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Trade Fact of the Week: Immigrant players have hit 32 of the Washington Nationals’ 50 home runs this year

Posted on by The Progressive Policy Institute

FACT: Immigrant players have hit 32 of the Washington Nationals’ 50 home runs this year. 

 

THE NUMBERS: Immigrants as share of population

United Arab Emirates   88%
Australia   28%
Canada   22%
Germany   15%
United States   15%
United Kingdom   13%
France   12%
Thailand     6%
Japan     2%
Indonesia   0.1%
China   0.1%

WHAT THEY MEAN:

In this evening’s Nationals-Braves game, the Nats’ 26-man roster features 10 foreign-born players: four from the Dominican Republic, three from Venezuela, and one each from Panama, Cuba, and Nicaragua. Soto (pictured below), Cruz, Franco, Hernandez, Robles, and Ruiz account for two-thirds of the team’s admittedly modest 50 home runs this year. The visiting Braves have eight international players — Venezuela three, Curacao two, Mexico, Cuba, and the D.R. one each. Both teams pretty well reflect MLB’s overall 28% share of international players. Meanwhile, before and after the game someone has to take care of the grass; while the Nats reasonably decline to publish stats on their groundskeepers, about 33% of all U.S. groundskeepers and building maintenance people are foreign-born. This small window on the U.S.’ immigrant workforce illustrates a sort of national “smile curve,” in which the immigrant workforce is especially large in tough, physical blue-collar work, and also in high-end glamor jobs. More generally:

The current edition of the BLS’ Labor Characteristics of the Foreign-Born Workforce, out May 22, found 26.4 million immigrant workers — combining foreign-born U.S. citizens, green card holders, employees on work visas, and undocumented — in the United States as of 2021. Their 17.3% share of America’s 152.6 million employed men and women is high in historical terms – more than triple the 5% of Nixon-era 1970 — though below the 20.5% peak President William Taft’s statisticians recorded in 1910. Definitional differences make the U.S. data hard to compare precisely to experience in other countries, but based on the World Bank’s figures for immigrant shares of population, the U.S. appears (a) far below the majority-immigrant populations of the Persian Gulf, (b) well above the mostly local East Asian workforces, and (c) fairly similar to other large, wealthy western countries. Parsing out BLS’ rather aggregated figures, and adding a few other sources, three particularly international sections of the American workforce are as follows:

Glamor Jobs: A lot of TV and prestige press exposure here. About 28% of major league baseball players and an identical 28% of professional basketball players were born abroad. In Hollywood, 45% of this year’s Oscar acting nominees, using the Best Actor/Actress and Best Supporting Actor/Actress nominations, are either immigrants or temporary visitors; in elite academia and culture, 43% of the U.S.’ Nobel Prize winners since 2000.

Labor-intensive Services: Blue-collar physical work seems very similar to the glamor jobs. At the peak, 50% of hired farmworkers (and 73% of crop pickers) are immigrants, and mostly non-citizens. Construction, and groundskeeping/building maintenance are a tier below, at 33% of construction workers and groundskeepers/building maintenance workers; next come food preparation workers, at 22% of the labor force.

Science and Technology: Immigrants, finally, play an outsize role in American science, technology and innovation. Overall, by the National Science Foundation’s count, 19% of America’s 36 million science and engineering workers, and 23% of the sci/tech workers with bachelor’s degrees and above, are either immigrants or work-visa holders, with India and China the top countries of origin. The peak, above even the farmworker platoons, comes in PhDs in computer science and engineering, where immigrants are respectively 60% and 57% of the workforce.

 

FURTHER READING

The Bureau of Labor Statistics’ most recent Labor Characteristics of the Foreign-Born Workforce brief, out May 2022.

And a quick table of the immigrant share of various U.S. occupations:


(Sources: Bureau of Labor Statistics for all workers, National Science Foundation for engineering and science workers; academic paper for patents, and MLB for baseball.)

Some historical data from the Migration Policy Institute.

And a concerned look ahead: Though attempted border crossings draw intense interest, Kansas City Fed researchers believe net immigration to the U.S. has actually dropped sharply since the mid-2010s — from about 1 million per year to 477,000 in 2020 and 245,000 in 2021 — under the combined pressure of COVID-related travel restrictions, reduced granting of work visas, and slower processing of naturalization petitions. Presumably the immigrant share of the workforce has dropped a bit; K.C. Fed staff worry about the implications for innovation, productivity growth, and inflationary pressure.

International perspective

The International Labor Organization counts 169 million “international migrant” workers as of 2019. This meshes imperfectly with the BLS count, as the ILO uses “all foreign-born workers” (including naturalized citizens) for countries which record these figures, but only “migrant” (i.e. non-citizen] workers for some other countries. This noted, the ILO report finds 32% of the world’s migrant workers in Europe, 27% in Canada and the U.S., 15% in the Middle East and 14% in Asia.

Top tier

MLB reports on the “internationally born” players of 2022.

… the Washington Nationals roster, with birthplaces and links to the depressing 2022 pitching and power-hitting stats.

… and a look at Dominican Republic baseball.

The NBA comparison.

Hollywood’s 2022 Oscar nominees.

And the 2021 Nobel Prize winners.

On the land

The USDA on America’s 1.2 million hired farmworkers.

Science and technology 

National Science Foundation on the native- and foreign-born sci/tech workforce.

And Stanford researchers Bernstein/Diamond/McQuade/Pusada on the immigrant role in patenting and innovation.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007).  He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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Marshall in NYDN: Democrats’ unpopular anti-tech crusade

Posted on by The Progressive Policy Institute

By Will Marshall

President Biden’s policies have helped to subdue the COVID pandemic and put people back to work. But he’s getting little credit because Americans are transfixed by soaring prices for fuel, food and other necessities.

