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PPI Kicks Off 2020 Economic Debate With Iowa Fiscal Forum

Posted on by The Progressive Policy Institute

Contact: Cody Tucker, ctucker@ppionline.org
or 202-775-0106

PPI Kicks Off 2020 Economic Debate With Iowa Fiscal Forum

Former Gov. Tom Vilsack, Former Lt. Gov. Patty Judge, & Iowa Rep. Chris Hall Headlined

DES MOINES – A public forum sponsored by the Progressive Policy Institute (PPI) today kicked off the 2020 presidential debate over fiscal issues in the nation’s first caucus state. The event featured Former U.S. Secretary of Agriculture and Iowa Governor Tom Vilsack; Former Iowa Lieutenant Governor Patty Judge; Iowa Rep. Chris Hall, Ranking Member on the House Appropriations Committee; and Director of PPI’s Center for Funding America’s Future, Ben Ritz. PPI President Will Marshall moderated the panel discussion.

There, PPI released a new report authored by Ritz about the role that public investment plays in providing the foundation for a prosperous economy, as well as the steps that must be taken to end America’s current public investment drought.

“Federal spending on public investments in education, infrastructure, and scientific research is now near record-low levels as a percent of GDP,” said Ritz. “Meanwhile, the cost of interest on our growing national debt is skyrocketing thanks to fiscally irresponsible tax cuts and the unchecked growth of federal health and retirement programs. By 2026, annual interest costs will be more than the twice the size of all public investment spending combined if current policies remain in place.”

This year, for the first time in modern history, China – not the United States – will be the global leader in R&D spending, jeopardizing America’s position as the global leader in innovation. Failure to reverse America’s disinvestment in infrastructure could reduce GDP by nearly $4 trillion over the next decade, costing the average family about $3,400 per year. And growing problems with our nation’s education system are denying American workers the skills they need to compete for next-generation jobs.

A major cause of this public investment drought is irresponsible policymaking in Washington, according to the report. President Trump and the Republican-controlled Congress abandoned any pretense of fiscal responsibility and starved public investments of much-needed revenue by adding more than $2 trillion of reckless tax cut to the national debt over the past year. Further, the aging of the population and rising health care costs is causing projected spending on federal health and retirement programs to grow from about 10 percent of GDP today to nearly 16 percent of GDP in 2048. The refusal of both parties to modernize these programs has left fewer resources available for federal public investment.

State and local governments are also suffering from similar problems that constrain their own abilities to fund public investments. Republican governors and legislators in states such as Kansas and Oklahoma enacted unaffordable tax cuts that resulted in dramatic cuts to public investment. State and local budgets are also strained by demographic changes: as a share of GDP, state spending on Medicaid has increased nearly 40 percent since 2000 due to rising health costs, while the costs of unfunded pension liabilities have doubled during the same period as the bill for retiring baby boomers comes due. The result: a perfect storm of fiscal mismanagement has drained public investment spending at all levels of government.

Fortunately, there are signs that the American people appreciate the stakes and need for change: the report notes that large majorities of voters in both parties have expressed strong support for government spending on public investments in several independent polls. Additionally, a poll conducted by PPI on the eve of the 2018 midterm elections found that more respondents (85 percent) were very or somewhat worried about the growing federal budget deficit than any other issue polled – including almost 9 out of 10 independent voters.

These findings suggest that Democrats serving in the 116th Congress, and running for President in 2020, have a unique opportunity to draw a stark contrast between themselves and fiscally irresponsible Republicans by offering the electorate an agenda that pairs robust public investment in progressive priorities with the fiscal discipline necessary to secure those investments for generations to come.

Ending America’s Public Investment Drought

Posted on by The Progressive Policy Institute

INTRODUCTION

Economists from Adam Smith onward have understood that free markets don’t exist or thrive in a state of nature. They are nestled within a framework of governance that defends societies against outside threats, writes and enforces common laws, and provides public goods – those that all people need but that private actors would have little incentive or ability to develop on their own.

 

Unlike private investments, investments in public goods generate benefits that accrue not to individual investors but rather society as a whole. Thus, the responsibility for investing in public goods falls on government: the one institution that represents all citizens and therefore has an obligation to act in the common interest. Public investments such as education, infrastructure, and scientific research lay the foundation for long-term economic growth and shared prosperity. Only by making these investments can governments facilitate the success of private enterprise and free markets.

