I think, one of the ways in which lags are long and variable is that the main way monetary policy tightening tends to impact the U.S. economy is through the banking system. And for a long time, it wasn't obvious that the Fed’s tightening was slowing the banks, that it was pinching on the banks, that it was restraining bank lending. It took actually a really long time before higher Fed interest rates led to higher deposit interest rates and problems for those banks that had, in effect, bet that deposit interest rates wouldn't go up that much and therefore they were going to be safe, even though they put a lot of their portfolio into bonds, long term what are called agency-backed securities, repackaged mortgages, that gave you a bit of a yield pickup back when interest rates were zero, but you locked in 2 or 3 percent interest rates over a really long period of time—seven years, five years.  Long enough that when now that deposit rates have started to come up, the banks are losing money on this part of their portfolio. We know this because this was the bet that Silicon Valley Bank and a few others made, and when colossally wrong. The banks effectively depleted their capital because of a bad bet on interest rates. Simple error, not a complex error. Silicon Valley Bank didn't go get into trouble because it lent to Silicon Valley Bank. Silicon Valley Bank got in trouble because it bought really safe securities, but locked in low-interest rates for too long and wasn't prepared when the Fed raised rates. But the net effect is that after a long period of time, when Fed tightening, higher short-term interest rates didn't seem like it was impacting the banking system, all of a sudden we've seen a lot of evidence that it really has started to impact the banking system and that the banks are going to cut back on lending. And so one source of uncertainty—it's very much on the minds of Fed officials—is that the Fed has to calibrate how much this new contraction in bank lending is going to slow the economy and, therefore, how much more they need to do by raising policy rates. Or, whether they should pause or even pull back lower rates, which they aren't going to do.  But, you know, conceptually, if you thought that this was going to impact the economy so heavily that the economy would naturally slow and pull inflation below target, you would be cutting not raising. The difficulty for the Fed is that it is very hard to calibrate exactly how the combined effect of last year's increase in interest rates and this year's banking crisis will impact the economy over the next several quarters. Which adds to the risk that the economy may slow more than expected. A third source of uncertainty is the obvious one, the debt ceiling. I personally would prefer if we didn't have a debt ceiling and if we weren't threatening the U.S. government with default every few years when government is divided. The debt ceiling though generates one of two outcomes. One outcome is essentially a disaster. If the U.S. defaults on its debt or if the U.S. prioritizes paying the deb but doesn't have the capacity to borrow new money and has to cut back heavily on all other activities of government, the U.S. economy goes into a big contraction—if that is sustained for any period of time whatsoever. There's absolutely no ambiguity about it. The only ambiguity is whether the U.S. prioritizes treasuries, which Treasury says will be very difficult to do, or whether it defaults. If the Treasury prioritizes treasuries, it's probably good for long-term bonds. If the Treasury defaults, it's probably a disaster for bonds. So there's uncertainty about, in that situation, which way the Treasury would—which option the Treasury would go for and how it would impact long-term bond prices. Which is a problem for bond traders. But there's no question it hits the economy hard, it hits equity markets hard. It would fundamentally be a self-created disaster. But because everyone knows if you actually went into default or could not honor other promises of the government—and pay wages, pay bills, pay social security—that it would be a disaster, the assumption is that there will be a deal. And if there is a deal, the economic impact is probably pretty modest. There's a bit of extra uncertainty that maybe slows the economy just a bit, but it isn't devastating. So we're faced with what is sort of fundamentally a low probability of a really high-impact event, which is something that is very hard for markets to discount and price. So we're in an economy with multiple sources of uncertainty. That's almost always the case. But I think many of those sources of uncertainty are actually unusually large right now. And we're at a delicate time. We're always—it's always a delicate time when you're trying to bring inflation down without putting the economy into a stall. So it's a challenging few months. FASKIANOS: Fantastic. Let's now go to all of you for your questions or comments. You can either click on your screen to raise your hand or else you can put your question in the Q&A box. If you do that, please identify—tell us who you are. And I'll read the questions and/or call on people who have raised their hands. And we really love to hear from you live, so do consider that.  