Inflation hovers like an alien spaceship over the Democrats’ midterm election prospects. U.S. voters say they trust Republicans over Democrats to handle it, by a whopping 19 points. They also give Republicans a 14-point lead on managing the economy.

To make matters worse, some congressional Democrats are pressing for a vote this summer on ill-conceived “antitrust” legislation aimed at dismantling America’s most innovative and competitive tech companies.

With inflation eating away at working families’ purchasing power, it’s hard to imagine a more effective way for Democrats to show they are out of touch with voters’ everyday economic struggles.

Yet again, party leaders again are letting the progressive left’s ideological zeal dictate their economic agenda. That’s triggered private grumbling by some Senate Democrats facing competitive re-election campaigns this fall. California Democrats who represent lots of tech workers understandably are balking, too. In general, however, the party’s pragmatic, pro-growth wing, which should be a forceful champion for U.S. high-tech innovation, has yet to find its voice.

Sens. Amy Klobuchar and Chuck Grassley, architects of the Senate anti-tech bill, insist that it’s a popular and bipartisan measure. But there’s no discernible public groundswell for breaking up or drastically regulating big tech companies. In fact, market concentration and antitrust don’t even register when voters are asked to name their top concerns.

Instead, the anti-tech crusade springs from the fevered brow of the nation’s political class. It’s propelled mainly by left-leaning academics, activists and journalists, business-bashing liberals like Sen. Elizabeth Warren, and a smattering of Trumpist Republicans like Sens. Ted Cruz and Josh Hawley. The left claims that “Big Tech” uses its market power to quash competitors, while the right whines about social media platforms censoring Donald Trump and other veracity-challenged conservatives.

Americans do have some qualms about big tech companies, even if they aren’t top of mind. In opinion research PPI has commissioned, battleground voters were most worried about their privacy and data security. They are less concerned about market power, and in fact are more inclined to see the size of U.S. tech companies as an advantage for our workers and economy.

Although presented as an update of U.S. antitrust laws, the Senate bill does not tackle market concentration across the U.S. economy. Instead, it draws a bead on a handful of big tech companies: Alphabet (formerly Google), Apple, Amazon, Meta (formerly Facebook) and perhaps Microsoft.

The anti-tech coalition evidently sees big as synonymous with bad. Amazon, they say, takes advantage of network effects to drive consumers to its online marketplace and provide popular products and services that brick-and-mortar stores can’t match. The big platforms also are accused of preferencing their own products and services in searches, even though the same could be said about the shelf placements in your friendly neighborhood grocery stores. Apple and Android control the sale of apps for their smartphones not to assure quality and data security, but to rake off lucrative fees. All the companies are accused of gobbling up potential competitors.

Big, powerful companies always merit close scrutiny. But tech’s foes haven’t made a convincing case that they harm U.S. consumers, throttle competition or stifle innovation in the vibrant tech-ecommerce ecosystem.

Consumers won’t be happy if Congress forces tech platforms to cut back or spin off integrated services they’ve come to rely on, such as Google Maps and Amazon Prime’s free next-day shipping. Google’s instant search results would be subject to endless second-guessing by regulators and rivals. People might lose access to Amazon Prime as well as the “Fulfillment by Amazon” services offered to hundreds of thousands of small businesses that sell on the behemoth’s platform. Smartphone users could be vulnerable to malware installed on side-loading apps not vetted by device manufacturers.

U.S. workers wouldn’t be any better off either. According to calculations by PPI economist Michael Mandel, the tech-ecommerce sector has replaced the health-care industry as the economy’s biggest job creator, over the past five years accounting for 40% of all job growth in the U.S. economy.

These jobs also pay well. Average tech-ecommerce pay is higher than average manufacturing pay in almost every state, says Mandel. Production and nonsupervisory workers in the warehousing industry, which includes most fulfillment centers, have seen their hourly pay jump by 15% over the past year.

While all sectors have been hit by rising prices, inflation has been notably restrained in the digital sector — the opposite of what you’d expect if it were truly dominated by tech monopolists busy snuffing out competition. Online prices increased by only 2.9% in April compared to a year earlier, according to the Adobe Digital Price Index.

Finally, unraveling the nation’s most dynamic tech companies would undermine U.S. innovation and global competitiveness. Biden says America is locked in a race with China for tech mastery; gutting tech companies would be akin to shooting ourselves in the foot.

So Democrats have a choice to make. Will they join left- and right-wing populists in taking a sledgehammer to America’s most successful companies? Or will they look to correct abuses in a smart way that doesn’t hamstring innovative companies that are investing at home, creating good jobs, keeping prices low, and helping America outcompete China?

Marshall is the president and founder of the Progressive Policy Institute.

Read more in New York Daily News.

Trade Fact of the Week: The U.S. trade deficit rose about 50% from 2016 to 2021

Posted on by The Progressive Policy Institute

FACT:

The U.S. trade deficit rose about 50% from 2016 to 2021.   

 

THE NUMBERS: 

Q1/2022    -4.9%
2021          -4.0%
2016          -2.7%
2005          -5.7%*

* Highest on record; GDP stats begin in 1929. Deficits for 1815-1816 may have been higher, but GDP for those days is guess-work. In dollar terms, the 2016 deficit (goods/services) has grown by about 80%, from $481 billion; to a 2021 deficit of $861 billion.