For over three decades following the end of World War II, policymakers in the United States dutifully fulfilled this obligation and invested in America’s future. The post-WWII G.I. Bill provided unprecedented access to higher education for returning veterans and their families regardless of their financial situation, giving them an opportunity to pursue a lucrative and fulfilling career while providing businesses access to a skilled workforce.3 The Interstate Highway System connected people from across the country to exchange goods and services – and still supports one quarter of all vehicle traffic over 60 years later.4,5 And the “Space Race” of the 1960s resulted in the development of new technologies from LEDs to water purifiers that continue to benefit our society today.

But in recent years, policymakers have defaulted on their fundamental responsibility to maintain sufficient public investment. Between 1965 and 1980, federal spending on education, infrastructure, and scientific research averaged about 2.5 percent of gross domestic product (the total value of all goods and services produced by the United States in a given year). Investment spending at that level would have been equal to roughly $470 billion in 2017. Yet in reality, the federal government spent just $300 billion on public investment in 2017 – less than 1.5 percent of GDP.7 If current trends continue, such investment is projected to reach its lowest level in modern history by 2026 (Fig. 1).8

If the current generation of policymakers fails to “pay it forward” by maintaining and building upon the investments made by their predecessors, young Americans and future generations will not have the kind of opportunities for economic and social advancement that their parents and grandparents enjoyed. Instead, they would face a future of diminished economic dynamism and growth, lower productivity and wages, and greater social inequality and class conflict. Simply put, the de-facto policy of disinvestment is a formula for national decline.

Rather than address this looming threat, current policymakers have been making America’s public investment drought worse. Donald Trump and the Republican-controlled Congress abandoned any pretense of fiscal responsibility and enacted a package of partisan tax cuts in 2017 that the official scorekeepers at the non-partisan Congressional Budget Office estimate will cost more than $2 trillion over the next decade.16 These policies provided tax relief to those who needed it least while draining much-needed revenue from public investments that could benefit everyone.

But the federal government’s fiscal challenges extend beyond insufficient revenue. America’s aging population and rising health care costs are causing spending on expensive federal health and retirement programs such as Medicare, Medicaid, and Social Security to grow significantly faster than the rest of our economy – a trend that members of both parties, but particularly Democrats, have largely refused to tackle. The result is that many people who consider themselves progressives have become complicit in a profoundly unprogressive policy of throttling public investment. These forces together are producing ballooning public debts while leaving less and less room in the federal budget for investments in a better future.

Meanwhile, state and local governments are also cutting back their public investment spending due to similar demographic and political challenges. The bills for unfunded pension liabilities are coming due as a massive number of public employees move into retirement. The cost of state commitments to health programs such as Medicaid are also swelling due to the same rising health care costs that pressure Medicare at the federal level. And while policymakers in some states are working to tackle these problems, others have made matters worse by enacting their own reckless tax cuts based on the same flawed ideology as Republicans in Washington. The result is cuts to public investment at all levels of government.

Fortunately, there are signs that the American people appreciate the stakes: large majorities of voters in both parties have expressed strong support for government spending on public investments in several independent polls.17,18,19 Additionally, a poll conducted by PPI on the eve of the 2018 midterm elections found that more respondents were worried about the growing federal budget deficit than any other issue polled – including almost 9 out of 10 independent voters.20

These findings suggest that Democrats serving in the 116th Congress (or running for higher office in 2020) have a unique opportunity to draw a stark contrast between themselves and fiscally irresponsible Republicans by offering the electorate an agenda that pairs robust public investment in progressive priorities with the fiscal discipline necessary to secure those investments for generations to come.

KEY TAKEAWAYS

The goal of this report is to highlight for American policymakers and their constituents the role that public investment plays in providing the foundation for a prosperous economy, as well as the steps that must be taken to end America’s current public investment drought.

The first three sections provide an overview and analysis of the three main categories of public investment in the United States: research and development (intellectual capital), infrastructure (physical capital), and education (human capital). Next, the report demonstrates how these public investments both create long-term economic growth and ensure its benefits are shared by all. Finally, the report explores the external forces that have resulted in recent cuts to public investment, with one section on the pressures facing the federal budget and another on the parallel challenges facing state and local governments.

In 2019, PPI’s Center for Funding America’s Future will offer concrete proposals for a fiscally responsible public investment agenda that fosters robust and inclusive economic growth.

We’re Falling Behind in Research and Development (PP. 8-13): 

• Federal R&D spending has contributed to countless technological innovations that enrich our society. To take just one example, a study of NIH’s Human Genome Project estimated that the project generated nearly $1 trillion of economic growth – yielding a massive return of $178 for every dollar spent.

