Category: Uncategorized

Marshall and Osborne for The 74: ‘Free College for All’ Is a Non-Starter for Many Voters. New Poll Shows Why Talking Point Is Dangerous for Democrats

Posted on by The Progressive Policy Institute

Sadly, education has been all but ignored in this year’s Democratic primaries. But a new poll commissioned by the Progressive Policy Institute points toward one reason Sens. Bernie Sanders and Elizabeth Warren have not lived up to their supporters’ hopes: Their embrace of free college and paying off all student debt strikes many voters as elitist.

Because narrow victories in Michigan, Wisconsin and Pennsylvania gave Donald Trump his Electoral College win in 2016 — even while he lost the popular vote by 3 million ballots — PPI recently commissioned a poll in those states.

Much of the poll, by Expedition Strategies, dealt with health care, the economy, taxes, business and climate change. (You can find the entire poll here.) But when pollsters asked about promises of free college and the elimination of student debt, the response was anything but enthusiastic. To many voters, these are elite preoccupations that compound the advantages of the already privileged college-going cohort at their expense.

Read the full piece here.

Statement: New Business Preservation Act Provides Much Needed Capital to Startups

Posted on by The Progressive Policy Institute

Today, Senators Amy Klobuchar (D-MN), Chris Coons (D-DE), Tim Kaine (D-VA), and Angus King (I-ME) introduced the New Business Preservation Act. The legislation would  create an Innovation and Startups Equity Investment Program in partnership with states and private investors, providing vital capital during the coronavirus pandemic to new startups.

Startups play a critical role in the American economy, powering productivity gains and creating nearly 3 million jobs annually. Unfortunately, due to their nature, many new businesses do not have adequate assets on hand to survive an emergency such as coronavirus, with an average time to turn a profit of nearly three years.

The New Business Preservation Act would provide much needed financial resources to startups during the pandemic. Specifically, the New Business Preservation Act would allocate an initial $2 billion to the program for participating states to invest alongside private venture capital companies in new businesses outside of the Silicon Valley, New York, and Boston venture capital hubs. Importantly, special consideration is given to businesses created by women and persons of color, who face additional barriers in accessing investment capital.

As the U.S. economy continues to suffer due to the coronavirus pandemic, the New Business Preservation Act provides relief to America’s startups. The Progressive Policy Institute urges Congress to swiftly pass this legislation.

Getting Back to Basics on Health Care

Posted on by The Progressive Policy Institute

You can say one thing with certainty about health-care politics and the 2020 election: President Trump and Republicans still want to take away people’s health insurance. If they get their way, millions of Americans would lose coverage under the Affordable Care Act and Medicaid, and many more would be stuck with skimpier health insurance. That’s a stark fact U.S. voters should keep in mind as the coronavirus spreads across the country and threatens to shut down much of our economy. Democrats have fought against this in Congress, at the state level, and in the courts.

The contrast between the two parties couldn’t be clearer: Democrats want to make sure all Americans have health insurance, Republicans don’t.

 

Protecting the Core Systems

Posted on by The Progressive Policy Institute

The Federal Reserve protects the financial system by being ready to lend money to financial institutions that are stressed in a crisis. It’s already in motion, setting up “facilities” to protect money market funds and other investments.

But in this unprecedented emergency, we need a government agency that can provide the same financial lifeline to our core non-financial systems–healthcare, communications, power, food production and distribution, waste removal, key manufacturing.  This agency should be able to quickly provide a  short-term loan to any hospital, power company, phone company, food manufacturer that is about to fail.  Then after the emergency is over, the short-term loan can either be paid back, or turned into a long-term income-contingent loan.

Each of these systems interlock with the others. A failing power system will quickly take down health and food production. A lack of food will undermine the communications system.  Keeping the core systems of the economy going is essential.

Many of the companies involved are large and have plenty of financial reserves. They probably will not need help or even additional supervision. But a surprising number of businesses involved in core systems are medium size or small, including  hospitals, small telecom providers, and all the companies involved in the food supply chain. They are going to run into financial trouble and need to be supported.

Setting up a new agency is not something that I necessarily want to do.   But having a Core Systems Board with the responsibility of backstopping key networks–especially the smaller companies–is essential.

