Category: Uncategorized

In Search of a Competition Policy for the Digital Sector

Posted on by Max Sherrill

Introduction

Competition policymakers have a difficult relationship with the digital sector. The large digital ecosystems, in particular, pose a unique challenge. The combination of economic features that foster high concentration and market power, rapid growth via M&A, and high levels of innovation go a long way toward explaining competition policy’s legacy in the digital sector.

This legacy features virtually no challenges to digital mergers across two massive cycles of mergers and acquisitions (M&A) beginning in the mid-1990s. These cycles include the expansion of the now mature, first-generation digital ecosystems and the most recent build-out of cloud and artificial intelligence that continues to drive the digital transformation and its impact on innovation and economic growth.

Antitrust enforcement, which works to spur innovation by promoting competition, must find a way to address market power in the digital sector against a backdrop of rapid growth and innovation. It has been reticent to do so. Only recently have enforcers more vigorously engaged with the digital ecosystems. But a recent series of merger challenges in the U.S. have proved unsuccessful. Moreover, the recent surge of monopolization cases against large players will take years to resolve and the remedies that will ultimately emerge in successful cases remain uncertain.

This approach to U.S. antitrust enforcement is not likely to be effective in a rapidly transforming digital sector that is charging ahead at warp speed. By the same token, the compliance-based ex ante regulation of digital platforms in Europe is no panacea. Few competition policy experts, however, have asked whether a more coherent policy approach to promoting competition in the digital sector is desirable, or needed. This PPI report, “In Search of a Competition Policy for the Digital Sector,” concludes that it is.

PPI’s analysis unpacks the major factors that collectively bear on the need for a more clearly articulated digital competition policy. These include the unique economics and business models in the digital sector, rapid growth through acquisition, and high levels of innovation and dynamism. The analysis evaluates the policy implications, against this unique backdrop, of antitrust’s late arrival on the digital scene. It proposes three initiatives that lay the groundwork for framing a coherent digital competition policy:

• The next political administration should convene an expert “blue ribbon” commission to identify digital competition policy approaches that address both market power and innovation in the digital sector.

• The U.S. antitrust agencies should commission a comprehensive set of retrospectives on past digital merger cases, including cases that were challenged, and those that were investigated but did not lead to an enforcement action.

• The U.S. antitrust agencies should issue guidance on antitrust remedies, including updated guidance on merger remedies but also anticipated approaches to restoring competition in successful digital monopolization cases.

Read the full report.

U.S. Constitution: “Congress Shall Have Power to Lay and Collect Taxes, Duties, Imposts, and Excises”

Posted on by Max Sherrill

TRADE FACT OF THE WEEK: U.S. Constitution: “Congress shall have Power to lay and collect Taxes, Duties, Imposts, and Excises.”


THE NUMBERS: Tariff collection 2018-2024 –

Congressionally authorized “MFN” tariff system: $216 billion
Administratively created “301” and “232” tariffs: $249 billion

WHAT THEY MEAN:

The 2024 election’s core questions are more basic than policy choices.  Such as: Can a person who has attempted to overthrow a settled election, and called for “termination” of unspecified parts of the Constitution, take and keep an oath to ‘faithfully execute the office of President of the United States’ and ‘preserve, protect, and defend the Constitution’? With this in the background, here’s the person in question talking about Congress and his tariff plan (10%, or 20% tariff on all products, and a 60% tariff on Chinese-produced goods):

“I don’t need them. I don’t need Congress, but they’ll approve it.  I’ll have the right to impose them myself if they don’t.” 

Such ideas would have big daily-life impacts. (How would a 20% tax on the $300 billion in U.S. energy imports affect heating and gas bills? on the $139 billion worth of auto parts bought by factories and repair shops? on family budgets for over-the-counter medicines, clothes, and groceries?) The insistence on going without Congress, though, raises a more basic and abstract question of governance: who should be able to impose a tax?

