We believe that there is an unmet demand in this country for a revival of patriotism that politicians of both parties appear incapable of meeting, write AEI’s Ruy Teixeira and Karlyn Bowman.

At $1.5T, the FY27 defense budget is the largest one-year increase (% & $) since the Korean War. But the topline is the least interesting part. My new @AEI working paper identifies four discontinuities buried inside this budget and the challenges they create. 🧵

0.2% monthly core CPI was right on the bubble. A lower print would have taken some pressure off the Fed. A higher print would have added to the pressure. But this did neither. Still, the Fed needs to hike rates. 0.2% monthly July core CPI is consistent with 3.3 percent annual July core PCE. Core PCE has been increasing for over a year. The unemployment rate has been low and stable for two years. Financial conditions are arguably easier than they were one year ago, and have been stable or falling over the summer. Great to be on @SquawkCNBC. Link in the next post.

NEW | Some observed indicators suggest that the Iraqi federal government is considering a major crackdown on Iranian-backed Iraqi militias, including by entering and retaking militia-controlled strongholds. Such an effort would require major mobilization, and the militias would likely be aware of any pending crackdown. Previous Iraqi administrations, particularly under former Prime Minister Mustafa al Kadhimi, have conducted limited crackdowns on militia activity, but the combination of the Iranian infiltration of Iraqi government institutions and the strength of the Iraqi militias limited the scale of such efforts. The US’ pressure on Zaydi to disarm the militias could compel him to act against the militias despite these limitations. US efforts to compel Baghdad to disarm the groups have only increased due to militia attacks against US and foreign targets in Iraq and the region in March and April, as well as in recent months. Islamic Revolutionary Guards Corps (IRGC) Quds Force Commander Brigadier General Esmail Ghaani warned Iraqi militia leaders against armed confrontation with the Iraqi government and to reach a settlement to avoid handing over militia weapons to the state during an August 10 visit to Baghdad, according to informed sources speaking to Iraqi media. Ghaani likely discussed Iranian-backed Iraqi militias' recent attacks on Gulf states, namely Saudi Arabia, during his visit to Baghdad. Iranian leaders, including Ghaani, are likely attempting to draw the Iraqi government away from developing alternative oil export corridors to the Strait of Hormuz. Iranian leaders also almost certainly intend to preserve Iran’s leverage over regional states, the United States, and the global economy by promoting an arrangement that would offer Iraq short-term economic relief and reduce Iraq’s incentive to develop alternative oil export corridors to the Strait. A sustained US naval blockade could increase economic and political pressure on Iran and may eventually compel at least some regime officials to accept greater concessions in negotiations. The Iranian regime’s recent appointments suggest that the officials who currently dominate decision-making may be less responsive to that pressure and more inclined to maintain maximalist positions, however.

We’ve grown all too familiar with destructive policies enacted under the banner of compassion and equity. But we don’t have to accept them, writes AEI’s @continetti on the University of Michigan’s new first-semester grading policy.

In the latest Coalition Defense of Taiwan update, AEI’s @DAlexBlumenthal examines Japan’s ongoing defense reforms, PLA Navy plans to expand its aviation assets, and the PRC’s response to Philippine territorial claims to the UN over the Scarborough Shoal.

"Mr. Strain said he generally agreed with much of the president’s 'general approach' in seeking to foster A.I., and that he believed the technology would benefit the economy and national security." "As Voters Grow Anxious Over A.I., Trump Shrugs Off the Concern," by @TonyRomm.

One aspect of the DSA’s appeal has been too often overlooked, particularly by conservative critics: its appeal as a form of instant community for a generation that often lacks one, writes AEI's Christine Rosen.

On @themimsshow, AEI’s Ruy Teixeira spoke with @jameshohmann about the growing influence of the Democratic Socialists of America and the Democratic Party’s continued struggle with working-class voters.