WHAT THEY MEAN:

The Trump administration’s first “President’s Trade Agenda” report, released in March of 2017, cited U.S. manufacturing trade balance data as an index of the failures of previous administrations:

“In 2000, the U.S. trade deficit in manufactured goods was $317 billion. Last year it was $648 billion — an increase of 100%.”  

The next “President’s Trade Agenda” report of 2018 used “bilateral” trade balance to assert a failure of the North American Free Trade Agreement and set a goal for the “USMCA” which succeeded it:

“Our goods trade balance with Mexico, until 1994 characterized by reciprocal trade flows, almost immediately soured after NAFTA implementation, with a deficit of over $15 billion in 1995, and over $71 billion by 2017.” … “USTR has set as its primary objective for these renegotiations to improve the U.S. trade balance and reduce the trade deficit with the NAFTA countries.”

The two assertions’ use of trade-balance data as a way to judge policies have well-known logical,* data,** and economic theory*** problems. This duly noted, how do they look on their own terms five years later? By 2021, U.S. exports had dropped from the 11.9% share of GDP they held in 2016 to 10.8%; imports, meanwhile, had grown a bit from 14.6% to 14.8% of GDP. Here then are the same two trade-balance statistics for 2021 and (very tentatively, based on one quarter’s worth of trade data) so far in 2022:

1. The U.S. manufacturing deficit in 2021 was $1.07 trillion. The last four months’ data suggest a 2022 total somewhere around $1.3 trillion. If this ends up about right, the 2016 manufacturing deficit noted in the 2017 “President’s Trade Agenda” would have doubled in five years.

2. The trade balance with Mexico (again, goods only) was $108 billion in 2021, a year after USMCA implementation. It looks likely to top $125 billion in 2022, with tariffs on Chinese consumer goods still shifting some purchasing of TV sets, auto parts, etc., to Mexico.

* The “post hoc, ergo propter hoc” fallacy.
** Comparison of nominal-dollar balance in 2000 to the nominal-dollar balance in 2016, unadjusted for inflation.
*** Global trade balance will always equal national investment minus national savings; if tax cuts and large fiscal-stimulus programs reduce savings, trade balances will automatically go into deficit unless investment collapses for some reason. So the 2017 comment is not a useful comment on trade agreements, and the 2018 objective likely not one achievable through policy. 

 

FURTHER READING

Data

The Census Bureau’s U.S. monthly trade data, through April 2022.

… and the U.S./Canada/Mexico balances.

…  and for the big picture, U.S. exports, imports, and balances from 1960-2021 on one convenient page.

What happened? 

Trumpism leaves a larger deficit overall, and more concentrated in manufacturing than the 2016 figures. Why the jump?

Tax policy, followed by heavy COVID-era fiscal stimulus, are the obvious suspects. Three of the four upward ratchets in U.S. trade deficits since the 1970s followed tax-cut bills — one in the first Reagan term, another in the second Bush administration, and the third in 2017.  With higher fiscal deficits, and without an offsetting rise in family or business savings, overall U.S. savings will fall.  All else equal, the “savings – investment = trade balance” identity means higher trade deficits. The Trump-era tariffs, though not likely the cause of the overall deficit growth, have two likely balance effects:

(a) Shifting import sources: Imports from China, though above pre-tariff levels in dollar terms, were 21.6% of goods imports in 2016, and about 17% in 2021. With clothes, consumer electronics, etc., from Vietnam, Mexico, India, Taiwan, and so forth replacing about $100 billion in Chinese-origin goods, the higher USMCA deficit reflects this shift.

(b) Shifting sectoral composition: Trump-era tariffs on steel, aluminum, and Chinese goods are concentrated in industrial inputs such as metals, auto parts, electrical converters, etc. As U.S. manufacturers — automotive, machinery, beer and soda canners, tool-makers, etc. — absorb these costs, they are likely to lose some marginal competitiveness whether in exporting or competing against imports. This likely pushes more of the U.S deficit into manufacturing.

The two reports:

The 2017 “President’s Trade Agenda.” 

… and the 2018 followup (with a wildly wrong claim that the 2017 tax bill “has the potential to reduce the U.S. trade deficit by reducing artificial profit shifting).

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007).  He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week

Ritz for Forbes: Congressional Democrats Just Offered Their Best Inflation Plan Yet

Posted on by The Progressive Policy Institute

By Ben Ritz

Democrats have been struggling to respond to the highest inflation America has seen in 40 years. Many on the left are pushing a bogus “greedflation” narrative that blames rising prices on corporations’ desire to maximize profits, as if that were some new phenomenon. Others have proposed to compensate consumers for higher prices with cash handouts that will likely only make the problem worse. And Republicans, who sharply criticize Democrats’ approach to inflation, have offered no constructive ideas of their own for tackling the problem. Thankfully, the moderate New Democrat Coalition (NDC) came forward today with a pragmatic 24-page Action Plan to Fight Inflation — and it’s the best inflation-fighting blueprint to come out of Congress yet.

Fighting inflation requires an understanding of what drives the problem. First, supply chain disruptions caused by the COVID pandemic reduced the availability of goods and services. Then demand for those goods and services, bolstered by excessive government stimulus, reached unprecedented levels as the world began returning to normal. The result: too many dollars chasing too few goods and services, thus driving up prices. The problem was only made worse when Russia’s unjustifiable invasion of Ukraine cut off food and fuel exports.

Read the full piece in Forbes.