• Back in the 1960s, the federal government spent as much as 1 percent of GDP on nondefense R&D as it sought to win the space race and put a man on the moon. But today, this spending has fallen by more than half. That disinvestment threatens basic scientific research that lays the foundation for new industries and technological innovations.

• This year, for the first time in modern history, China – not the United States – will be the global leader in R&D spending. If policymakers don’t boost public investment in R&D, they risk forfeiting America’s position as the global leader in innovation.

Our Infrastructure is Obsolete and Falling Apart (PP. 13-16): • Common public goods such as roads, school buildings, electric grids, and water systems provide the physical foundation for private investment and enterprise. But in recent years, that foundation has been allowed to crumble as total government spending on infrastructure has fallen to record-low levels as a percent of GDP.

• Several independent estimates suggest the United States will need to spend roughly $1.4 trillion more on infrastructure than it is currently projected to spend over the next decade. Failure to reverse America’s disinvestment in infrastructure could reduce GDP by nearly $4 trillion over that time period, costing the average family about $3,400 per year.

• Investments in infrastructure also boost economic growth in the short term by creating well-paying jobs today. Roughly 1 in 10 workers are employed in either developing or maintaining infrastructure, and wages at the bottom of the earnings distribution are approximately 30 percent higher than what other jobs requiring a comparable level of education would offer.

Workers Need Skills for Next-Generation Jobs (PP. 16-21): 

• Education is a valuable investment for both individuals and governments. Investing in a child’s pre-kindergarten education generates 7 to 10 percent annual returns for the child and society at-large, while the average annual return on investment for postsecondary education is double or triple what it would be if a similar amount of money was invested in the stock market. Disinvesting from education not only hurts students but also hurts the public by foregoing increased worker productivity and higher tax revenue for the government.

• Per-pupil funding for K-12 education has stagnated or fallen in most states since the 2008 financial crisis. This disinvestment will likely be costly: every dollar spent educating a child results in an average of $3 in economic activity down the road. It can also reduce the number of students who graduate, potentially imposing long-term costs on them and taxpayers. High-school dropouts are about twice as likely to be unemployed as graduates, and those who are employed earn an average of $8,000 less per year than graduates do.

• “New-collar” jobs that require some postsecondary education but not a four-year degree now account for 53 percent of jobs in the United States. A worker who obtains the necessary credentials can see their incomes rise by as much as $11,000 within the first two years alone. But only 43 percent of U.S. workers have the appropriate credentials for these positions, resulting is a “skills gap” that is in part due to underinvestment by the government.

Public Investment Fosters Robust and Inclusive Economic Growth (PP. 21-26):

• Sustained public investment can unleash robust economic growth. The OECD estimates that increasing public investment by 1 percent would increase potential GDP by an average of 5 percent in the long run.

• Public investment also ensures the benefits of economic growth are widely shared. Technological innovations such as the internet improve the lives of people of all income levels. Better transportation infrastructure is correlated with higher social mobility. And investments in public education level the playing field for lower-income students who have access to fewer resources than their wealthier peers.

• But the ability of a state or local community to make public investments is heavily dependent on its existing wealth and fiscal capacities. Poorer communities require federal investments to attract private capital and talented workers. Such investments are vital for promoting economic mobility and keeping the American Dream alive for all.

Poor Federal Budget Choices Are Draining Public Investment (PP. 26-28): 

• Washington Republicans abandoned any pretense of fiscal responsibility by adding $2 trillion of reckless tax cut to the national debt over the past year. These cuts both starved public investments of much-needed revenue and likely contributed to the GOP losing control of the U.S. House of Representatives in the 2018 midterm elections.

• Public investment is also being squeezed by the inexorable growth of Medicare, Medicaid, and Social Security. Due to the aging of the population and rising health care costs, ENDING AMERICA’S PUBLIC INVESTMENT DROUGHT P7 spending on these programs are projected to grow from about 10 percent of GDP today to nearly 16 percent of GDP in 2048. The refusal of both parties to modernize these programs has left fewer resources available for federal public investment.

• As a result of these decisions, public investment spending by the federal government in GDP-adjusted dollars has plummeted by nearly 40 percent since 1968 – and is projected to hit record-low levels by 2026 if current policies remain in place. Meanwhile, the share of federal spending committed to public investment will fall from 7.9 percent today to 4.4 percent in 2048.

State and Local Governments Face Challenges Similar to Those Facing Washington (PP. 28-33):

• State and local governments are also major contributors to public investment, but they are suffering from problems similar to those that afflict Washington.