I’m interested in hearing thoughts and comments.

mmandel@www.progressivepolicy.org.

 

 

 

 

 

 

 

 

 

 

 

 

Next Steps For Stimulus

Posted on by The Progressive Policy Institute

As the coronavirus crisis brings the U.S. economy to a standstill, millions of Americans have suddenly seen their cashflows grind to a halt. Congress took concrete steps to support the people most directly harmed by the virus with the Families First Coronavirus Response Act, which was passed by the Senate and signed by President Trump yesterday after passing the House of Representatives five days earlier. Now they must adopt a broader stimulus package that offers immediate assistance to ensure otherwise financially healthy businesses and households avoid unnecessary bankruptcies that would drag down our economy well after the pandemic has been contained.

The Trump administration’s latest proposal is to make up to $500 billion in emergency loans available to small businesses, airlines, and other distressed industries hit by the coronavirus crisis. Additionally, it proposes to send $250 billion in direct cash assistance to American households in April and then another $250 billion in May. The proposal does not detail how these payments would be structured, but does specify that they would vary in size based on family size and income.

This framework is a welcome change from the administration’s earlier proposal to repeal payroll taxes through the end of the year, which would have given the greatest benefits to those least in need of assistance, but it still has a number of problems. A complicated means test will take time to design and administer, delaying much-needed relief to cash-strapped households when time is of the essence. Moreover, amid enormous economic uncertainty, nobody even knows what their income in 2020 will be. Many households that need assistance are almost certain to fall through the cracks under the administration’s plan.

Read the full piece.

The US medical equipment and supply industry: What happened?

Posted on by The Progressive Policy Institute

America now depends on overseas suppliers for more than half of its medical equipment and supplies, up sharply from a few years ago. That’s based on a PPI analysis of government trade and industry data, What happened?

As we go through this terrible pandemic, U.S. healthcare providers are suffering from a surprising shortage of medical equipment and supplies.  Even after President Trump invoked the Defense Production Act on Wednesday, there doesn’t seem to be an easy spigot of domestic factory production to turn on, and overseas factories are serving their own hardhit populations.

Part of the problem is that the U.S. has become increasing dependent on overseas sources for its medical equipment and supplies.  Until 2016, the U.S. economy consistently maintained a trade surplus in medical equipment and supplies. But things changed in the past few years (chart).  Demand rose and domestic production expanded, hiring 18,000 new workers since 2015.

But here’s the rub: Domestic production of medical equipment and supplies did not expand enough to meet demand. As a result, the long-time trade surplus in medical equipment and supplies turned into a rapidly widening trade deficit, hitting $7 billion in 2019.

As a result, an estimated 52% of medical equipment and supplies now come from outside the United States.

 

Where is the new surge of imports coming from? It’s not just China. In fact, imports of medical equipment and supplies from Europe have soared by $4.3 billion since 2015, or 33 percent. Imports from Asia (excepting China) are up $2.7 billion, or 43 percent. And of course, with these regions facing their own crisis, the flow of goods has slowed down.

This was not a case of hollowed-out manufacturing–employment in the U.S. medical equipment and supplies manufacturing industry is at an all time high. Nevertheless we didn’t expand fast enough.

In pandemics, like wars, it’s better to have your own factories.

 

 

 

Note: For trade purposes, we track NAICS 3391. For domestic sales and employment, we track the combination of NAICS 339112 and 339113.

Op-Ed: St. Paddy’s primaries were Bernie’s Waterloo

Posted on by The Progressive Policy Institute

As Americans go into isolation to slow the spread of coronavirus, we are sadly lacking in diversions. No March Madness, spring baseball or Premier League. No bars, restaurants or St. Patrick’s Day revels.

Even the long-running Democratic nomination battle seems to be shutting down. Continuing his electoral hot streak, former Vice President Joe Biden decisively swept all three Democratic primaries yesterday in Florida, Illinois and Arizona.

Sen. Bernie Sanders (I-Vt.), nurturing wan hopes of a political rebound, instead met his Waterloo in the St. Paddy’s Day primaries. He may stay in the race and scrounge delegates here and there, but his high-octane insurgency has run out of road.

Read the full piece.

