February 24, 2023

Thought of the Week

To me, the mention of “artificial intelligence” (AI) still conjures up images of Arnold Schwarzenegger as The Terminator or Keanu Reeves in The Matrix. Yet, generative AI is already a presence on social media and in the news. In fact, IBM CEO Arvind Krishna says that artificial intelligence is on such a rapidly aggressive pace that it could take over “clerical white collar work,” in fields such as customer service, human resources, finance, and health care—not years from now but in the present day. Although experts say that it will be some time before AI has the critical thinking skills or ethical insight to trump humans, its responses are so sophisticated that universities have had to restructure how they grade students. Federal legislators have taken note. Members of Congress have released statements addressing the risks of AI, and even read AI-generated text on the House floor. The question for a Government Relations Director becomes: could AI eventually replace humans in the lobbying process? According to a Stanford University study, the answer is: yes, AI could, one day, have an effect on our democracy by replacing humans in the lobbying process. Programs like OpenAI’s ChatGPT could be used by corporations to write letters to editors, write comments submitted during the regulatory and legislative process, and, when combined with network mapping programs, exploit policymaking weaknesses by targeting key policymakers. Fed the proper information, ChatGPT is already 75% accurate in determining whether a government bill is relevant to a specific company, can draft letters to Congress, and has the ability to suggest legislative amendments. While AI’s performance on lobbying-related tasks is expected to improve, OpenAI CEO Sam Altman says that text generation models constantly make things up, and that it would be a mistake to rely on ChatGPT for anything important right now. What’s more, when Stanford assessed how effective drafts might be at influencing policy, it was clear that chatbot models were still nowhere near able to do the bulk of a lobbyist’s work. However, what was noteworthy was the boost in performance that was seen between models released just months apart. Going forward, the use of AI will make digital advocacy campaigns significantly easier, but while letter writing might not be an obstacle, learning how to understand political networks and develop strategies to influence them will be the challenge for AI. Although AI will support human lobbyists’ to complete daily tasks, experts believe insiders, and money, will always offer an advantage. I sampled OpenAI’s ChatGPT and asked it several questions. What struck me was the speed and accuracy at which it generated responses akin to what one might expect from a university student answering an essay question. At the same time, it was apparent the responses lacked imagination, did not include persuasive arguments, and provided no story elements to place the issue in context. Among the questions I asked:

• Write a 500-word blog post about American politics, government affairs, and the 2024 presidential election. The focus should be on current events in the U.S. political sphere with the potential to impact the economy and international business.
• In 400 words or less write a blog post that summarizes what House Republicans will focus on during this year’s legislative session.
• Explain why nations are becoming more protectionist.
• How can businesses best use lobbying and government relations to improve their bottom lines?

However, it responded that it could not predict the future when asked “who will be the presidential candidates in 2024, and why; and which political party will control Congress after the 2024 election?” And it gave me an “error” message when I asked “what issues will the 2024 election turn on.”

Thought Leadership from our Consultants, Think Tanks, and Trade Associations

Eurasia Groups Predicts “Wokeism” Will be the Number One Target for GOP Presidential Contenders. The Republican primary field has expanded with biotech mogul Vivek Ramaswamy entering the race, railing against “Covidism, climatism, and gender ideology” in his campaign’s launch video. Ramaswamy may be the longest of long shot contenders, but his approach is perfectly in line with Republican voters and previews future higher-profile campaign efforts. Anti-wokeism is increasingly the core message to engage the GOP base, rather than rehashing the grievance politics of the 2020 election—a recent Stanford University study indicated that GOP candidates who denied the 2020 results underperformed their opponents by an average of 2.3 points. Meanwhile, the anti “woke” approach to Republican politics has played out most impactfully in state-level efforts to block environmental, social, and governance (ESG) guided investing and is quickly becoming a litmus test for potential GOP presidential contenders such as Florida Governor DeSantis and Virginia Governor Youngkin. While DeSantis and Youngkin used high-profile stunts like bussing migrants to Democratically controlled Northeastern cities and proposed bans on Advanced Placement (AP) high school courses to boost their anti-woke profiles, the approach is gaining steam at the federal level with the new GOP House majority. The House Financial Services Committee indicated that ESG investing will be a key focus for the coming year.  