• Republican governors and legislators in states such as Kansas and Oklahoma enacted unaffordable tax cuts that resulted in dramatic cuts to public investment. These tax cuts proved to be both bad policy and bad politics: Democrats won huge victories in both states in the 2018 midterm elections (despite their strong Republican lean) by campaigning for fairer and more responsible tax policies.

• State and local budgets are also strained by demographic changes. As a share of GDP, state spending on Medicaid has increased nearly 40 percent since 2000 due to rising health costs, while the costs of unfunded pension liabilities have doubled during the same period as the bill for retiring baby boomers comes due. The result: a perfect storm of fiscal mismanagement has drained public investment spending at all levels of government.

 

 

Mandel for NJ Spotlight, “It Would Be A Mistake to Make Brick-and-Mortar Retailers in NJ Accept Cash”

Posted on by The Progressive Policy Institute

It would be better to go cashless, while creating new low-cost banking options for poor residents

Is cash a bane or a boon?

The underlying trends are clear. Across the country, from high-end salad chain Sweetgreen to the new Amazon Go stores, more and more retailers are going cashless as technology improves. For a company like Amazon, doing without cash means speeding or eliminating the checkout process, including getting rid of long lines at peak times. For small retailers, the advantages are fewer losses from cash theft and much simplified operations, especially in high-crime areas.

In response, New Jersey is considering new legislation that would require all brick-and-mortar stores to accept cash. Similar bills have been introduced in Chicago, Washington, D.C. and Philadelphia. Supporters say that such legislation is important to protect poor Americans who don’t have access to credit cards or bank accounts.

This move to lock in the status quo is a mistake. The shift to cashless stores is a positive for poor Americans and small retailers, if combined with a concerted effort to bring low-cost banking to poor Americans. Moreover, regulations requiring cash are likely to reduce the competitiveness of brick-and-mortar stores against e-commerce.

Continue reading at NJ Spotlight.

Kane for NY Daily News, “When Republicans decide to love an activist judge: The Affordable Care Act ruling exposes GOP hypocrisy”

Posted on by The Progressive Policy Institute

Republicans love to complain about “activist judges,” that is, until they find one willing to do their political bidding.

On Friday, members of the GOP hailed a ruling by U.S. District Judge Reed O’Connor striking down the Affordable Care Act (ACA) as unconstitutional. They didn’t seem to care that O’Connor had to use some highly questionable reasoning to arrive at that conclusion, which the Supreme Court rejected in 2012.

For his part, President Trump was delighted that a federal judge was able to do what he and the GOP-controlled Congress failed to do in 2017: kill Obamacare. “As I predicted all along, Obamacare has been struck down as an UNCONSTITUTIONAL disaster! Now Congress must pass a STRONG law that provides GREAT healthcare and protects pre-existing conditions,” he tweeted.

Others in the GOP also celebrated the decision over the weekend. In a tweet, Missouri Sen.-elect Josh Hawley, who signed onto the lawsuit as attorney general and spent his campaign telling voters he would protect preexisting conditions, called upon both parties to work together to protect those with preexisting conditions. Hawley did so despite knowing his lawsuit seeks to fully overturn those protections.

Continue reading at the New York Daily News.

Bledsoe for The Hill, “Takeaway from Poland: Climate success requires action by global leaders – including US president”

Posted on by The Progressive Policy Institute

The biggest takeaway from two weeks of climate negotiations in Poland is simple, if breathtaking: climate change is such a massive and existential issue that it can only be effectively dealt with by major nation heads of state, not just a collection of 195 environment ministers.

Yes, the basic rules for accounting, monitoring and verification of emissions were agreed to in Poland. These are important, so that all nations can judge whether other countries are on track to make emissions cuts as they have pledged. Ministers deserve real credit for delivering on this. But getting “the Paris rules” right, while necessary, does not begin the harder work of actually cutting emissions, and so is hardly sufficient progress to address the climate crisis, for two key reasons.

First, the largest emitting nations are not even close to on track to meet their Paris pledges. In fact, rather than falling, global CO2 emissions grew by 1.6 percent in 2017 and are projected to increase by 2.7 percent this year. The world’s largest emitter, China, saw its CO2 emissions grow by about 5 percent in 2018. And after steadily falling in previous years under President Obama, U.S. emissions are set to rise by 2.5 percent this year under President Trump. E.U. CO2 output did fall by about 1 percent this year, but rose in 2017 by an equal amount, and Indian emissions rose by more than 6 percent, as did emissions of many other countries.