Op-Ed: Biden would be nowhere without black voters. Will he accommodate black charter school parents?

Posted on by The Progressive Policy Institute
The National Education Association (NEA), the nation’s largest teachers’ union, endorsed Joe Biden for president over the weekend. Earlier the smaller American Federation of Teachers (AFT) hedged its bets by encouraging its members and affiliates to support and help Biden as well as Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.).

The NEA’s endorsement comes on the heels of last week’s “Big Tuesday” primaries in Idaho, Michigan, Missouri, Mississippi, North Dakota and Washington. For Biden, those felt like the grand finale to his Super Tuesday smash hit with African American voters, even outside the South. According to exit polls, 66 percent of black voters in all-important Michigan turned out for Biden. It confirms the intense loyalty to the Democratic Party that was on display the previous week, when more than 50 percent of black Democrats chose Biden in every southern state — and close to 40 percent did so in California and Massachusetts.

Collectively, black voters saved the Democrats from what previously seemed inevitable: Bernie Sanders’s nomination and a potential November blowout, not only against Trump but also down ballot.

It is high time, then, for Democrats to stop disrespecting millions of black voters on an issue important to them: Charter schools.

Read the full piece here.

A Bold Framework For Emergency Economics To Combat The Coronavirus Crisis

Posted on by The Progressive Policy Institute

The outbreak of COVID-19, caused by the novel coronavirus, has created a global market downturn and put the United States on track for its first recession since the 2008 financial crisis. Quarantines, social distancing, and other proactive measures that are necessary to contain the pandemic are already limiting commerce and disrupting global supply chains, essentially ensuring that the U.S. economy will contract for at least some period of time in 2020. Policymakers must adopt a combination of thoughtful public health and macroeconomic policy measures that will limit the damage caused by both this and future recessions.

Although Congress has already taken some strong first steps, much more will be needed. The Federal Reserve’s target interest rate has been reduced to zero percent, meaning it has already used its most potent tool for fighting a serious recession. But fortunately, low interest rates also make it cheaper than ever for Congress to borrow money to provide needed economic stimulus. This stimulus package must be aggressive enough to prevent an economic contagion that spirals into another financial crisis, or worse, a second great depression, but it should also be targeted towards those who are most in need and most likely to spend the money at a time when public health measures have slowed commerce to a crawl.

The best way to accomplish this goal is through the expansion of “automatic stabilizers” ­– policies that cause spending to rise or taxes to fall automatically when the economy contracts. These policies are more responsive to real economic needs because they are unconstrained by the political processes that often slow the passage of discretionary stimulus. Moreover, as the economy recovers, well-designed automatic stabilizers will actually reduce federal budget deficits and help pay back the debt that was used to finance stimulus. This structure prevents stimulus from being prematurely shut off (as it was following the 2008 financial crisis) and removes fiscal concerns as a political impediment to essential borrowing.

Read the full piece here.

PRESS RELEASE: PPI Publishes “Emergency Economics” Framework For Fighting a Recession in 2020 and Beyond

Posted on by The Progressive Policy Institute

WASHINGTON— Experts from the Progressive Policy Institute are calling on lawmakers to enact an aggressive stimulus package focused on strengthening automatic stabilizers and other measures that will not only help manage the coronavirus crisis, but also better prepare the United States for recessions that come after it.

“Congress must swiftly pass a stimulus package that is aggressive and fast-acting enough to prevent an economic contagion that spirals into another financial crisis, or worse, a second great depression,” said Ben Ritz, Director of PPI’s Center for Funding America’s Future. “Any action that experts reasonably conclude would materially help contain the virus or its economic damage should be undertaken swiftly no matter the price.”

“The automatic stabilizers detailed in our report offer the perfect tools for continually injecting stimulus into the economy so long as it is needed without being hamstrung by the political process. Strong automatic stabilizers will help avoid the mistakes Washington made following the 2008 financial crisis, when a misguided focus by Congressional Republicans on immediate rather than long-term deficit reduction undercut the recovery.

When the economy fully recovers and it comes time to get budget deficits back under control, these same policies will then drain any excess stimulus from our economy and use it to pay down our elevated debts, effectively removing fiscal concerns as an impediment to necessary borrowing today.”