Inflation Strain is Eased by the Digital Sector, Finds New Report from PPI’s Innovation Frontier Project 

Posted on by The Progressive Policy Institute

A new report from the Progressive Policy Institute (PPI)’s Innovation Frontier Project finds inflation in the digital sector is still low, despite rapid price increases in much of the rest of the economy. Moreover, the deflationary influence of the digital economy has not been fully captured in official measures of inflation

The report is authored by world-renowned economist Marshall Reinsdorf, and is titled “Is Inflation Still Low in the Digital Economy?”. Prior to opening his own independent research consultancy, Mr. Reinsdorf was senior economist at the International Monetary Fund and president of the International Association for Research in Income and Wealth. Prior to joining the IMF, he was chief of the National Accounts Research Group at the U.S. Bureau of Economic Analysis.

“Given the value of technology in moderating inflation, policymakers should seek opportunities to promote uses of digital technology to enhance growth and promote price stability,” writes report author Marshall Reinsdorf.

“Four decades of relatively low inflation have made the current inflation figures particularly troubling. Over this same time, advances in the digital economy have greatly increased the speed of communication and access to information, saving Americans substantial amounts of time and money. Given these continuous improvements, recent inflation figures may be overstated. More accurate price reporting would help economic policymakers and consumers take action to counteract inflation’s effects on government and household budgets,” Mr. Reinsdorf concludes.

Reinsdorf also lays out why the frequent introductions of new models and new products and rapid growth of e-commerce make inflation in the digital economy challenging to measure. Correcting these blindspots would give economists and policymakers a better picture of the role of the digital economy in easing inflation.

Read the report and expanded policy recommendations here:

Based in Washington, D.C., and housed in the Progressive Policy Institute, the Innovation Frontier Project explores the role of public policy in science, technology and innovation. The project is managed by Jack Karsten. Learn more by visiting innovationfrontier.org.

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.

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Media Contact: Aaron White; awhite@ppionline.org

Repeating Old Mistakes on Broadband

Posted on by The Progressive Policy Institute

In a June 2021 paper, “A Radically Pragmatic Agenda to Connect Rural America,” we carefully examined the history of federal programs to provide broadband to everyone. We found that:

 

  • The federal government spent a stunning $105 billion on broadband- and telephone-related initiatives from 2010 to 2019. This total includes both grants and loans, and is reported in 2019 dollars.

 

  • The funding programs for broadband put in place after the financial crisis of 2008-2009 were spread out over far too many unrelated purposes, rather than focused on expanding coverage to unserved areas.

 

  • As a result, far too little progress was made in closing the broadband gap, especially given the size of the federal funding.

 

As we wrote in the 2021 paper, “no matter how many billions of dollars are allocated, history shows that the money can be spent unwisely if policymakers are not careful.”

Unfortunately, the Biden Administration seems determined to repeat history. The Notice of Funding Opportunity issued by NTIA to allocate funds for the “Broadband Equity, Access, and Deployment Program” (BEAD) is filled with requirements that will divert attention and money away from the fundamental task of connecting unserved Americans. In particular, the NOFO requires that:

….each Eligible Entity must include in its Initial and Final Proposals a middle-class affordability plan to ensure that all consumers have access to affordable high-speed internet (emphasis in original).

The first problem, of course, is that “middle-class affordability” is a moving target. The second problem is that the NOFO suggests that applicants fulfill this requirement by a variety of approaches, all of which suck money away from the primary goal of connecting the unserved. For example, the NOFO proposes that:

….some Eligible Entities might require providers receiving BEAD funds to offer low-cost, high-speed plans to all middle-class households using the BEAD-funded network.

Of course, that requirement will either discourage providers from building a BEAD-funded network, or reduce the amount of money available for building new connections to the unserved.  In either case, less money for connecting the unserved.

In addition, the NOFO also allows applicants to apply money towards “non-deployment” uses, including but not restricted to user training, computer science education programs, and prisoner education. All of these are worthy uses, but don’t move the ball forward in terms of broadband connections.

As we said in the 2021 report, we have a “once in a lifetime opportunity.” If Democrats want to finally close the broadband gap, especially in rural areas, they need to make sure that the $45 billion is used in a focused way — to connect the unserved.

Marshall for The Hill: Putin sets the stage for NATO’s second act

Posted on by The Progressive Policy Institute

By Will Marshall, President of PPI

The North Atlantic Treaty Organization (NATO) – the most successful and enduring mutual security pact in history – is about to start its second act. In Act 1, the United States played the leading role in deterring Russian aggression and keeping the peace in Europe. In Act 2, Europeans will take center stage.

With longtime neutrals Sweden and Finland knocking on its door, NATO likely will grow to 32 members. For the transatlantic allies, however, the wise course isn’t merely to expand NATO, but to reinvent it.

How to seize that opportunity – which goes well beyond hackneyed calls for greater “burden-sharing” – should be the focal point of NATO’s Madrid summit later this month.

NATO should be fundamentally reconfigured to reflect three geopolitical realities. First, since its creation in 1949, the alliance has expanded dramatically as many of Europe’s ancient feuds and rivalries have been subsumed within pan-European values and institutions.

Second, NATO’s 27 European members (excluding Turkey) vastly exceed Russia in economic clout, population and military spending. Third, America inexorably is turning its strategic gaze to China and the balance of power in Asia.

Read the full piece in The Hill. 

Wrong timing for tech antitrust bills?

Posted on by The Progressive Policy Institute

Energy and food inflation concerns loom large for voters heading into the second half of 2022 and the midterm elections. Meanwhile the odds of recession are rising and expected growth is falling, according to economic forecasters surveyed by the National Association of Business Economists.