So the first question that we have is from Mike Zoril, who is a District 14 supervisor in Rock County, Wisconsin: How does the debt ceiling impact the banking sector? And what are the potential consequences if the ceiling is not raised in time? I think you—I think he may have typed in that question before you got to the third part of your scenario, but is there anything you want to expand upon that you didn't cover in your in your points, Brad? SETSER: Well, I think there's one obvious way in which the debt ceiling impacts the banking sector, and one perhaps less obvious way. The obvious way is that an awful lot of banking transactions are collateralized with treasuries. So they're secured by treasuries. So the one way in which you reduce risk associated with short-term lending is that you lend someone cash, but you they give you their treasuries in return. And you do that, you think you have an absolutely safe extension of credit. It is the safest thing you can do.  If your counterparty doesn't pay you, you have treasuries which are money good. And if treasuries aren't money good, then all of a sudden a set of transactions that underpin our banking system would become problematic. And I mean, in some sense, the consequences of that are so dire that the operating assumption is that the U.S. government wouldn't stand still, that it would quickly cure the default. But if there were an extended period of default, a set of transactions between banks that are considered super safe suddenly stopped being safe. I think the second impact is more subtle, and I'm not actually 100 percent sure it's true. But when people put money in a bank they're counting a bit on the quality of the bank, the safety of that particular institution, the wisdom of that bank’s manager, the quality of the loans. But most of us don't monitor our banks that closely. We trust the federal government to supervise and we rely on Federal Deposit Insurance to make sure that our money is good, even if the bank fails. And if the Treasury is in protracted default, what worries me a little bit is that some people might wonder whether the credibility of the U.S. government's backstop for bank deposits remains intact.  I can come up with arguments for why it would. The FDIC has some independent authority. But ultimately, if the U.S. government can't borrow, the U.S. government cannot do an awful lot of things. And many of those things are pretty essential to financial institutions. FASKIANOS: Thank you. I'm going to take the next question from Ronald Campbell, who's the co-chairperson and treasurer in the Office of Georgia Representative Lisa Campbell, District 35: Is there an economic positioning system similar to GPS for navigating in the economy? If not, what are the key economic coordinates to monitor? SETSER: Like, unfortunately, you can't turn on Google Maps and get precise instructions for how to go from point A to point B. There's a range of tools and data points that the Fed, the White House, the Treasury do use. Financial market variables are very important. Financial markets are important in and of themselves. They tell you how much it costs to borrow. But they also can give you some insight into how professional traders are interpreting the economic data. And that can help provide some guidance. There is data from surveys that tell us how consumers view the economy. There's data from surveys that tell us how businesses view the economy. The federal government collects data on wages. It collects data on the number of people who are employed. And those labor market variables tend to be some of the best high-frequency indicators of how the economy is doing. And then we collect various data points that measure how consumers are spending, what retail sales are, some are pretty well-defined in real-time. Others are less so. And between those variables and kind of old-fashioned physical measures like how much freight is moving on trucks and how many containers are coming through the ports, you can get some guide to how the economy is doing. And that can help you use your policy tools to try to get to the destination. I think the hard part is that there's lags between when things change in the economy and when you see them in some of these data points. And it is hard to forecast with the same precision that Uber can forecast whether you're going to get to your destination in eight minutes, ten minutes, fourteen minutes, or twenty minutes, how policy changes, like the Fed’s tightening, will impact the economy in one quarter, two quarters, or three quarters. So there's those difficulties that make it hard to have the same kind of precision that we get from GPS, and the new Google Maps and Uber software tools. FASKIANOS: Thank you. I'm going to take the next question from Robert Cantelmo. If you could unmute—accept the unmute prompt and tell us who you are. Q: Hi, thank you so much. Brad, thanks for sharing these remarks this afternoon. My name is Robert Cantelmo. I'm a City Council member in Ithaca, New York, and the Democratic candidate for mayor. We've heard a lot about the potential for remote work throughout the pandemic. And I know several small and midsize cities had hoped that we might be able to leverage this modality shift into some economic opportunity over the intermediate term. However, as you're noting, we're in a period of uncertainty and relative