Policy Options in PPI’s Emergency Economics Framework

Expand Unemployment Insurance

      • Permanently increase the number of weeks that states may pay out extended benefits during the most severe recessions.
      • Increase the share of lost income replaced by UI benefits during recessions.
      • Expand work-share programs, which compensate workers for reduced wages when their employers choose to cut back hours instead of laying off employees.

Support Vulnerable Americans

      • Automatically relax SNAP and TANF work requirements and increase funding during recessions.
      • Increase funding for programs that serve disadvantaged communities, such as AmeriCorps.
      • Send direct cash aid to all Americans when key indicators show the economy entering a recession.
      • Structure direct cash aid as a refundable tax credit so it can be reclaimed from high income households and/or those that experience no significant income loss.
      • Increase the progressivity of federal income taxes.
      • Enhance the Earned Income Tax Credit.

Provide Liquidity to Cash-Strapped People and Businesses

      • Offer low- or no-interest loans that enable otherwise financially healthy businesses to continue meeting their obligations for the duration of the crisis.
      • Allow borrowers to delay payment on federal student loans and federally insured or guaranteed mortgages for six months without accruing additional interest costs.
      • Encourage forbearance for residential rent and rent owed by small- and medium-sized businesses.
      • Allow businesses and individuals to claim stimulus-related tax incentives on their 2019 tax returns.
      • Delay the 2019 tax filing deadline and the collection of both employer-side payroll taxes and quarterly tax payments until the coronavirus outbreak has been contained.
      • Allow workers who qualified for refundable tax credits such as the EITC in 2019 to receive an advance rebate on their 2020 benefit.

Relieve Pressure on State and Local Governments

      • Automatically increase the federal share of Medicaid and other matching grants when a state enters a recession.
      • Create permanent accountability standards that enable states to better prepare for reporting requirements that created heavy compliance burdens during previous recessions.

Make Long-Term Investments in Recovery

      • Take advantage of low borrowing costs to invest in long-lasting public investments that would already be needed whether or not the economy is in recession.
      • Fund green infrastructure and energy research to help tackle climate change.
      • Automatically increase federal matching rates on infrastructure grants to states, particularly for maintenance and repair projects, when the state’s economy contracts.
      • Establish state-managed lists of “shovel ready” projects and fund them through reforms to the existing BUILD Program.

Cut Taxes on Consumption, Not Payrolls

      • Promote commerce by encouraging state and local government to temporarily cut or eliminate sales taxes, having the federal government replace lost revenue.
      • Allow states that don’t have sales taxes to create refundable tax credits for purchases made during the crisis, also funded by the federal government.
      • Suspend additional consumption taxes applied to industries most affected by the coronavirus, including airline ticket fees, hotel taxes, and taxes on prepared meals.
      • Reduce tariffs, which are consumption taxes on imported goods primarily consumed by low-income people.
      • Reject temporary payroll tax cuts, unless limited to the first $15,000 of a worker’s earnings or the earnings of workers whose production capabilities have been idled by the coronavirus.
      • Permanently replace payroll taxes with a dynamic value-added tax that has a rate which automatically falls during recessions and rises during expansions.

Embrace Fiscally Responsible Borrowing

      • Fund all interventions that experts reasonably conclude would materially help contain the coronavirus or its economic damage, no matter the cost.
      • Strengthen automatic stabilizers that provide needed stimulus in recessions and reduce budget deficits during expansions without being influenced by politics.
      • Implement structural fiscal reforms, such as those proposed in PPI’s Progressive Budget for Equitable Growth, to reduce long-term budget deficits after the economy has fully recovered.
Read the full report here.
Additional commentary about these recommendations on Forbes.com:
A Bold Framework For “Emergency Economics” To Combat The Coronavirus Crisis
How To Maximize The Benefit Of Universal Stimulus Checks
CONTACT: media@ppionline.org
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Emergency Economics: Fighting a Recession in 2020 and Beyond

Posted on by The Progressive Policy Institute

INTRODUCTION:

The outbreak of COVID-19, caused by the novel coronavirus, has created a global market downturn and put the United States on track for its first recession since the 2008 financial crisis. Quarantines, social distancing, and other proactive measures that are necessary to contain the pandemic are already limiting commerce and disrupting global supply chains, essentially ensuring that the U.S. economy will contract for at least some period of time in 2020.1 Policymakers must adopt a combination of thoughtful public health and macroeconomic policy measures that will limit the damage caused by both this and future recessions.