With these bread-and-butter issues on the table, is this the right time for Senate Democrats to spend time debating and voting on Senator Amy Klobuchar’s tech antitrust bill? Voters are not going to feel inflation relief from the bill. Remember that the tech sector is not the source of surging inflation, no matter how you look at it. For example, e-commerce, like every other industry, has been affected by rising fuel prices and supply chain disruptions. But BLS data shows that ecommerce margins — the difference between the acquisition price of goods and the sale prices — narrowed by 3% over the past year, benefitting consumers. By comparison, margins for the entire retail sector widened by 12%, giving an extra jolt to inflation.

And Senate Democrats won’t be able to point to the tech antitrust bill as a source of new jobs in case of a recession. Indeed, the timing is precisely wrong. The big tech companies showed their willingness to keep investing and hiring during 2020 and 2021, helping keep the U.S. economy afloat. Moreover, real wages are rising in the tech/ecommerce sector. That job and investment performance is unlikely to be repeated even if the Klobuchar legislation works exactly as proponents expect, since the bill is intended to restrain growth by the big tech companies and smaller rivals are not going to expand during a recession.

Whether or not you think that tech antitrust is a good idea in theory, this is the wrong time.

Trade Fact of the Week: There are no shortages of infant formula in New Zealand, Europe, Canada, or Australia

Posted on by The Progressive Policy Institute

FACT:

There are no shortages of infant formula in Europe, Canada, Australia, or New Zealand.

 

THE NUMBERS: 

130,000 tons    New Zealand infant formula exports to world, 2021
0 tons               New Zealand infant formula exports to U.S., 2021

 

WHAT THEY MEAN:

A cautionary tale this spring, as White House officials and Congress consider hopes and plans for supply-chain “reshoring,” “resilience,” and import management: In the U.S., dairy vies with sugar as the most tightly policed trade product. According to the White House, 98% of formula in the U.S. is locally manufactured from milk from American dairy cows. The remaining 2% is mainly from Mexico, otherwise, about 2,000 tons come from Ireland, 1,300 tons from Chile, and 600 tons from the Netherlands. The result is a plausible claim to be America’s most completely on-shored, “post-neoliberal,” localized supply chain.

New Zealand, meanwhile, is (likely) the world’s most dairy-centered country. It is second only to Uruguay in cows-to-people ratio; first in the world for total dairy exports; and second to the Netherlands as an infant formula exporter, sending 130,000 tons per year to China, Australia, Hong Kong, Southeast Asia and other destinations.

New Zealand has a lot of formula.  With American stores suddenly short of it after the recall at the U.S. plant in Sturgis, Mich., we don’t have enough. Here, though, is what grocery store managers hoping to restock with New Zealand formula would need to do:

(1) Fit your purchase, by weight, within an annual global quota limit of “4,105 tons”* “other dairy products.” Most of this is already filled by formula and other non-cheese products from Ireland, Chile and the Netherlands; and in any case, to apply you would need to USDA quota regulations as follows: “A person may annually apply for a nonhistorical license for articles other than cheese or cheese products (Appendix 2) if such person meets the requirements of paragraph (b)(1)(ii) of this section.”

Paragraph (b)(1)(ii) in turn, related to purchases “where the article is not cheese or cheese product,” says you must be:

“(A) The owner of and importer of record for at least three separate commercial entries of dairy products totaling not less than 57,000 kilograms net weight, each of the three entries not less than 2,000 kilograms net weight;

“(B) The owner of and importer of record for at least eight separate commercial entries of dairy products, from at least eight separate shipments, totaling not less than 19,000 kilograms net weight, each of the eight entries not less than 450 kilograms net weight, with a minimum of two entries in each of at least three quarters during that period;

“(C) The owner or operator of a plant listed in the most current issue of “Dairy Plants Surveyed and Approved for USDA Grading Service” and had manufactured, processed or packaged at least 450,000 kilograms of dairy products in its own plant in the United States; or

“(D) The exporter of dairy products in the quantities and number of shipments required under (A) or (B) above.

“(2) Succeeding in this, you must make sure your supplier meets the Food and Drug Administration’s rules for labeling, ingredients, and preparation, which FDA inspectors verify factory-by-factory. Reasonable in itself, though New Zealand’s child health and food-borne illness statistics compare quite well to America’s.

“(3) Pay a 17.5% tariff. (Or a much higher one, “$1.035/kg + 14.9%”, if you’re trying to buy product that exceeds the quota.)”

In practice, at least on short notice, no one seems able to do all this.  So the fully on-shored, non-global supply chain turns out to be very brittle. With the Sturgis factory down and import quotas already filled, there’s no alternative, the shelves quickly go bare, and Air Force planes fly around the world trying to scrape up whatever they can find in Europe. A tactful comment from Jan Carey of New Zealand’s Infant Nutrition Council:

“I think it does show weakness in their policy. … We can speculate that [this crisis] might make the Food and Drug Administration consider why they make it so difficult for, other entrants to come into the market. Why can’t they make it a bit easier to get it in? We have such fantastic products in New Zealand, our products are highly regulated under the Food Standards code for Australia and New Zealand and they meet all of the nutritional requirements of an infant.”

What do we draw from this? Probably a lot of lessons for formula policy specifically. Also, a case study in “localized” supply chains with tight controls over sourcing, which may have some general relevance.

* Mexico is outside this limit with essentially unlimited rights under NAFTA and its successor the USMCA, and provided 12,000 of the 16,800 tons of formula entering the U.S. last year. Canada, in theory, gets a bit more under the USMCA than it did under NAFTA, but hasn’t used it.

 

FURTHER READING

We don’t have enough

The FDA explains its regulatory system.

… and announces some easing of import rules.

