In this week's edition, critics of industrial policy ask for more economics, North Korea tests a new ICBM, the G-7 makes a security pledge to Ukraine, Congress continues to develop AI policies, and the House Judiciary Committee investigates disinformation researchers. Additionally, Meta's Threads platform grows rapidly, the consequences of the MOVEit hack continue, and a court ruling constrains government engagement with social media companies about misinformation.
Industrial Policy & International Security
This part of Bidenomics needs more economics | The Wall Street Journal
The US has embraced industrial policy, using government resources to support favored sectors such as semiconductors, renewable energy, and infrastructure. However, industrial policy lacks a rigorous economic foundation, leading to potential failures and a lack of consensus on its definition and goals. While Congress has allocated substantial funding to these initiatives such as the CHIPS Act, the lack of economic criteria for determining which industries to support and how much support they should receive poses a challenge. Some proponents of industrial policy, like Rep. Ro Khanna, argue that economists should not design it due to their limited appreciation of the nonquantifiable costs of deindustrialization. Critics argue that industrial policy often becomes a mishmash of competing objectives and fails to make US industries globally competitive. The discipline of economics itself has been hesitant to embrace industrial policy due to concerns about special interests and market distortions. Yet, some researchers are taking on the challenge: at Harvard University, Gordon Hanson and Dani Rodrik are working on building better data sets to understand the effectiveness of industrial policy.
North Korea conducted a test of a solid-fueled intercontinental ballistic missile (ICBM) just days after threatening to shoot down US military reconnaissance planes. The launch is part of North Korea's efforts to develop weapons capable of potentially striking major US cities. The Hwasong-18, a powerful solid-fueled ICBM, was tested, demonstrating the country's progress in its missile program; solid-fueled ICBMs are more stable than previously developed liquid-fueled missiles. According to Japan’s Defense Ministry, the missile flew about 1,000 kilometers and stayed airborne for seventy-four minutes. It is unclear whether a North Korean nuclear warhead could survive reentry into Earth's atmosphere. While the launch risks destabilizing the security situation in the region, the international community, including Japan and South Korea, strongly condemned the test. The United Nations Security Council has previously passed resolutions prohibiting North Korea's ballistic missile testing but new resolutions introduced last year were blocked by China and Russia.
Biden, G-7 leaders announce major security pledge to Ukraine | The Washington Post
President Biden and other world leaders have announced a major security program to enhance Ukraine's defenses for the long term. The announcement came at the NATO summit in Vilnius, where Ukraine was not invited to join the alliance but received commitments of additional military and humanitarian funding. The security program, supported by the United States, Britain, France, Germany, Canada, Italy, and Japan, aims to build a strong and capable defense for Ukraine across land, air, and sea. While the summit did not provide a timeline for Ukraine's NATO membership, the bilateral security arrangements and increased support from G-7 countries are expected to bolster Ukraine's ability to defend itself. The agreement also includes efforts to strengthen Ukraine's economy and governance reforms. President Biden emphasized the commitment to Ukraine's freedom and stated that support would continue for as long as necessary. However, some of Biden’s Republican challengers in the upcoming election have questioned whether the US should continue providing money and arms to Ukraine.
US Regulation
Three things to know about how the US Congress might regulate AI | MIT Tech Review
Senate Majority Leader Chuck Schumer recently introduced a grand strategy for AI policy, signaling potential new directives for US tech policy. Drawing on previous policy actions proposed by other Members of Congress, Schumer's plan includes principles for AI regulation and a call for swift new legislation. Proposals have also included an AI Commission to manage policy and a federal office to promote AI competition, particularly with China. Despite the novel approach, the Brookings Institution reminds that individual agencies have already been proactive in addressing AI policy. Key principles emerging from discussions are protection of innovation, aligning AI with democratic values, and potential reform of Section 230, which currently protects tech companies from liability for user-generated content. Fall will see more focused discussions, and a comprehensive plan is expected to draw significant attention. Despite imminent summer break for politicians, Schumer plans to start invite-only AI discussions in Congress this fall.
Disinformation researchers under investigation: what’s happening and why | Nature
Multiple investigations are underway in the United States regarding the alleged censorship of conservative viewpoints on COVID-19 vaccines and elections. Republican Representative Jim Jordan, Chairman of the House Judiciary Committee, is leading the charge against researchers who study disinformation and the organizations they work with. Several US research groups have been studying how false information spreads on social media, including misinformation about vaccines and conspiracy theories. The Committee’s investigation originated from reports by the Foundation for Freedom Online, and Elon Musk released internal Twitter files that added to the claims of a coordinated censorship regime. Scientists and university officials involved in the research are frustrated by the investigations and believe they are being targeted unfairly. They argue that their work was conducted openly and publicly and expressed concern that this type of investigation could deter future research into misinformation.