Congress has already taken two strong first steps. On March 6th, President Trump signed legislation that provided $8.3 billion in emergency funding for public health agencies and coronavirus vaccine research.2 Now the U.S. Senate is debating the Families First Coronavirus Response Act: a far more expansive bill carefully crafted by House Democrats to further bolster public health agencies and provide economic support to the people and businesses most likely to be harmed by the disease.3 This bill temporarily increases federal Medicaid and food-security spending, makes coronavirus testing available to patients free of charge, expands unemployment insurance benefits, mandates employees afflicted with the virus be given 14 days of paid sick leave, and creates a refundable tax credit to provide them with up to 12 weeks of additional paid medical leave, among many other things.4

Although these measures were a great start, much more will be needed. For example, the sick-leave mandate – which is essential for discouraging potentially infected employees from spreading the disease to their coworkers – covered just one fifth of workers after concessions were made to win Republican support.5 Many otherwise financially healthy businesses face the threat of going bankrupt as the crisis chokes off their cash flows, further increasing unemployment and perpetuating a vicious cycle of weakening demand.6 Millions of Americans may be unable to make their rent or mortgage payments, causing both homelessness and instability in the financial sector.

The Federal Reserve’s target interest rate has been reduced to zero percent, meaning it has already used its most potent tool for fighting a serious recession.7 But fortunately, low interest rates also make it cheaper than ever for Congress to borrow money to provide needed economic stimulus. Importantly, the current crisis is somewhat different than previous recessions in that most consumer spending will be constrained by limits on opportunities for commerce rather than a lack of money in their bank accounts. It is therefore more important than ever that stimulus money be targeted towards those who are most in need and most likely to spend. At the same time, a stimulus package must be aggressive enough to prevent an economic contagion that spirals into another financial crisis, or worse, a second great depression.

The best way to accomplish this goal is through the expansion of “automatic stabilizers” – policies that cause spending to rise or taxes to fall automatically when the economy contracts. These policies are more responsive to real economic needs because they are unconstrained by the political processes that often slow the passage of discretionary stimulus. Moreover, as the economy recovers, well-designed automatic stabilizers will actually reduce federal budget deficits and help pay back the debt that was used to finance stimulus.8 This proven structure prevents stimulus from being prematurely shut off (as it was following the 2008 financial crisis) and removes fiscal concerns as a political impediment to essential borrowing.9

This report provides a framework for new automatic stabilizers and other measures that will both combat the coronavirus recession and better prepare the United States for others that come after it. The Progressive Policy Institute recommends that policymakers prioritize giving relief to people who either lose their job or are already low-income, since both groups have a higher propensity to spend any money they receive than those who are economically secure. People and businesses should be given increased financial flexibility to inject liquidity into the market and prevent unnecessary bankruptcies during the crisis. The federal government should provide relief to cash-strapped state governments so that they are not forced to cut back their own spending and counteract federal stimulus. Finally, policymakers at all levels of government should cut taxes that discourage consumption, particularly those applied to industries hardest hit by the crisis.

READ THE FULL REPORT:

 

How To Maximize The Benefit Of Universal Stimulus Checks

Posted on by The Progressive Policy Institute

Thought leaders across the political spectrum are embracing a novel idea to manage the recession caused by the novel coronavirus: just send everyone cash.

Yesterday, Utah Sen. Mitt Romney proposed sending every American adult a check for $1000. Jason Furman, former Chair of the Council of Economic Advisors under President Obama, has proposed sending every American adult $1000 and every child $500, a proposal which former CEA Chair Greg Mankiw also endorsed. On the furthest end of the spectrum, former presidential candidate Andrew Yang has called for sending every American a check for $1000 each month until the coronavirus crisis ends.