… while the USDA scrambles to find formula for WIC (Women, Infants, and Children) program users.

… and the Air Force ferries back 35 tons.

President Biden announced actions to address the formula shortage.

They have lots 

The U.S. Department of Agriculture examines the New Zealand dairy industry, with data on infant formula production and trade.

New Zealand’s Infant Nutrition Council on formula shortages in the U.S.

And New Zealand government’s child health and safety stats.

Formula trade policy

Tariff rates from U.S. International Trade Commission, the Harmonized Tariff Schedule. See Chapter 19, heading 190110, for infant formula.

Apply for a “dairy import license” from USDA, here.

… but read up on the regulations first.

And also…

“If you want to scare a room full of [economists], talk about breastmilk” — UC-Davis’ Kadee Russ on inadequate U.S. support for breastfeeding moms.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007).  He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week

We need to address the rising epidemic of violence on our children

Posted on by Alyssa Brown

According to the most recent civilian casualty update by the Office of the High Commissioner for Human Rights (OHCHR), 406 Ukrainian children (age 0-17) have been killed since the Russian invasion commenced in February.

Since the beginning of 2022, 658 American children (age 0-17) have been killed in gun-related incidents.

While it’s true that the likelihood of your child being killed in the Ukraine versus in the U.S. is about 5 times greater, why are the total numbers even this close? One country (the Ukraine) has been invaded by one of the largest and most advanced militaries in the world. The Russians, whose actions speak louder than words, have committed unimaginable atrocities against the Ukrainian people, and have shown no restraint when it comes to blowing to smithereens any site, strategic or civilian, to achieve their goals.

While America hasn’t been invaded and is not at war, we are suffering from a self-inflicted epidemic of violence on our children that is horrible in its own right. We have permitted military assault weapons to end up in the hands of individuals who never should have been allowed near them. This has resulted in more and more children dying needlessly, and more families suffering a loss so painful it can never be mended.

And while Congress and the President acted quickly and rightly to help Ukraine — weapons, economic sanctions, and humanitarian aid — they have been unable to address the rising gun violence on our children.

Since I served as chief of staff on the White House Domestic Policy Council 1990s, I have watched common sense approaches to reduce gun violence fall by the wayside. Not since the enactment of the Brady Law and the Assault Weapons Ban in 1994 has Congress gotten close to enacting reforms to our gun violence laws. Instead, bipartisan progress on the issue has been frozen in place, while the political rhetoric has heated up to a boiling point.

If we want a different outcome this time, then we must do three things. Both sides must acknowledge that no elected official wants anymore children to die; that we need to work together to achieve this goal; and a final bill is going to have to be a compromise, which means no one is going to be completely happy (except the majority of the American people).

To get the ball rolling, let’s take two ideas from Republicans and Democrats and pass a law. For Republicans, this could include more funding for armed school safety personnel and other physical safety measures, along with the codification of a federal school safety clearinghouse to share best practices. Democrats would get to include comprehensive universal background checks and red/yellow flag laws that would establish court and medical procedures to prevent those with mental health issues from purchasing or possessing firearms or ammunition.

None of these reforms would stop all gun-related school violence. But it could begin to turn the tide. And passing gun violence prevention legislation might just help to create some new lines of communication relationships among Republicans and Democrats, which could lead to more bipartisan progress down the road.

 

Ritz for Forbes: States Should Fight COVID, Not Worsen Inflation

Posted on by The Progressive Policy Institute

The federal government is running out of resources to procure COVID vaccines, tests, and treatments right as the nation faces yet another wave of infections. A $10 billion emergency appropriation to fund these critical needs has been stalled in Congress since March amid fights about how to pay for it and what amendments on other policy issues might be added to the bill. If federal policymakers can’t resolve these disputes soon, state governments should use the generous financial support Congress has already given them to step in and fill the void.

When the most-recent COVID relief bill was first introduced, Republicans insisted on paying for it by rescinding funds the federal government had previously promised to state and local governments in the American Rescue Plan Act that President Biden signed into law last year. They argued that state governments experiencing unprecedented budget surpluses didn’t need the money and excessive government spending was worsening inflation. House Speaker Nancy Pelosi prepared to hold a vote on a bill that met these demands, but a last-minute rebellion within her caucus scuttled the vote and it has been in limbo since while members of both parties continue to demand additional changes.

Continued stalling of this bill threatens to return America to the early days of the pandemic, when a failure of leadership by the Trump administration left individual states to fend for themselves and compete against one another in procuring equipment for health-care providers. States may have to pay higher prices or wait longer to purchase resources that the federal government could get more quickly as the world’s largest bulk buyer. And leaving COVID response to the states would almost certainly result huge inequities, as states with Democratic governors (and what remains of the GOP’s moderate wing in the Northeast) do more to protect their constituents from the virus than Trump acolytes like Florida Gov. Ron DeSantis.

Read the full piece in Forbes.

Kane for Newsweek: Republicans Are Blaming Mental Health for School Shootings After Refusing to Fund It

Posted on by The Progressive Policy Institute

By Arielle Kane

Texas Gov. Greg Abbott has blamed the recent Uvalde shooting on the shooter’s mental health problems. “We as a state, we as a society need to do a better job with mental health,” the governor said last Wednesday in the aftermath of the shooting. “Anybody who shoots somebody else has a mental health challenge. Period. We as a government need to find a way to target that mental health challenge and to do something about it.”

I don’t think anyone would argue that someone who murders defenseless young children is right in the head. But setting aside the mental state of this particular teenager, if Gov. Abbott believes that mental health is the problem, why hasn’t he done more to improve it?