Eurasia Group Explains the Clock is Ticking on TikTok’s Hopes of Retaining U.S. operations. With big implications for U.S. data governance, the Committee on Foreign Investment in the United States (CFIUS) has reached a tentative agreement, dubbed Project Texas, with TikTok to mitigate national security concerns and allow the company to maintain its American business. However, it remains unclear whether the agreement will mollify bipartisan concerns in Congress. Concerns revolve not only around TikTok’s handling of the personal data it collects from its more than 80 million active users in the U.S., but also Chinese government influence over the content that TikTok presents to its users. Project Texas would address national security concerns by creating a new subsidiary, governed by an independent board of directors, and overseen by CFIUS to govern access to TikTok’s U.S. user data. Although Project Texas would secure user data beyond anything being done by other social media platforms, lawmakers are working on legislative proposals that would go even further, including prohibiting American entities from transacting with Chinese social media companies. Not only might the CFIUS mitigation plan fail to placate policymakers, but it also has immense implications for the future of internet governance; in essence, other governments could also demand internet multinationals set up subsidiaries to localize data, which would entail high compliance costs and inhibit the development of AI solutions and breakthroughs. What’s more, Congress is considering passing privacy legislation making U.S. user data an export-controlled item.

Observatory Group Expects the Federal Reserve to Implement More Rate Hikes on Renewed Inflation Risks. Inflation data revisions and new reports since February’s Federal Reserve decision paint a clear picture of renewed inflation risks, and have moved the ground under the central bank’s previous consensus. In fact, the economic environment is now more aligned with the “disappointing inflation data” scenario analysts have warned about for months. This scenario implies that the Fed Funds target range will peak above 5.0-5.25% (the FOMC’s current median projection) but probably no higher than 6%. Although there is still a lot of data to be released before the Fed has to provide guidance for additional hikes, let alone pull the trigger, the new baseline is that the FOMC will likely raise the policy rate above 5.0-5.25%. Even then, it will be very difficult to establish sustained slowing in the core rate by the May meeting, and then the Fed will have to think about prospects for its mid-June meeting decision.  

“Off the Record”

Abbreviated to CODEL in Washington-speak, congressional delegations, on paper, allow lawmakers to travel abroad to meet with world leaders, diplomats, and advocates on any number of national security issues. In practice, lawmakers who join them spend tenfold the amount of time together than they do on Capitol Hill each week. In fact, the trips are referred to as “secret weapons” in the gridlocked capital because the visits, intended to reassure allies, also help members of Congress foster human connections with the potential to shape future policy—even on issues unrelated to foreign affairs. With both chambers on recess, this week has seen an exorbitant amount of CODEL travel. Dozens of senators went to the Munich Security Conference, with different groups heading across the globe from there. One trip, spearheaded by Sen. Graham (R-SC), throughout Africa includes Democratic Sens. Menendez (NJ), Coons (DE), Heinrich (NM), Van Hollen (MD), and Kelly (AZ). According to the itinerary, Cindy McCain, U.S. Ambassador to UN food and agriculture agencies, is also joining. After leaving Munich, the group headed to Zambia and will travel to South Africa, Botswana, and Morocco before returning to Washington. The purpose of the trip is to “conduct fact finding missions, focused on the fight against HIV/AIDS through site visits, meetings/briefings, and informal substantive meals designed to provide a frontline look at the impact of U.S. government investments in PEPFAR.” In addition to the site visits, the itinerary includes a visit to Victoria Falls, one of the world’s largest waterfalls, and a trip to Botswana, where the itinerary recommends “rugged casual” attire for “conservation observations,” which appear to be safari trips. The final night will be spent in Casablanca, with no official business on the itinerary.

In Other Words

“These are not, like, the nine greatest experts on the Internet,” Supreme Court Justice Elena Kagan during oral arguments in the Gonzalez v. Google case, a lawsuit that could rewrite Internet law by arguing that tech companies should be legally liable for any harmful content their algorithms promote.

Did You Know

Former President Jimmy Carter is the longest living president in U.S. history. The 98-year-old has outlived two presidents who succeeded him along with his own vice president.

Graph of the Week

The global economy is weathering headwinds better than analysts’ previous expectations. Incoming data for Q4 2022 beat expectations, even as they point to continued slowing momentum. Global real GDP is forecasted to grow 2.3% in 2023, down from 3.3% in 2022—slight upgrades from last month’s forecast. Although GDP growth in the U.S. defied expectations in late 2022, high inflation and rising interest rates are still likely to tip the economy into a brief and mild recession potentially starting in Q1 2023. The U.S. is forecast to eke out 0.3% growth for 2023 as a whole, before rebounding to 1.6% in 2024.