Why are these proposals so popular among experts and politicians alike? In short, it’s because of their administrative simplicity. The bureaucracy required to create a new federal program can’t be built overnight, and the U.S. economy is already in the midst of a major crisis. The federal government needs to start pumping massive amounts of stimulus into the economy ASAP. Millions of Americans who are soon to be laid off or furloughed need cash, at least temporarily, to continue making their rent or mortgage payments – many cannot afford to waste time jumping through the usual hoops required to access many federal benefits, and the system may not even be prepared to process all qualified applicants in a timely manner during an economic crisis. A universal cash benefit ensures that nobody who needs financial support slips through the cracks.

Read the full piece here.

Vaccines, Risk, Disruptive Innovation, and Progress

Posted on by The Progressive Policy Institute

Is the coronavirus about to force us into the Biotech Century? Here’s a follow-up to my previous post.

In response to the coronavirus pandemic, government and private researchers are taking the perhaps unprecedented step of testing the safety of a new coronavirus vaccine in volunteers before testing its safety and efficacy in animals. As one researcher told STAT, a medical news publication:

“This is very unusual,” explained Akiko Iwasaki, a Yale University microbiologist who studies the immune response to viruses. “It reflects the urgency to develop vaccines to counter the Covid-19 pandemic.”

This experiment in accelerated science could fail in two ways. First, the vaccine could turn out to be unsafe or ineffective in the volunteers. That’s not at all unlikely. This particular vaccine is being developed by a new methodology from Moderna. Unfortunately, as the New York Times wrote, “no vaccine made with this technology has yet reached the market.”

The second way that the new vaccine could fail is that it could look safe and effective in clinical trials, be put into widespread use, and then show unforeseen side effects. That could be medically and scientifically devastating, and it can’t be ruled out either.  As STAT notes, medical ethicists are conflicted about the wisdom of accelerated science.

The upside, though, is potentially enormous. A vaccine against COVID-19, even one that is only partially effective, could spare millions of people from dying worldwide, while allowing the global economy to be reactivated.

This vaccine trial is not alone. Accelerated science is going on at all these tests of new coronavirus treatments and vaccines going on all around the globe. Academic researchers, companies and government regulators are willing to throw normal procedure aside because the stakes are so high.

As these tests proceed, we will also learn something important about progress and innovation.  As noted here, we’ve spent close to $2 trillion on biosciences research and development over the past 25 years,  and we haven’t gotten the payoff in better health or economic growth that we expected.

One possibility is that well-intentioned government regulation systematically impeded disruptive innovation in the biosciences, as I argued my 2014 essay “Hacking the Regulatory State” and my 2011 policy brief  on medical innovation. It wasn’t malicious, but as I wrote:

A disruptive innovation, as identified by Clayton Christensen, starts out as less capable than existing technologies, but as the innovation evolves, it gets both cheaper and more powerful.

The first automobiles, for example, were both more expensive and less reliable than a horse. Similarly, the first personal computers were basically toys compared to the existing minicomputers and mainframes. But they got better and cheaper over time.

From that perspective, it’s clear that a government regulatory body with “too-high standards” can have the effect of choking off innovation. Imagine how the history of computing would have been different if Steve Jobs and Steve Wozniak had to prove that the Apple I could meet government performance standards before it could be sold.

FDA standards require both safety and efficacy, meaning that the drug or medical device have to perform better or at a minimum just as well as existing alternatives.

It’s important to note that the first personal computers would not have met FDA-type efficacy standards, and neither would have the first cell phones.  When cell phones were first introduced in the 1980s, they were bulky, heavy devices which retailed for $4000, provided terrible reception and could barely fit in a briefcase, much less a pocket.  By any measure, they were inferior in phone quality to existing wireline services. Today, most people have given up their wirelines in favor of mobile devices.

Under ordinary circumstances, it makes sense to apply tighter standards to medical innovation than to IT innovation. Under ordinary circumstances, people want assurances that a new drug or medical device is safe, and will work at least as well as the alternative.

These are not ordinary circumstances. The tragedy of the coronavirus pandemic is forcing us to try things and make decisions that we would never do in the normal course of affairs.  We are in uncharted territory, and there are no guarantees. We could learn that the regulators were right, and disruptive innovation is the wrong model for medical science. Or we could learn that medical science has advanced far enough to produce vaccines and treatments for new diseases in far less time than normal.  And that would be the dawn of the Biotech Century.