instability. And I was wondering if you could care to comment on how modestly sized cities might better prepare to weather that uncertainty, especially with the lens on, you know, how you think it might impact our long-term ability to attract capital investment and keep up service delivery over a period of inflationary pressures? SETSER: That's a hard question. I mean, to be honest, I don't think municipal government should be forced into the position of having to think about how to manage a default by the federal government. I think it's much better for our economy and our society when the only question municipal governments face is whether the federal government might provide help to manage their budgets during periods of global or national economic stress, like during the pandemic, when municipal governments have to think about how to manage risk that really can't be managed. I think that's asking a bit too much.  I mean, just stating the obvious thing, you know, if you're putting your cash in a treasury money market fund, you would normally think that would be the safest thing in the world. But there are scenarios where short-term treasury bills are in default and what normally would be the safest thing in the world, safer than a big bank deposit, isn't safe. So I do think it's probably important to think about sources of cash if there is protracted default, not that you want to but probably be a good idea.  And then, if there is either a default or if there isn't a clean resolution of the debt ceiling, so that there's going to be a series of high-profile games of chicken that push up borrowing costs. I don't think municipalities can insulate themselves from that because municipal bonds price off the treasury market. I think you just have to plan for the possibility of higher interest rates that impact your borrowing. I think it's probably good practice to have stress tests on your access to the municipal bond market. Make sure that municipalities have access to enough cash that you can survive if there's a period of interruption.  But at the end of the day, if you can't afford to borrow you can't afford to make a lot of long-term investments. And that will constrain any municipality’s ability to position itself for the future. I worked a lot in my stint in government on Puerto Rico. And Puerto Rico lost access to the municipal bond market, and it was devastating. Absolutely devastating. They relied heavily on short-term borrowing because of some weirdness in how they had pledged sales tax revenue. So they pledged sales tax revenue to first go to the bonds and then go to the budget. So they had no sales tax revenue for the first six months of the year, and all their sales tax revenue came in from month seven to month twelve. And they typically borrowed short term during the first six months of the year against their expected sales tax revenue in the second half of the year. But when you couldn't pay your long-term bonds, the banks wouldn't lend to you short term, so you were faced with the risk of a really tight cash flow constraint. And that just illustrated to me some of the complexities of municipal budgeting. And the fact that you have to have probably more buffers than the federal government typically has. Because the federal government, you know, historically has able to operate with a limited cash buffer because of the consistency of its ability to access short-term bill markets and always raise cash. FASKIANOS: Thank you. I’m going to go next to Robert Myers, who is a senator in Alaska: What's the current outlook on energy markets, especially oil and gas? SETSER: Oh, I think some people—I know there are many people, maybe some on this call, who probably are better positioned to answer that. You know, there is no doubt that one of the biggest sources of uncertainty in the global economy over the past twenty-four months has been energy markets.  Russia's invasion of Ukraine and the associated sanctions, and the reduction or elimination of a lot of pipeline flows of natural gas to Europe, have all disrupted global oil markets profoundly. A world where Europe no longer buys oil from Russia, at least not tanker oil, and most of Europe, not pipeline oil, and instead has to import oil from everywhere else, and where Russian oil goes to Turkey and now to India—a lot goes to India, as well as China and parts of Asia—that has lengthen the amount of time Russian oil has to spend at sea. And it has, like, disrupted the standard global flow of oil in so many ways. So obviously, last summer, that meant really high oil prices. And really high oil prices then in turn induce—you know, markets work. People started drilling more. It took a little while, longer than I would have liked, but markets have responded. There are more sources of oil supply. And then high prices tend to reduce demand. And China has been weaker than expected. So right now, the oil market seems relatively well supplied. But the oil market is not a completely free market.  And on the supply side, OPEC and OPEC+ work to manage the market. And the Saudis have signaled that they don't want oil to go much below seventy. I tend to believe them. And I think the U.S. now is doing something that is quite smart, although maybe we're not doing it as nimbly as we should, and I would like to have more capacity to do this quickly and do this with more force. But we're starting to refill the Strategic Petroleum Reserve. We signaled that we'll kind of start buying some oil, which should also put a floor under markets.  