Second, even if all the Paris emissions pledges were achieved, they would still push global average temperatures up at least 3.5 Celsius, far above even remotely safe levels. In fact, new science is showing us that temperatures that high will be catastrophic, leading to massive sea level rise, agricultural disruptions, more droughts, floods, fires, infectious disease and other extreme impacts.

Continue reading at The Hill.

Osborne and Langhorne for The Washington Post, “Who is Lewis Ferebee, D.C.’s New Chancellor?”

Posted on by The Progressive Policy Institute

After 11 years of centralization, Lewis D. Ferebee, the choice of D.C. Mayor Muriel E. Bowser (D) to be the next D.C. schools chancellor (subject to confirmation by the D.C. Council), will bring a fresh perspective to D.C. Public Schools. As superintendent of Indianapolis Public Schools, his signature strategy was empowering principals and teachers.

Tall and bespectacled, Ferebee is an affable, soft-spoken leader with an easy smile and a low-key manner. A former public school teacher and assistant principal in his native North Carolina, he says his leadership journey began when, at 25, a superintendent asked him to become principal of his worst elementary school. “He gave me the keys and said, ‘Lewis, you have carte blanche authority. If anybody comes to you about a decision you made, have them come to me.’ ”

That autonomy was the key to his success, Ferebee says. “At the end of the day, if principals feel handcuffed, if teachers feel handcuffed, you’re stifling their creativity. Your best teachers are your most innovative and creative teachers, and they know their learners. So when you don’t give them the full opportunity to make informed decisions about what they know, you’re limiting the opportunity for them to be successful.”

Continue reading at The Washington Post.

Marshall for USA Today, “Pig-headed Republicans are pushing America toward government-run national health care”

Posted on by The Progressive Policy Institute

New Texas ruling is the latest example of Republican efforts to kill Obamacare. But while the GOP is winning on tactics, it’s losing hearts and minds.

What is the strongest political force driving America toward national health care? No, it’s not Sen. Bernie Sanders and his “Democratic Socialist” minions. It’s the Republican Party.

Hang on, don’t Republicans stand foursquare against a government takeover of the entire U.S. health care system? So they say. But the GOP’s pig-headed opposition to less drastic ways to make sure everyone has coverage is stimulating Americans’ appetite for a bigger government role in health care — and it will only be fueled by a federal judge’s ruling Friday night that the Affordable Care Act is unconstitutional.

In a recent poll commissioned by the Progressive Policy Institute, for example, voters by a margin of 54 to 46 percent, including nearly half of Republicans, favored changing “the current health system so everyone gets health care through Medicare instead of through people’s place of work or instead of buying it directly.” A more general “new government health care program” drew even more support, including 52 percent of Republicans.

Such findings should be taken seriously, but not literally. When you present voters with facts about the astronomical cost of nationalizing health care — $32 trillion over 10 years — and tell them they’d have to give up their job-based health plans, their enthusiasm for a Medicare-for-all “single payer” scheme starts to melt away.

Still, the public’s receptivity to more government intervention in health care markets shows that U.S. conservatives are losing ground on health care. And Republicans, the drivers behind the lawsuit in Texas, have only themselves to blame.

Read more at USA Today.

Can digitizing the food manufacturing industry boost living standards?

Posted on by The Progressive Policy Institute

A version of this post originally appeared on Forbes.com

Can digitizing the food manufacturing industry help boost living standards? The short answer is yes, if we link food manufacturing into the Internet of Goods.

We’re used to thinking of food as cheap and getting cheaper. In 1947, spending on food—both in and out of the home—accounted for 27% of non-health personal spending. By 2000, the food budget share, omitting healthcare, had dropped to 14%.

This 50-year decline in the food budget share fueled American prosperity. With much less of their budgets going to food, middle-class households could afford to spend more on housing, cars, vacations, and all the other aspects of a good life.

But as Figure 1 shows, around 2000, something changed. The decline in the food budget share stopped. Indeed, household spending on food has inched up to close to 15% of non-health personal spending by 2017.

To put it another way, if the past trends had continued,  the food share of non-health spending would be only 10%.  Americans would have almost $500 billion more to spend in other areas.

What happened to the food industry? Groups such as the American Antitrust Institute point to consolidation in industries such as meat processing, which potentially has increased the market power of major players and their ability to raise prices.

Another factor boosting food costs may be greater attention to safety.  In particular the Food Safety Modernization Act (FSMA) was signed into law by President Barack Obama on January 4, 2011. This legislation gives the FDA a new mandate to regulate food production and processing. Indeed, the necessary rules are still being implemented–for example, the FDA is currently asking for comments on a proposed guidance for “Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption.” Obviously  an important step given the current lettuce issue!