 

 

The Biotech Century Faces a Biological Menace: What We Need to Do Now

Posted on by The Progressive Policy Institute

Can we expect the biopharma folks to quickly find a good treatment for COVID-19? Is it time to bust up regulatory barriers holding back innovation?

In March 1997, BusinessWeek magazine, now part of Bloomberg,  ran a cover story entitled “The Biotech Century.” The cover language, in part, said “Thanks to fundamental advances in genetics, biology will define scientific progress in the 21st century.”

Bloomberg BusinessWeek, March 1997 cover story

In the subsequent 23 years, biological scientists have achieved notable scientific triumphs, including the sequencing of the human genome. HIV was tamed, HepB has been cured, and gene therapies are slowly coming onto the market. Since that cover, the private and public sectors have spent probably close to $2 trillion on health-related research and development,  a truly astonishing sum.

Nevertheless, the acknowledged innovation leaders in the 21st Century have been info-tech companies like Google, Apple, and Amazon. Pharma companies like Pfizer, Gilead, and Roche have done well, both in terms of beneficial new drugs and business success. But they haven’t captured the popular imagination like the tech firms.

Unfortunately, that’s fair.  Tech applications have gotten cheaper and faster across the board. Meanwhile, bio science has moved really fast, but market applications of the new science have been much slower. Moreover, the promises of faster, cheaper, more targeted drug development seem to have fallen short. Instead, drug development has been getting more expensive and riskier.

There’s no agreement, though, on why the scientific advances have not translated into lower costs and faster drug development. There are three leading hypotheses, not mutually exclusive. First, the intricacies of medicine could be a lot harder and more complicated than scientists thought.  Second, regulatory barriers in bio could be slowing down innovation. Third, the profit motive could be diverting biopharma firms from truly important R&D.

Now the moment of truth for bio has arrived, along with a global pandemic that rages out of control. Tech companies can be helpful in maintaining the infotech infrastructure that allows the essential social distancing. But the real innovative responses have to be carried out by the university labs, the biopharma companies, and hospital researchers.

Some of that has started. Roche and Thermo Fisher have developed new faster tests for coronavirus, which received emergency clearance from the FDA. Companies such as Gilead and Regeneron are developing and testing new treatments at a breakneck pace. And vaccines are going through their initial round of tests.

But it’s not enough.  What we can do to help: Make it clear that innovation and new ideas are encouraged, even risky ones. Legitimate researchers with new tests and new solutions should be encouraged.  And unnecessary regulatory barriers that slow down drug and vaccine development should be temporarily thrust aside.  This is not a time for business as usual.

 

 

 

C-SPAN: Tony Blair on Progressive Politics and Transatlantic Relations at PPI

Posted on by The Progressive Policy Institute

“Former British Prime Minister Tony Blair sat down for a discussion at the George Washington University in Washington, DC, with the president and founder of the Progressive Policy Institute, Will Marshall. They discussed several topics, including the rise of populism in the U.K. and the U.S., Brexit, the impact of the coronavirus, the future of progressive politics, and how the technological revolution will change the world.”

Watch the full program here.

A Rare Note of Good News–Or, Why the US Isn’t Italy

Posted on by The Progressive Policy Institute

In recent years I have repeatedly demonstrated that the cost of labor is the main driving force behind rising health care costs in the U.S. ( for example, here). The US health care workforce has grown far faster than the population, even adjusting for aging.  Meanwhile cost control efforts have focused on areas like pharmaceuticals and the number of hospital beds, so that the number of hospital beds per person have been steadily declining even as the population has aged.

These two divergent trends define the nature of our current situation. Take a look at the two charts below.

When it comes to nurses per 1000 population, the U.S. compared well with most of its OECD peers. The healthcare system is doing okay in terms of human capacity–that’s what we have been spending money on. Other OECD figures show the same trends.

But when it comes to hospital beds, we are at the low end, having been squeezing out beds as a cost savings move.

These charts also explain why Italy is being hit so hard, and why Germany is relatively unworried.  Italy is weak on both nurses and beds compared to its European neighbors.  Meanwhile, Germany is strong on both nurses and beds.

More to come.