The natural gas market has really stabilized. European gas prices have come way down, thank God. And thank a relatively mild winter in Europe that left gas storage full. But we are in a different world now than we were twelve months ago, because the European natural gas storage tanks are full. So—and Russia has exercised its option, it's exercised its threat; it’s not supplying Europe with gas. And Europe was able to get through the winter. It overpaid for LNG for a while. It no longer has to. So that's putting downward pressure on gas prices. So my sense is that oil prices won't go much lower, largely because the producers are now in a position where they're going to respond to weakness. We're hitting the limits of their willingness to tolerate lower oil prices. And we're also hitting levels where the U.S. should refill the Strategic Petroleum Reserve. And if oil prices stay at this level, there'll be some reduction in drilling. So that's my sense of where we are, but I don't follow the oil market on a day-to-day basis. FASKIANOS: We will—that's a good note for us to cover that in a future webinar. So we'll put that on our list of things to delve deeper into. So thank you for that question, and for your response, Brad. I’m going to go next to Commissioner Aaron Mays in Shawnee County in Kansas: It seems like the rate of inflation has slowed some in recent months. Is there a possibility of some deflation or should we permanently adjust our budgets to accommodate higher wages and prices? SETSER: Well, Irina left out one critical part of my biography, which I was actually born and raised in the state of Kansas. So, hi. It’s—Shawnee Mission was always, you know, aspirational for me. We used to go to debate tournaments there. And the Shawnee Mission High Schools in that era were the best-funded in the state of Kansas. So I hope the high quality of the Shawnee Mission School Districts has been sustained over time. I mean, deflation is an unlikely, I would say, possibility. And we're currently on a trajectory which economists called disinflation, which means that we're going from high inflation to medium inflation, and hopefully back to lower inflation. So the pace of inflation is slowing. But deflation would be an absolute fall in prices. And given the tightness in the labor market and the momentum in prices, that seems an unlikely outcome. I do think the most likely outcome is that the pace of increase in inflation continues to fall. And that means that the Fed will be closer to its target than it is now.  So in a forward-looking basis, the Fed wants price increases to get down to about 2 percent a year. We went up to eight, which is too high. We're now at four-ish, I think. And some of the forward-looking indicators would suggest that we're going to be on a trajectory where we should get down to three. Certainly, the pace of increase in housing prices have slowed. And in some places, housing prices are coming down. But the way the inflation series is constructed, it's kind of complicated, but it's basically the average of price increases over the past twelve months. So it just takes a long time before that feeds into the measured variable. And that is expected to bring the pace of rent increase, as measured, down. Wage increases are still pretty strong. And that's expected to keep service prices up. Although, there’s a hope that they will be generally coming down in response to the Fed’s tightening and the contraction of banking credit. But they will come down without too much of a drag on the economy. But in terms of budgeting and forward-looking forecasts, I think it is safe to forecast, to expect price increases of—that are a little above the Fed’s target for the next couple of years. And then there's a debate about whether they will be back precisely at the 2 percent target or maybe a little higher, but I think it’s really unlikely that we would have an extended period of inflation where there was no increase in prices or a fall in prices. That would be an indication that the Fed had overdone it, and that’s something that typically only happens in a pretty serious recession. FASKIANOS: Thanks. We’re going to take the next question from Commissioner Bob Heneage—my apologies if I mispronounced it—of Teton County in Idaho: What is the likelihood of—the federal government will attempt to claw back unspent American Rescue Plan Act funds from local governor—governments? Excuse me. SETSER: Very low, because that would be political suicide for any member of the House of Representatives. I think there will be some efforts to claw back or not use some of the unspent federal resources, but anything that has already been provided to the states and municipalities I think is safe. I haven’t thought in detail—I don’t know in detail if there’s a pool of money that has been pledged to state and local governments but hasn’t yet been disbursed, and I would watch that. But anything that has already been transferred is yours. And if it’s not, I mean, wow, that is a—that’s crazy politics. FASKIANOS: Next question we’ll take from Beverly Burger, who has raised