But perhaps most important, the food manufacturing industry has been in a deep and profound productivity slump in recent years. Measured by the Bureau of Labor Statistics (BLS), output per hour in food manufacturing has dropped by 8% since its peak in 2005 (Figure 2).

In response, the food manufacturing industry has been embracing digitization, but it’s a slow process. According to data from the BLS, the entire food manufacturing industry employed less than 1000 software developers and programmers as of May 2017, compared to 25,000 engineers and scientists.

Digitization will have a significant impact in several different areas of food manufacturing. First, it will become much easier to consistently track food from “farm to fork.”  As a result, food recalls will become easier and cheaper. (According to one count, there were 456 food recalls in 2017).

Second, digitization of the production process will help boost productivity and lower costs. This includes product development. For example, FlavorWiki is a startup that uses data analytics to quantify consumer taste perceptions, and potentially help companies develop new products.

Finally, and perhaps the most important, digitization allows the development of local production models for food, requiring food to be shipped much shorter distances. In Japan, for example, the world’s largest automated leaf-vegetable factory has just opened in a suburb of Kyoto. In the U.S., companies such as Iron Ox are developed autonomous and hydroponic production models.

Such vertical farms might be tied directly into ecommerce networks to handle local delivery direct to consumers, thus cutting out several layers of the distribution chain. The result would be lower prices, higher quality, and less pollution from shipping, These are some of the benefits of the Internet of Goods.

Indeed, digitization will enable the rethinking of the entire food production, manufacturing, and distribution chain, to the benefits of consumers. With any luck, Americans will once again find their food budget shares falling and their standard of living rising.

Marshall & Kim for LA Times, “Rather than focus on an anti-Trump resistance, Democrats need to show voters they can accomplish something.”

Posted on by The Progressive Policy Institute

Emboldened by their new majority in the House of Representatives, Democrats are understandably eager to exercise their power.

Some House members believe the way to do that is with an aggressive, sharply partisan agenda aimed at both calling out President Trump for his egregious behavior and demanding immediate action on longshot legislation such as single-payer healthcare.

A new survey commissioned by the Progressive Policy Institute (PPI) and conducted by Expedition Strategies suggests that’s a terrible idea. To win in 2020, Democrats should resist the urge to turn the House into the new headquarters of the anti-Trump resistance or to initiate battles over legislative priorities favored by party liberals that have no hope of passage.

The good news for Democrats is that they enjoy a natural advantage heading into 2020. PPI’s study found that 48% of voters identify as Democrats or as independents who lean Democratic, while 39% said they are Republicans or lean Republican. The remaining 13% are true independents with no allegiance to either party.

Continue reading at the Los Angeles Times.

PPI Survey: Voters Back National Privacy Law

Posted on by The Progressive Policy Institute

Chinese hackers stealing technology from U.S. companies, Russian trolls interfering in our elections, U.S. tech leaders hauled before Congress to explain some new data breach or misuse of personal information – hardly a week goes by without Americans being bombarded with new revelations about assaults on our privacy.

The problem will only get worse as America’s physical industries – autos, construction and manufacturing of all kinds – go online. That will trigger explosive growth in the volume of personal information companies collect – and try to sell.

And while the United States leads the world when it comes to digital technology and data-driven commerce, we lag in updating our cybersecurity and privacy laws. Unlike Europe, which is implementing its General Data Protection Regulation (GDPR), Washington has no national standard for privacy.

States are moving to fill this policy vacuum. Following Nebraska and Alabama, California recently passed a law giving consumers the rights to know what information a business has collected about them, to “opt out” of a business selling their data, and to have their data deleted. That’s understandable, given growing public demands for data security, but a state-by-state approach to privacy makes little sense.

It would balkanize the seamless digital marketplace that has been key to America’s high-tech leadership, forcing consumers and businesses to run a bewildering gauntlet of varying standards, rules and enforcement regimes. Instead, we need a national privacy law that’s simple but strong, with one common standard and one set of rules that every company must follow and every consumer can understand.

U.S. voters need little convincing. A recent Expedition Strategies poll for PPI found that voters are very concerned about abuses of their personal information. 60 percent said they are worried about tech companies’ handling of privacy and data protection. It’s no wonder a solid majority (58 percent) backs national legislation enshrining consumers’ private rights, as shown in Figure 1.

PPI believes the new Democratic House majority should make a national privacy law a top priority for the next Congress convening in January. Since California’s new rules take effect in 2020, Congress should pass a national law by the end of the year.