Gov. Abbott has been governor since 2015, and since then, there have been roughly 13 mass shooting events in his state. Yet he has done nothing to expand access to mental health care. Texas has the highest uninsured rate in the country, with 17.3 percent of its population without health insurance. This is roughly twice the national average. Furthermore, Texas also has the most uninsured children in the country—roughly 1 million. Mental Health America rated the state dead last for overall access to mental health services.

But Gov. Abbott hasn’t just failed to expand access to health coverage; he has actively cut it.

Read the full piece in Newsweek.

Kane for The Hill: America’s pre-existing social condition: A permissive gun culture

Posted on by The Progressive Policy Institute

By Arielle Kane

Last week I sat down to write about the 1 million American lives lost to COVID-19 over the past two years. But on that Friday, I happened to be standing outside my home with my dog when a man was gunned down right in front of me. And then in the week after, there were multiple mass shooting events, including a racially motivated grocery store rampage and another incomprehensible elementary school shooting. I realized that I needed to address another plague: gun violence.

When the COVID pandemic first started to wreak havoc on our country in 2020, Americans ran out and bought 22 million guns — a 64 percent spike over 2019. This led to record gun homicides and non-suicide-related shootings that claimed approximately 19,300 lives, a 25 percent increase from 2019, and injuring tens of thousands more. While official data aren’t yet available, this trend continued into 2021 and 2022.

Gun violence is a result of many interacting factors — poverty, trauma, a lack of education, discrimination and – of course – American’s effortless access to firearms. And during the COVID pandemic, increased psychological distress, erosion of social networks, high unemployment and record increases in gun sales led to a pandemic of violence. Altogether, the nation tallied roughly 93,000 injuries and deaths (including suicides) from gun-related violence between Jan. 1, 2019, and March 31, 2021.

 

Read the full piece in The Hill. 

Marshall: Will Republicans Protect America’s Children?

Posted on by The Progressive Policy Institute

by Will Marshall

Americans traditionally have regarded public education as a formative institution integral to the success of democratic self-government. That’s why we’ve made it compulsory: By law, parents must send their children to public or accredited private schools, though exceptions are sometimes made for home schooling.

But if our government is going to require parents to send their kids to school, our elected representatives surely have a basic responsibility to ensure those schools are safe. The ghastly murder of 19 children and two teachers at Robb Elementary School in Uvalde, Texas tells us they’re failing in that duty.

According to The Washington Post, there have been 24 acts of gun violence in U.S. schools this year alone, which have claimed 28 lives. America is saturated in guns and an attendant epidemic of mass murder is spilling over into schools.

No one wants our schools to look or feel like fortresses or maximum-security prisons. In an open and free society, there is no such thing as 100 percent security.

But there are plenty of sensible steps U.S. leaders can take to make schools and other public places safer and mass shootings rarer. They just won’t take them.

“Why are we willing to live with this carnage,” an anguished President Biden asked. “Why do we keep letting this happen?”

They are the right questions, and the answer is obvious: Because of the Republican Party’s dogmatic opposition to common sense gun safety measures. It grows out of the right’s paranoiac and absolutist view that any limits on gun ownership and use will necessarily lead to extinguishing American liberty.

This is patently false, as a quick survey of how Great Britain, New Zealand and other free and democratic countries contain gun violence shows. But then today’s Trumpified GOP — steeped in a miasma of lies, conspiracy theories and tribal hatred — evidently is incapable of rationally discussing gun safety.

Despite mass shootings in Texas in 2019 and 2019, the Republican-controlled legislature has relaxed gun laws in each of its last two sessions, including passage of a law in 2021 allowing people to carry guns without a permit. Predictably, Texas Republicans are again calling for “hardening” schools, hiring more armed guards, and more resources for mental health — anything but making it harder for aspiring killers to get military weapons.

A modest step toward sanity would be to bar sales of assault weapons to anyone under 21. There’s no earthly reason why adolescent males — the suspects in both the Robb Elementary massacre and the recent attack in a Buffalo grocery store that killed ten Black shoppers were just 18 — should have easy access to war weapons.

Just as raising the legal drinking age to 21 did not usher in a return to Prohibition, keeping assault rifles out of the hands of impulsive teenagers won’t abrogate the Second Amendment. Why do Republicans apply a rigid absolutism only to gun rights?

After this week’s horrific display of human depravity in Texas, are Gov. Greg Abbott and Texas Republicans willing to take even this small step toward gun safety? Don’t bet the ranch — today’s Republicans can be counted on to put the inviolable rights of gun owners above protecting America’s children every time.

Looking ahead to the midterm elections, Democrats should make sure voters understand that GOP rhetoric about guaranteeing “parental rights” in education doesn’t include the right to safer schools for their kids.

Will Marshall is the President and Founder of the Progressive Policy Institute.

You can also read this post on PPI’s Medium. 

Ritz for Forbes: New CBO Report Underscores The Need For A Deficit-Reducing Reconciliation Bill

Posted on by The Progressive Policy Institute

By Ben Ritz

A new report from the nonpartisan Congressional Budget Office shows that the amount of money spent by the federal government each year to service our national debt is on track to reach unprecedented highs within the next 10 years. These findings should give Congressional Democrats renewed urgency to pass a reconciliation bill that reduces federal budget deficits before the political window for action closes later this summer.