her hand. So if you can unmute yourself. Q: Sure. Can you hear me? FASKIANOS: We can. And identify yourself, please. Q: Yes, Alderman—I'm sorry. Excuse me. Alderman Burger from the city of Franklin, Tennessee, just south of Nashville. Sorry, I came on a little bit late, so I didn't hear the very, very first part, but did get most of it. But can you shine some light on how what is going on right now in our economy affects our local city investments in funding new water treatment plants, new city hall? We're thinking of partnering with an entity to build a larger conference center, not to own it but to partner with them, in a way. A few water projects as well. I might just say that our city plans conservatively on our budget. We’re a AAA-rated city, and we have a policy of having 33 percent of our general budget in reserves, which right now we have 54 (percent). We have a low property tax, heavily rely on sales tax at 9.75 percent. We also impose road and facility and parkland dedication fees on new development. Our sewer plant’s already been built. We already have long-term funding for that. But my question is, how wise is it right now to invest in these other projects mentioned in the coming two years? And, by the way, our city is about 88,000 in population and we are AAA-bond rated. SETSER: Well, the best advice would be that you should have borrowed a ton of money back when interest rates were really low during the pandemic and locked in that funding. But that's unrealistic. And obviously at that time, there was a concern that the economy might not bounce back, and that demand wouldn't be there, that you didn't need to plan for projected growth. I would not let—personally, I would not let too many long-term plans be impacted by timing around the bond market. Long-term borrowing is up a bit. It's more expensive, clearly, than it was two years ago.  But, you know, the U.S. Treasury is borrowing at 3 and 3 ½ (percent). I don't know where a AAA muni can borrow. So there's going to be a subset of projects that maybe made sense when you could borrow at 2 percent that don't make sense when you can borrow at 4 percent. I wouldn't recommend borrowing a lot at 6 (percent). But if you can access markets at four nominal, to me if you can confidently forecast growth in revenues over time that will generate 4 percent growth if the economy performs normally, and you've got a decent reserve, you should go ahead and make necessary investments in your infrastructure. But clearly, the cost has gone up a bit. I just don't know how much it has gone up for AAA munis over the past few years off the top of my head. FASKIANOS: Thank you. Let's go next to Jeremy Gordon, who is Polk County, Oregon commissioner: What other inflation responses outside of the Fed are possible but not talked about? SETSER: Well, fiscal cuts tend to reduce inflation. To some degree, those are being a little bit talked about now because of one possible outcome of the debt ceiling. Tax increases clearly slow the economy and slow inflation. Now there's, you know, a little bit of a debate about exactly how. And, you know, I think a lot of people if the sales tax goes up, they think inflation has gone up because the price they actually pay is gone up when, for an economist, they would say, well, if you increase sales tax than other prices are going to not go up as much, and so the price—the underlying price level growth will slow. But I understand that's not quite how most consumers think. But those would be the kind of classic tools that are outside of the Fed. Some have argued, and it's a very debated proposition, that reducing the monopoly or power of some big businesses would lower prices. That you could get more competition in the economy, lower markups, and that that would help bring prices down. And some have argued, and this has obviously been a partisan fight, that the U.S. government could help lower drug prices by negotiating the price it pays the big pharmaceutical companies for lifesaving medicines.  I tend to agree with that. I think there's no good reason why U.S. medical prices are many multiples of the prices paid in Europe and other jurisdictions that have access to the same meds, same quality that we do. But that's been a huge source of political debate, as we all know, over the past ten years. But I do think that that is something that was talked about but is no longer talked about because it has no chance of going through our Congress. FASKIANOS: We go next to a question from Rob Hotaling. And if you could accept the unmute prompt. Q: Hi. Yes. Can you hear me? FASKIANOS: We can. Q: Perfect. Thank you so much. Yeah, hi, this is Rob Hotaling. So, the question really isn't around the impacts of economic uncertainty—oh, by the way. Deputy commissioner of Connecticut's Economic and Community Development. So yeah, my question is around what are the impacts of economic uncertainty on investments? Earlier you mentioned IRA, no clawbacks, things like that be political suicide, to quote you. But I am wondering from an infrastructure, workforce training, technology, and innovation perspective, looking at our state, in Connecticut, what we can do and what we can advise our businesses and individuals to do in Connecticut. Of course, the rest of the nation probably has the same concern about economic