Innovation
Threads Now Fastest-Growing App in History - With 100 Million Users in Just Five Days | Forbes
Meta's Threads platform has attracted more than 100 million users in under five days since its launch in 100 countries, making it the fastest-growing online platform ever, according to Quiver Quantitative data. This achievement surpasses the record held by OpenAI's ChatGPT, which took two months to reach the same number. It may be on the path to exceed Twitter’s active user base, which Insider Intelligence estimated to be 368.4 million in 2022. Threads, now the most downloaded free app in the US on both Apple's App Store and Google Play Store, allows users to sign up via their Instagram accounts, populating their profile details and follow lists automatically. Meta CEO Mark Zuckerberg reported the platform had exceeded expectations. While it’s viewed as a Twitter competitor, Threads offers a different experience. It displays an algorithmic feed rather than a reverse chronological timeline and refrains from promoting hard news or political content. Threads is currently available only on mobile devices.
Cyber
More than 200 organizations have been targeted in MOVEit-related breaches | Axios
Over 200 organizations are facing a data breach linked to security vulnerabilities found in the popular MOVEit file-transfer program. The breaches have potentially impacted over 17.5 million victims' data, and the number continues to rise. The affected organizations come from various sectors, including energy company Shell and Wisconsin's Madison College. Hackers targeted a vulnerability in Progress Software Corp.'s MOVEit file-transfer tool to gain access to sensitive data transmitted by customers. Progress Software patched the original and recently discovered vulnerabilities, and federal officials have warned of MOVEit-related incidents. The Russia-linked ransomware group Cl0p has claimed responsibility for exploiting the MOVEit flaw. Detecting and stopping such cyberattacks can be challenging since organizations may not be aware of the tools employees use on their devices. Individuals affected by the breach are advised to take measures such as changing email account passwords and opting out of data broker services.
Russia’s Notorious Troll Farm Disbands | Wired
The notorious Internet Research Agency (IRA), based in St. Petersburg and known for spreading disinformation and meddling in US elections, has disbanded. Yevgeny Prighozin, a former ally of Vladimir Putin and creator of the IRA, shut down the organization following the brief uprising of his Wagner Group, a mercenary army involved in Russia's invasion of Ukraine. Prighozin lost his assets in Russia, including the media group that housed the IRA. Despite initial efforts to find a new owner for the troll farm, the decision was made to disband it entirely, as reported by Reuters. After a period of exile in Belarus, Prighozin has now returned to Russia, confirmed by the Belarusian president, Alexander Lukashenko.
State & Local Tech Ecosystems
VCs face an existential threat: there are too many of them | Vice
The venture capital (VC) industry is experiencing a significant slowdown and facing challenges as VC funding dropped 49 percent in the most recent quarter compared to a year ago. The industry, once seen as fun and easy, is now perceived as more stressful and existential. The number of VC firms actively raising funds grew from 883 in 2010 to 2,718 in 2022. The increasing number of VCs during the boom years has led to concerns of oversaturation, and many smaller firms are expected to struggle or shut down. Some firms have already begun to reduce headcount and close funds. Even larger, established firms are facing challenges when raising money. Limited partners (LPs), such as wealthy investors, pension funds, and endowments, who have invested billions in VCs, are becoming overallocated to venture and may pull back their investments. The industry's reliance on inflated valuations to maintain appearances and attract LPs is also a concern. The VC slowdown is expected to continue, leading to more downsizing and challenges for the industry.
Democracy Online
Ruling puts social media at crossroads of disinformation and free speech | The New York Times
A federal judge in Louisiana issued a ruling that temporarily limits how members of President Biden's administration can engage with social media companies, imposing restrictions on their ability to pressure platforms to remove content they deem harmful or false. The case, brought by Republican attorneys general and individuals who oppose pandemic measures, is seen as a flashpoint in the ongoing battle over free speech and social media regulation. The judge's ruling has raised concerns about the government's influence over online speech and its potential impact on combating misinformation and protecting public health. The outcome of the case could have significant implications for First Amendment law and the government's ability to address dangerous information in times of crisis. The government has appealed the ruling, but will comply with the order until the final decision.
How susceptible are you to misinformation? There’s a test you can take | Scientific American
Contrary to popular belief, a poll conducted by YouGov reveals that Gen Zers and millennials may be more susceptible to online misinformation than older adults. The poll, which administered a misinformation susceptibility test (MIST) developed by researchers, found that individuals who spend more time online had difficulty distinguishing between real and fake news headlines. MIST is the first standardized test of its kind in psychology for misinformation and is designed to be administered broadly. The YouGov poll was given to 1,516 US adults. Only 11 percent of Americans aged 18 to 29 accurately categorized seventeen or more headlines, compared to 36 percent of the 65-and-older group. Furthermore, those who spent three or more leisure hours online and obtained news from social media platforms such as TikTok, Instagram, and Snapchat scored lower in misinformation detection. Personality traits, such as conscientiousness, also influenced susceptibility to fake news. The researchers emphasized that media literacy is a crucial skill for navigating the information-rich environment.