Can a Democratic House and Republican Senate find common ground next year on a national privacy bill? The good news is that privacy is not intrinsically a partisan issue. It could provide an early test of Republicans’ willingness to work with Democrats to break the spell of tribal partisan warfare that hangs over Washington, and get our national government back in the business of solving national problems.

Poll Shows Americans View Tech Companies Favorably, Oppose Breaking Them Up

Posted on by The Progressive Policy Institute

Our economy almost certainly has a problem with rising market power. A slew of studies shows that concentration in many sectors of the economy has increased over the past 20 to 30 years. A new PPI study, however, shows that critics of the supposedly overweening power of U.S. tech companies are barking up the wrong tree.

The study, by PPI Chief Economic Strategist Michael Mandel, finds that the digital sector – encompassing tech, telecoms and ecommerce – significantly outperforms the rest of the non-health private sector on every important economic measure, benefitting both workers and consumers. For example, productivity in the digital sector rose by almost 60 percent between 2007 and 2017, prices fell by 15 percent, real annual pay per worker rose by 15.4 percent, and employment grew by 14 percent. Such dynamism is hardly consistent with the critics’ portrait of tech giants throttling competition, suppressing innovation and using their market power to impose higher prices on consumers.

Meanwhile, in the rest of the non-health private sector, productivity grew only 5 percent, prices increased by 21 percent, real annual pay increased by 7 percent, and employment grew by 3.3 percent. If you are looking for evidence that market concentration is weakening our economy and making inequality worse, here’s where you should start.

And for all the glib journalistic talk of “techlash,” Americans don’t see Big Tech companies in a particularly sinister light. In fact, a recent PPI poll found that most voters view the tech giants as testaments to American ingenuity and oppose breaking them up.

The poll, conducted by Expedition Strategies survey on the eve of the midterm election, found that 67 percent of likely voters view the tech companies positively, as shown in Figure 1, and 55 percent oppose breaking them up. While 60 percent of voters acknowledge they are concerned about tech companies’ handling of privacy and data protection, 71 percent of voters view tech companies as “a sign that the American economy is working.” In contrast, just 32 percent view Big Tech as “too powerful.”

That being said, voters do worry about privacy and data protection – in fact, 60 percent of voters say that the industry that concerns them most when it comes to these issues is Big Tech. Voters by a margin of 58 percent to 42 percent also say they’d like to see a national legislative response to privacy regulation rather than a piecemeal state-by-state approach.

Figure 1. Please rate how you feel about the following industries:

Given the general trends toward consolidation, a comprehensive look at market power, competition and innovation across the U.S. economy is certainly in order. But rather than succumb to the reductive nostrum that “big is bad,” progressives ought to engage in a careful, sector-by-sector analysis before they start calling for break-ups and more regulation. As Mandel shows, the evidence suggests that the digital sector does not pose a special problem, and in fact is outperforming the rest of the private sector.

Progressives ought to be vigilant about market power and monopoly, but it makes little sense to draw targets on our most successful companies.

Bellwether Education Partners’ Eight Cities: Exploring Urban America’s Most Successful Education Reform Efforts

Posted on by The Progressive Policy Institute

As a strong proponent of 21st century school systems, Reinventing America’s Schools would like to highlight Bellwether Education Partners’ Eight Cities, a project that attempts to answer the question: “How do you build a continuously improving system of schools?”

The Eight Cities website, https://www.eightcities.org, profiles urban districts that have managed to get “more students into better schools, faster,” by implementing some combination of school-level autonomy, partnerships with charter schools, replacement of chronically failing schools, systemwide school performance frameworks, public-school choice, and strategies to recruit and develop talented teachers and principals.

Local context matters, and each of the eight cities profiled (Oakland, Chicago, Newark, Camden, New York City, Denver, Washington, D.C., and New Orleans) followed a unique path. And sadly, politics occasionally stopped progress in its tracks. But these cities not only grew the number of high performing schools at a faster pace than other areas, they also created education systems that continuously improved.

Their leaders shared some central beliefs, according to Bellwether:

  • Schools are the unit of change
  • Families should be able to choose what’s best for their children among a diverse array of high-performing schools
  • Systems should be responsive to the needs and desire of the communities they serve
  • Those overseeing schools should ensure that they don’t fall below a minimum quality bar

The big takeaway from Bellwether’s project is that systemic change that benefits all students is possible, even in the largest and most politically charged environments. We encourage you to explore Eight Cities and learn more about the nation’s most successful urban education reforms.