The Constitution gives a pretty clear answer. Its four sentences on trade policy all come from “Article I” (on Congress), with two from Section 8’s “enumerated powers” list, and two from Section 9’ “denied powers” list. The first (see below for the others) says flatly that “The Congress shall have Power to lay and collect Taxes, Duties, Imposts, and Excises.”

Giving Congress this power wasn’t a big Constitutional-drafting controversy. The “taxes, duties, imposts, and excises” clause, in fact, appears to have survived untouched from the first draft presented to the Constitutional Convention on August 6, 1787, to its publication on September 19th. James Madison’s notes of the August 16 session (the day the Convention debated import and export taxes) report none of that day’s 15 speakers arguing that a president should be able to set tariff (or other tax) rates. Why not? A single individual given power to set tax rates could use them to reward self and friends, punish critics, impoverish political or business rivals, etc..  A big Congress with lots of mutually suspicious factions might not find this impossible, but would have much more trouble agreeing to do it.

This pristine separation-of-powers approach thinned over time for practical reasons, as 19th-century case law (Brig Aurora in 1813, Field v. Clark in 1892) and 20th-century trade bills alloyed it with several forms of “delegation.” “Trade remedy laws,” for example, authorize tariffs in cases of ‘dumping’ and subsidies; “trade promotion authority” bills set out content and implementation rules for free trade agreements and similar ‘liberalizing’ policies, after giving detailed descriptions of when Congress would like Presidents to do these things. Whatever one’s opinion of the merits of trade remedy laws and trade agreements, “delegation” in these cases seems clearly a convenience in which Congress defines policy and asks presidents to execute it without the need for a new law, and courts have decided this is reasonable.

Three or four other laws, though, may have inadvertently provided presidents with something closer to genuinely arbitrary power. “Section 232” and “Section 301” of the U.S. trade law code give presidents rights to impose tariffs by themselves, respectively, as a negotiating tactic to eliminate “policies and practices” burdening U.S. commerce, and as a way to defend expansively described national security interests. The first Trump administration used “232” to raise tariffs on steel and aluminum, and “301” to do this for most Chinese-made goods. As a practical matter, this roughly doubled the size of the tariff system, with the new administratively created tariffs yielding slightly more than twice as much tax revenue as the Congressionally legislated “MFN” tariff system. Two other laws, “Section 338” and the International Emergency Economic Powers Act, have comparable “president says there is an emergency” approaches.

None of these laws, of course, envisions a president deliberately bypassing Congress to create a new tax system “by myself.” So there’s room to wonder about whether courts would strike down an attempt to try. If they didn’t — see below for two speculative, but legally-well-informed, short essays on different sides of this question) — the talk of “terminating” at least one important part of the Constitution wouldn’t seem idle.

FURTHER READING

From the National Archives, the Constitution transcript.

Madison’s notes on the August 16, 1787, debate on tariffs and export tax powers.

The Federalist Papers (see #30-#36 for taxation).

Congress explains each clause.

And Customs and Border Protection reports collection of administratively imposed “301” and “232” tariffs.

For the record, here are the Constitution’s four trade policy sentences. All are “Article I”, on Congressional organization and powers, with two in Section 8’s “enumerated powers” list, and two in Section 9’s “denied powers”:

Section 8: “The Congress shall have Power to lay and collect Taxes, Duties, Imposts, and Excises” and [power] “to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”

Section 9: “No Tax or Duty shall be laid on Articles exported from any State” and “No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another; nor shall Vessels bound to, or from, one State be obliged to enter, clear, or pay Duties in another.”

What if somebody tried?

Do current trade laws abandon or override the “Taxes, Duties, Imposts, and Excises” clause?  Two informed views –

Alan Wolff of the Peterson Institute for International Economics, former Deputy U.S. Trade Representative and long-time trade law practitioner, thinks courts might say no.