uncertainty as regards to investments. SETSER: Well, there's a certain amount of uncertainty that is a fact of life in a capitalist economy, in a market economy. And businesses and states have to manage that uncertainty. There's a set of standard recommendations. I think, the Alderwoman from Tennessee highlighted some of that, which is that, you know, holding buffers on hand to help manage the unexpected is always good advice, even though it is costly. But the bigger, I think, issue is that there's a set of sources of uncertainty in our economy that it would just be helpful to eliminate. The debt ceiling as a source of enormous uncertainty that hopefully we will be able to get through without having a catastrophic outcome. I don't think, as I said earlier, that that is something where state and local officials really should be responsible for having to help people navigate it. There is no good way to navigate it. It is really the responsibility of the federal government to figure out a path forward.  And then there is no easy way to manage through a period when, for a broad set of reasons, our economy is slowing. We've gotten a relatively strong recovery by global standards from the pandemic. We’re much closer to the level of output that you would expect had there not been a pandemic than some other economies throughout the world are. We came out of the pandemic with, you know, a very strong economy powered by a very large stimulus. That stimulus has mostly been withdrawn but is still partially—there's still some lagged effects of that withdrawal of stimulus. And we came out so strong that the Fed felt the need to slow the economy. And there is—there is nothing that localities can do, other than maintain standard buffers, to prepare for the possibility that the Fed will either overdo it or underdo it. But this is this is a time when you—I think, sensible forecast would not expect a very high probability of very strong growth. There's a pretty high probability of relatively weak growth, just because the Fed is trying to grow the economy. And then there's a small probability of a really sharp slowdown, most obviously induced by the debt ceiling but possibly induced by further banking stress. So I would weigh my decisions according to that distribution of outcomes. Q: Can I ask one follow-up question? Is that feasible? FASKIANOS: Sure. Sure, go ahead. Go ahead. Q: Just Connecticut, like a few states, has a pretty healthy rainy-day fund. When roughly the majority of America thinks we're going to enter a recession, what is your advice for states like Connecticut who have a healthy rainy day fund and a surplus? Do you—we're not looking for state financial advice, per se. We're just saying, what is the overall guidance on considerations for what to do with that rainy-day fund ahead of a recession, considering the inflationary environment we're in? SETSER: I think a rainy-day fund is a very good thing to have when there's a recession. So this would not be a time to run it down. We're in a period of heightened uncertainty. If the recession—if a recession materializes, if you see a fall in revenues, then that is the time to start drawing on the fund. I would wait until the economy has kind of normalized, we're back at normal growth and normal inflation and we're past the debt ceiling, before making any long-term decisions about levels of spending and revenue that would materially reduce that buffer over time. Q: Perfect. Thank you so much. FASKIANOS: So, Brad, there’s a question from Commissioner Robert Sezak in Somerset County, Maine: There's been talk of invoking the Fourteenth Amendment to eliminate the debt ceiling provisions. What would be the impact of that course of action? And I think I just—you say that you think it should be eliminated. SETSER: Yeah. If I were given unlimited authority, I would personally get rid of the debt ceiling and just live in a world where the U.S. government was constrained by the budget, and any approved budget—which will have embedded in it a forecast of spending forecasts about revenue—any spending authorized by the budget itself authorizes the debt issued to fund that budget. So you—I don't think you need a debt ceiling, per se. Most countries around the world don't actually have debt ceilings. There's a lot of debate about what would happen if the Fourteenth Amendment were invoked. I think it is fair to say that the effect of invoking the Fourteenth Amendment would be smaller than the effect of a default or the effect of forcing the U.S. government to run a cash budget and not borrow, and thereby really scale back spending. And then you have to factor in, if you scale back spending you're going to, like, lose a little momentum in the economy. Revenues are going to come down. It just becomes pretty devastating pretty quickly. So if that's your alternative, invoking the Fourteenth Amendment is—will generate better outcomes. If your alternative is raising the debt ceiling so that you don't default and can keep borrowing, you can avoid some of the uncertainty associated with the Fourteenth Amendment. The uncertainty associated with the Fourteenth Amendment is, as I understand it, as follows: The Fourteenth—the use of the Fourteenth Amendment would be challenged in the courts. And any debt—there would be a question about whether any debt issued after the invocation of the Fourteenth Amendment is constitutional.  