The good news is that the 2022 edition of the CBO’s annual Budget and Economic Outlook, published Wednesday, showed this year’s federal budget deficit falling dramatically from its $3.1 trillion peak in 2020. The decline was due almost entirely to the expiration of stimulus programs created to shepherd the economy through the COVID pandemic, and the rapid economic growth those programs helped facilitate. But these stimulus measures also came at a cost: They both increased our national debt and contributed to higher rates of inflation, which the Federal Reserve is now rapidly raising interest rates to combat.

Read more in Forbes.

PPI’s Trade Fact of the Week: 1 in 25 of all humans ever have accessed the Internet

Posted on by The Progressive Policy Institute

FACT:

1 in 25 of all humans ever have accessed the internet.

THE NUMBERS: 

All humans, ever:        ~117.0 billion*
All humans, 2022:             7.9 billion
Internet users, 2022:         5.3 billion

* Population Research Bureau estimate, 2021

WHAT THEY MEAN:

Posted three weeks ago, the “Declaration for the Future of the Internet” joins the Biden administration and 60 other governments in an attempt to define the principal challenges to the digital future and set a direction for policies to address them. A few bits of data first:

According to the International Telecommunications Union, 4.9 billion people around the world used the Internet last year. A less official update from WorldInternetStats.com this spring finds 5.3 billion. This is just over two-thirds of the world’s 7.9 billion people, up from 50% at the end of the Obama administration, and about 1% in faraway 2000. Put another way, demographers at the Population Research Bureau calculate the total human population since the origin of the human species about 300,000 years ago at 117 billion.  If this is about right, today’s Internet users make up one in 25 of all the men, women, and children who have ever lived. This year they will:

… transfer roughly 100 zettabytes of data around the world via fiber-optic cable and satellite beam. (A zettabyte is 1 sextillion bytes. The European Space Agency believes the universe contains somewhere between 100 sextillion and 1,000 sextillion stars.)

… conduct $26.7 trillion in electronic commerce, by UNCTAD’s 2022 estimate. (The International Monetary Fund believes global GDP this year is $103 trillion.)

… and spend 4.2 trillion hours on social media. (This sums to 479 million years, roughly the time elapsed since the “Cambrian Explosion.” Alternatively, the longest recorded single lifespan, that of Arles resident Jeanne Calment, 1873-1998, was 0.00000000012 trillion years.)

Another way to put these figures in context: at the birth of the Internet somewhere in the 1980s, a statistician might count a few million bytes of data transferred across early computer networks, about $0 in electronic commerce, and a few thousand academics and government officials berating each other on electronic bulletin-boards.

So, quite a remarkable first generation.

After appropriately noting this fact and recognizing the scientific and technical achievement that enabled it, the Declaration for the Future of the Internet focuses on (a) emerging policy challenges for the second generation, and (b) the values and goals that should inform a response to them. Top concerns include:  escalating use of digital technologies, in some cases by governments, for disinformation and cybercrime; spread of national firewalling and restriction of information, also by governments; fears among many users of loss of privacy and eroding ability to control personal data, whether to governments, unscrupulous businesses, or criminals; and abuse of online platforms to inflame conflict, undermine respect for human rights, and threaten groups vulnerable to prejudice and hate.

The Declaration offers no specific technical measures or agreements to address these concerns, nor new venues in which governments and/or “multistakeholder” fora should develop them. Instead, it sets out a long-term objective — “an environment that reinforces our democratic systems and promotes active participation of every citizen in democratic processes, secures and protects individuals’ privacy, maintains secure and reliable connectivity, resists efforts to splinter the global Internet, and promotes a free and competitive global economy” — and proposes five general principles to inform the actual policies that might deliver this:

1. “Protection of Human Rights and Fundamental Freedoms,” including combatting online violence and exploitation, reducing illegal content, and protecting freedom of expression.

2. “A Global Internet,” in which governments are discouraged from restricting access to lawful content, or shutting down access generally or to specific types of information, and encouraged to support free flows of data, cooperate in research and development, and act responsibly themselves.

3. “Inclusive and Affordable Access,” including through closing digital divides, encouraging diverse cultural and multilingual content, and supporting digital literacy and skills for publics.

4. “Trust in the Digital Ecosystem,” involving common responsibilities to combat cybercrime, protect personal data, use trustworthy technologies, avoid attacks on elections, support open trade and fair markets, and minimize digital contributions to climate change emissions.

5. “Multistakeholder governance,” to support technical advance and avoid undermining technical infrastructure.

 

 

FURTHER READING

Via the White House, the Declaration for the Future of the Internet.

A signers list from the State Department: 39 governments in Europe, five in the Pacific, three in Africa, one in the Middle East, and nine in the Western Hemisphere. (Some puzzling non-participants — Korea? Switzerland? Norway?)

And looking back: In the 50-million-internet-user world of 1997, the Clinton administration imagines policies for today’s digital global market.

BEA on the American digital economy in 2020 (with quiet side note to BEA, the dots are three places off to the right on page 4).

UNCTAD on global e-commerce.

The Internet Society’s attempt to document the actual “launch of the Internet” date. Authors settle on the January 1, 1983, transition of U.S.-based academic and government networks to an interoperable TCP/IP protocol:

Geneva-based CERN, on the other hand, looks to Berners-Lee’s 1989 WWW software, and the first web-site launch.
And some fun with 2022 Internet numbers
100 zettabytes – The European Space Agency calculates stars in the heavens.

1 in 25 humans: The Population Research Bureau counts all the people who have ever lived.

4.2 trillion person-hours of social media: Stephen Jay Gould’s Wonderful Life (1989); Gould’s theses on the Cambrian’s possibly wider variety of phyla are not in favor, but still the best ever user-friendly descriptions of Anomalocaris, Opabinia, and the weird world of the first big animals.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007).  He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week