Warren Maruyama, former U.S. Trade Representative Office General Counsel and likewise long-time trade law practitioner, joins CSIS’ Bill Reinsch and Lyric Galvin in the other view – courts typically ‘defer’ to Congressional laws delegating powers, and would likely do so again.

Some past Supreme Court practice –

Brig Aurora (1813, involving the seizure of cargo carried on a British merchant ship during the War of 1812).

Field v. Clark (Chicago retail pioneer Marshall Field complaint against Clark, a Harrison administration official in charge of collecting tariffs at the Chicago port, for imposing retaliatory tariffs under an 1890 law).

And a quick Congressional summary of their impact.

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.

Jacoby for The Bulwark: War-Weary Electorate Leaves Harris Little Room to Maneuver on Ukraine

Posted on by Max Sherrill

Presidential elections are rarely decided on foreign policy, and this year will be no exception. But poll after poll shows a deepening, bipartisan fatigue with foreign entanglements.

The question we face, as important as who will be the next president, is will America slide into isolationism and a disastrous retreat from world affairs?

A new survey by the Wall Street Journal placed that fatigue in stark relief. It asked voters in seven battleground states which presidential candidate they thought was best equipped to guide American foreign policy—specifically, the conflicts in Ukraine and the Middle East. The result was stunning. Trump leads by a mile: 50 percent to 39 percent on who is best able to handle the war in Ukraine and 48 percent to 33 percent on managing the contest between Israel and Hamas. Also striking, on this issue, the former president enjoys a wide lead among independent voters and even garners significant support among Democrats.

Keep reading in The Bulwark.

Ainsley in BBC: PM says he’s faced ‘choppy days’ since getting the job

Posted on by Max Sherrill

“When I look at what it was I wanted to achieve in the first 100 days and ask myself, have we done what I wanted us to do, what I planned for us to do, the answer is yes.”

Claire Ainsley, chair of the Building Back Britain Commission and a former director of policy to Starmer, told BBC Radio 4’s Today programme that it was “daft to deny” the government had seen choppy moments.

But she argued that “some of the big judgement calls I think they have got right” – pointing to Starmer’s international diplomacy efforts and “honest” assessment of the state of the public finances.

Read more in BBC.

Manno for Stanford Social Innovation Review: The End of ‘College for All’

Posted on by Alex Terr

For at least the last 25 years, the primary goal of K-12 schools in the United States has been “college for all”—the ideal that all high school graduates go to college. As a result, America’s schools do not typically provide young people with work experience or make career education central to their offerings. This gap leaves high school students with little understanding of work and the practical pathways to jobs, careers, and further education.

Today, college for all is losing public support. When Americans were asked to rank their priorities for K-12 education, “being prepared to enroll in a college or university” dropped from the 10th highest priority (out of 57) in 2019 to 47th in 2022, according to the nonpartisan think tank Populace. Other surveys reveal a growing skepticism about the value of a four-year degree. More than half of Americans (56 percent) think a degree is not worth the cost, with skepticism most pronounced among college-degree holders ages 18 to 34.

Many employers, meanwhile, no longer use a college degree as the gatekeeper credential for jobs, shifting from degree-based to skills-based hiring. And a study published by Strada Education Foundation of the careers of more than 60 million workers and millions of online job postings found that 10 years after degree completion, 45 percent of graduates were underemployed in jobs not requiring a degree.

Keep reading in Stanford Social Innovation Review’s Fall 2024 Edition.

Juul for The Hill: The US should get out of the way and let Ukraine hit back

Posted on by Alex Terr

The Biden administration’s steadfast support for Ukraine in its fight against Russian aggression has been laudable. But an inordinate and unwarranted fear of “escalation management” has hamstrung American policy.

Administration officials agonize over whether supplying certain weapons to Ukraine will be seen by the Kremlin as somehow escalatory. As a result, the provision of crucial military hardware like tanks, long-range rockets and fighter jets has been held back — only to eventually be provided without much more than grumbling from Moscow.