And so that that debt would likely trade in the market at a slightly different interest rate and a bigger discount than debt issued before the U.S. invoked the Fourteenth Amendment, at least until there was clarity from the courts. So during that period, there would be uncertainty about how the courts would ultimately rule. I personally think, and I may be influenced by my friend and colleague Anna Gelpern who’s been writing about this at Georgetown Law School, that the Fourteenth Amendment is—the intent of the Fourteenth Amendment is pretty clear. And that the president would actually be on strong constitutional and legal grounds to say that it is unconstitutional to default.  I think that actually is the meaning of the words that were written in the Fourteenth Amendment. Anna has uncovered some interesting historical evidence that the goal was to make sure that the Union didn't default on the debts incurred to fight the Civil War. That seems like pretty clear intent that the U.S. government's federal debt should be paid. That was the purpose of that language. But it is not uniformly accepted. It would be challenged. And therefore, we would have a new source of uncertainty if that were to be invoked. But, to be clear, the worst outcome is protracted default. FASKIANOS: We have a raised hand from Liane Taylor. Q: Good afternoon. Thank you. Liane Taylor. I'm from Montana Department of Commerce: And my question is a little bit of a different take. With all this information overload in the world right now, could you recommend one or two comprehensive sources of good information, such as you are imparting to us? SETSER: You know, I think the major national newspapers actually do a pretty good job of reporting financial and economic news. So I rely pretty heavily on the reporting of the Wall Street Journal and the reporting of the New York Times. If you can afford it, the reporting from Bloomberg is also excellent. But I draw pretty heavily on the mainstream financial media. And I think, as a participant in some of these policy debates and some of these financial debates, I generally feel like both the news coverage of the Journal and the news coverage of the Times accurately reflects the state of the real debate that's going on. I don't think that there’s any lack of—I mean, I'm impressed, often, by how well-informed they are, particularly about discussions around the Fed’s policy in the state of the economy. So I would I would, boringly, draw on the conventional press. FASKIANOS: Great. I wanted to just look at the questions we have in the chat. Where should we go next? Let's see. There are questions about if the federal government does not put a restriction on its spending, how long can they keep borrowing given its debt is already over $31 trillion? Is from Michael Yu. SETSER: To be honest, there is no obvious limit. Japan has borrowed up to 200 percent of its GDP at low-interest rates. There's no sign that the federal government has difficulty funding itself. The absolute level of debt is high. It's about 100 percent of GDP when you do a certain amount of netting, which I think is normal. And the budget deficit’s about 5 percent of GDP, which is a bit higher than the level that is consistent with a stable debt-to-GDP ratio. I generally think it would be a good idea to move over time towards a budget deficit that is consistent with a stable debt-to-GDP ratio. But there isn't a clear limit on what an advanced economy like the U.S. can borrow. If you borrow too much, you'll start putting upward pressure on Treasury interest rates and that will be a signal that you probably need to move more quickly towards a more restrained deficit. But the basic rule of thumb is you don't want a debt-to-GDP ratio that is increasing forever. But there isn't a clear limit on how much countries can borrow. U.S. debt is high, relative to our history. It is roughly equal to the debt of most European countries in aggregate. For the EU as a whole, debt is about 100 percent of GDP. Germany is lower. France is about where we are. Italy is a bit higher. Japan is way higher. And there’s a huge debate about China. If you just look at the debt of China’s central government, it’s well below the debt of our federal government. But China has a lot of debt, much more debt than we do, at the state and provincial level. There’s a lot of hidden debt there, a lot of backdoor borrowing. So if you include all that, China’s debt is actually not that far below ours. So the absolute level certainly seems high, but it is not wildly out of line with global norms. And financial markets are currently quite comfortable lending to the U.S. for ten years at 3 ½ (percent), which is above where it wasabut it’s not a rate that suggests any near-term risks that the U.S. will cease to be able to borrow to fund some spending. FASKIANOS: Great. So I’m going to go back to Mike Zoril, who has a question. He’s from, again District Fourteen supervisor of Rock County, Wisconsin: What specific plans and actions would be taken if there were a widespread collapse of banks? You know, taking into account the possibility that the FDIC may not have enough funds to cover all the losses? Would a bail-in strategy or the implementation of a new