Ritz for Forbes, “Trump Once Again Shows Contempt For Young Americans”

Posted on by The Progressive Policy Institute

A new report published by the Daily Beast earlier this week revealed how little President Trump cares about America’s future. When senior administration officials warned Trump about the nation’s growing and unsustainable national debt, the president reportedly expressed little interest in tackling the issue because it wouldn’t create a full-blown crisis until after he is gone from office.

Granted, anyone who paid attention to the first two years of the Trump administration could tell that it doesn’t prioritize fiscal responsibility. Trump’s signature achievement thus far is package of partisan tax cuts that the Congressional Budget Office estimates will add more than $2 trillion to the national debt over the next decade. And its 2018 budget proposal showed that enacting all the administration’s preferred policies would leave the debt significantly larger than it would have been if President Obama’s final budget had been enacted.

Continue reading at Forbes.

 

Welcome to Washington D.C., Dr. Ferebee!

Posted on by The Progressive Policy Institute

This week, Mayor Muriel Bowser named Dr. Lewis Ferebee as the next chancellor of District of Columbia Public Schools.

We at the Progressive Policy Institute have had the privilege and pleasure of working with Dr. Ferebee on several occasions. When working on his book, Reinventing America’s Schools Project Director David Osborne interviewed Dr. Ferebee, and Dr. Ferebee recently joined us as a panelist for our 21st century school system workshops in Baton Rouge and Memphis.

For the last five years, Dr. Ferebee’s work as superintendent of Indianapolis Public Schools has served as an inspiration for those dedicated to empowering educators, expanding options for families and students, and closing the achievement gap. Throughout his tenure as superintendent, Dr. Ferebee pushed decision-making authority down to the schools and championed innovation. He ended the acrimony between the district and the city’s charter schools; created 20 “innovation network schools,” with full autonomy and accountability; expanded decision-making authority for all other district schools; created exciting new choices for families; and supported the implementation of a unified enrollment system for most district, innovation, and charter schools, to give all families an equal shot at quality schools. This fall voters rewarded his leadership by passing a $272 million tax package, the first in a decade.

Welcome to Washington D.C., Dr. Ferebee! We at the Progressive Policy Institute are excited to see what you and your staff can do to increase the number of quality public schools in D.C., particularly in the city’s poorest wards, where they are so desperately needed.

Yarrow for RealClearPolicy, “Welcome to Post-Thrift America”

Posted on by The Progressive Policy Institute

How did we arrive at a new normal of indifference to living on borrowed money? Federal budget deficits are poised to eclipse $1 trillion in 2020 and may never fall below that level again. There was hardly a word about this once-hot issue among Democrats or Republicans running in the midterm elections. Similar problems of matching spending with revenues exist at the state level, where unfunded pension liabilities grow while taxes are cut.

At the individual household level, following an uptick in savings after the Great Recession, most Americans can’t or don’t care about saving or balancing spending and income. About 80 percent of the population carries debt, totaling about $13 trillion, and one in five households have zero or negative assets.

The transition to this new normal has been as much a cultural story as a political or economic one. Whether one speaks of “thrift,” “living within one’s means,” or “pay as you go,” these were long the dominant values and standard practices of both governments and families. Throughout U.S. history, Americans and their government generally spent no more than their income or revenues and, ideally, would save some money. Of course, there were exceptions — such as wars and emergencies, and for individuals, poverty and other hardships — that necessitated borrowing. Economically, saving and investment were underpinnings of successful capitalism, and, morally, profligacy was a sin. Those who spent extravagantly were shady characters, while responsible budgeting was a sign of moral rectitude.

Continue Reading at RealClearPolicy.

The Price of Food vs the Price of Internet Access

Posted on by The Progressive Policy Institute

Here’s what you need to know. Between 2000 and 2017, the price of food went up by 41%, according to the BEA. The price of Internet access fell by 21%. Which change is more harmful to consumers?

Oh, yes, and food at home accounts for 6% of household spending, while Internet access accounts for 0.6%.

It’s worth noting that while the tech/telecom/ecommerce sector has been cutting prices since 2000, a wide variety of sectors have boosted prices sharply. Since 2000, the price of private sector higher education has gone up by 148%; the price of consumer financial services has gone up by 69%; the price of motor vehicle insurance has gone up by 67%; housing rents have gone up by 65%; the price of eating out has gone up by 60%; and so forth.

https://www.progressivepolicy.org/publications/competition-and-concentration-how-the-tech-telecom-ecommerce-sector-is-outperforming-the-rest-of-the-private-sector/

https://www.forbes.com/sites/michaelmandel1/2018/11/29/why-digitizing-food-manufacturing-can-boost-living-standards/