Even then, however, the administration persists in setting too many constraints on when and where Kyiv can use U.S. weapons for fear of antagonizing Vladimir Putin.

Keep reading in The Hill.

Marshall for The Hill: Democracy and Reality Are on the Ballot

Posted on by Alex Terr

As Kamala Harris and Donald Trump sprint toward the finish of the shortened 2024 presidential race, it is time to ask: What issue should be foremost in U.S. voters’ minds when they cast their ballots?

It’s not the cost of living, immigration, abortion or foreign wars, though all are critically important. Overshadowing them is this election’s meta-issue — the insistent question that just won’t go away: Can Americans entrust their democratic institutions and traditions to a vengeful Trump and a Republican Party he has remade in his image?

Trump is acutely aware of the danger in that question. He accuses Harris and “radical leftists” of posing the real threat to U.S. democracy.

With trademark disregard for honesty, civility and intellectual coherence, Trump piles on the insults, calling the vice president a socialist-communist-fascist dumbbell who’s “mentally impaired” to boot.

It’s ugly and nonsensical, but, hey, it’s Trump; in his carnival barker playbook, making sense is for losers.

Keep reading in The Hill.

Manno for Forbes: Charter Schools’ Virtuous Improvement Cycle Betters K-12 System

Posted on by Alex Terr

“Charter school laws have been arguably the most influential school reform efforts of the past several decades,” write economists Douglas Harris and Feng Chen.

Since the first law creating these independent public schools of choice was passed in 1991, we’ve learned many lessons about their impact on students, the traditional K-12 system, and the communities where they exist. Here are three of those lessons:

1. Charter schools reduce academic inequality by closing student
achievement gaps.

2. Charter schools raise the overall quality of public schools.

3. Creating more charter schools will improve the quality of K-12 public schools and reduce inequality in America.

This is what I call the virtuous improvement cycle of charter schools.

Keep reading in Forbes.

Gresser in The Economist: How America learned to love tariffs

Posted on by Max Sherrill

Another justification, which has more credibility among policy types in Washington, DC, is that, if well targeted, tariffs can meet national-security needs. When it recently increased levies on Chinese EVs, semiconductors and solar modules, the Biden administration said that China’s clout in such industries created unacceptable risks for America’s economic security.

America and other countries do have reason to fret about Chinese dominance of critical technologies, not least because of China’s willingness to block exports during international spats. But using tariffs for national-security goals poses problems. Invoking security becomes a convenient excuse for protectionism, as when the Trump administration placed tariffs on steel and aluminium imports from the EU and Japan. Moreover, a tariff is not exactly a robust defence against a true security threat. “If something is really dangerous, you should probably ban it rather than tax it,” says Ed Gresser of the Progressive Policy Institute, a think-tank.

A final defence of tariffs is a more limited version of the first supposed rationale. Rather than saying that tariffs benefit the economy as a whole, advocates say they are needed to support the growth of specific sectors. The Biden administration has, for instance, argued that its new China tariffs are protecting the very sectors that the government has been trying to cultivate through its big investments.

Read more in The Economist.

Antitrust regulators shouldn’t disassemble one of America’s engines of growth

Posted on by Alex Terr

The Department of Justice has presented its framework of sweeping potential remedies in the Google antitrust case, including “behavioral and structural” changes that go far beyond the specifics of the court’s findings.

But government antitrust regulators should be wary about disassembling one of America’s engines of growth. The information sector — of which Google is an important contributor — has performed amazingly well in recent years, accounting for more than a quarter of all private sector growth since 2019. Over the same stretch, the information sector also benefited customers by lowering prices while the rest of the economy was going through an inflationary surge.