digital currency system be viable solutions? And how would this—you know, the introduction of FedNow affect this process? And the impact might it have on the monetary systems of the BRICS countries? SETSER: So a digital currency is not a solution to a problem with the banks. A digital currency runs the risk of pulling funds out of the banks. A lot of economists think of a bank account as basically a digital dollar already, a digital dollar that pays, in some cases, a bit of interest. A digital dollar that is outside the banking system creates an alternative to keeping your money in the banks. It would weaken the banking system, or at least runs that risk. The likely response to further banking distress—and, you know, that hinges on an assumption that the FDIC, the Fed, the Treasury, using their existing tools, won’t be able to contain the distress. And I think that’s unlikely. I think the FDIC, the Treasury, and the Fed have made it clear that they intend to protect deposits in the financial system by using the so-called systemic risk exception is a major bank fails. And that systemic risk exception lets you backstop the deposits using the money in the FDIC fund. And the FDIC fund can be replenished by a levy on bank deposits. So, it will—it can be renewed without any new budget appropriations. Which makes it, I think, unlikely that it would run out, particularly because the banks that get into trouble going forward will likely be—if they get into trouble, likely will have slightly better balance sheets that Silicon Valley Bank, some of the other banks that have already failed, and so the losses would be smaller. But in the event that there was greater banking distress, I think the first response would be to use the provisions in Dodd-Frank that allow the FDIC to request a straight up or down vote in Congress on an increase in deposit insurance. So, I think the most likely response will be to request that Congress fully guarantee all bank deposits, so that people didn’t have to worry about whether their money in the bank was safe. There’s certainly some other technical things that the Fed would do to make maybe it a little less attractive for money to move out of the banks into money market funds. Greater bank distress would increase the probability that there’d be rate cuts.  So there’d be a lot of responses. But the first response would be to expand FDIC deposit insurance, which takes in most circumstances, I think, my read—the cleanest way to do that certainly would be for Congress to approve it. And then if there were really much deeper bank distress, then you would have to consider whether the U.S. government should request—or, the U.S. should have in place the capacity to put capital in the banks, which is what was done in 2008-2009. That’s an enormously political—you know, so that is, in a different way, runs the risk of being political suicide. But putting capital into the banks is way better than letting our financial system collapse. But to be clear, I think the measures that have been introduced to date will contain the crisis. I think it is clear that the FDIC, the Treasury, and the Fed have the authority to protect deposits in any bank that fails, and they intend to do so. FASKIANOS: And, I’m sorry, at this point we have to close. I am sorry we could not get to the rest of the questions, the raised hands. SETSER: And I’m sorry I closed on such a down note. There is a—there is a path forward where these uncertainties are resolved and the U.S. economy continues to plow ahead. We’ve surprised people by not having a recession yet this year. That was sort of a pretty widespread forecast at the end of last year. And it’s certainly possible that many of these sources of uncertainty will resolve themselves and that we will be able to enjoy an economy that continues to move forward at a reasonable pace. Unfortunately, the level of uncertainty is high. FASKIANOS: And there was a question in the—in the Q&A box about do you want to put a percentage on that, Brad, of what is that certain amount? Would you express it as a percentage? Plus, minus, standard deviation? Do you want to have—or do you want to just leave it as— SETSER: I think any forecast would have to be, at this point, contingent on the resolution of the debt ceiling. And I don’t have a good forecast of that. I certainly hope that it’s resolved. If it is resolved, I think the chances of a recession are between one-third and a half. FASKIANOS: Great. This has been a fantastic discussion. Thank you very much, Brad Setser, and to all of you for your great questions, written and raised. We will share a link to this webinar recording and transcript. You can follow Brad on Twitter at @brad_setser. And Brad also has a blog. It’s called Follow the Money. And you can subscribe to it on the CFR website. We will include a link to it when we send the follow-up note for this webinar. So you can follow what he has to say on a more regular basis. So, again, Brad Setser, thank you very much. I encourage you all to follow us. Go to CFR.org, ForeignAffairs.com, and ThinkGlobalHealth.org for more expertise and analysis. And do email us, [email protected], to let us know how we can further support the important work you are doing. So, again, thank you all for being with us and thank you, Brad. SETSER: Thank you.