Equally important, tech firms are America’s technological leaders in an increasingly competitive world, filling in the gap left by a lack of government funding for research and development.  Over the past ten years, inflation-adjusted U.S. R&D spending has risen by more than 60%. Virtually none of that increase in real R&D spending came from government. Ironically, the competitiveness-enhancing R&D gains have been almost totally driven by businesses such as Google, which invested a stunning $45 billion in R&D in 2023, more than triple a decade earlier.

In a 2022 report from PPI’s Innovation Frontier Project, “American Science And Technology Leadership Under Threat: Restrictive Antitrust Legislation And Growing Global Competition,” co-authors Sharon Belenzon and Ashish Arora of Duke University argue that:

“Antitrust regulations that reduce the size and limit the scope of tech firms weaken their incentives to make the large-scale, long-run investments in science and technology, vital for national security and economic prosperity….At a time when the United States critically depends on a handful of firms to pursue large scale research projects, such proposals would play into the hands of foreign rivals.” 

They further went on to conclude that:

“There is a close relationship between the incentives to invest in research and the scale and scope of the firm. Without the leadership of firms with substantial scale and scope, the full potential of general-purpose technologies may not be realized.” 

Antitrust regulators may be tempted to “fix” America’s engines of growth by disconnecting parts deemed to be unnecessary. But remember: The rest of the world looks enviously at the U.S. tech sector, which is running fast and investing for the future.

PPI Statement: DOJ Serves Up the Kitchen Sink of Remedies in U.S. v. Google

Posted on by Alex Terr

WASHINGTON — Today, Diana Moss, Vice President and Director of Competition Policy at the Progressive Policy Institute (PPI), issued the following statement regarding the U.S. Department of Justice’s (DOJ) proposed remedies framework in the case U.S. v. Google (2020):

“Even before a decision is made to file a case, public antitrust enforcers pragmatically have their eye on the ‘end-game.’ That is, if the government wins its case, what remedies are needed to restore the competition lost by consolidation or business practices that stifle competition and hurt consumers? The U.S. Department of Justice (DOJ) case against Google in online search markets is the first modern monopoly case to take on this important question. It follows a federal district court opinion finding that Google holds monopoly power and illegally maintained that power in two online search markets.

“Yesterday, the DOJ issued its proposal for a framework of possible remedies to restore competition in online search markets. The wide-ranging document includes remedies that are responsive to Judge Mehta’s ruling that Google has too much market power in online search. These include a ban on paying some equipment manufacturers to make the Google search engine the exclusive default on smart phones and web browsers.

“But some of the remedies on DOJ’s list appear to go beyond the scope of the court’s findings, with broad impact on Google’s business model, value proposition, and complex engineering-economic machinery. For example, it covers structural remedies, such as the spin-off of Google’s Chrome browser. It is no secret that the administration’s antitrust enforcers have been searching for ways to break up America’s big tech firms. It is unclear at this time, however, if such a remedy is either necessary or appropriate to resolve the specific issues that Judge Metha identified.

“Breakup remedies may not be effective, either, because they have not been tested in complex digital ecosystems. If remedies failed in a grocery store merger like Safeway-Albertsons, then only imagine the challenges in a complex digital ecosystem. As always, consumers will ultimately bear the burden of a failed remedy, emphasizing the great care necessary to connect it to specific competitive harms.

“Perhaps most important, DOJ’s filing includes extensive behavioral conditions, or restrictions on business operations. Unlike its monopolization case, which is grounded in facts, the DOJ’s fixes are unfettered by the constraints of evidence and experience. Behavioral remedies are well-known to be ineffective, as is clear from years of violations following the Live Nation-Ticketmaster merger.

“Other behavioral remedies suggested by the DOJ seem hubristically divorced from their potential adverse impact on user privacy or online security. They also involve sharing of data and APIs that could transform search into an essentially open source, open access platform. Such remedies, which amount to de facto regulation, are likely to impact innovation — potentially disrupting the incentives to innovate that anti-monopoly law is designed to promote.

“The U.S. v. Google case is at a critical stage. The DOJ will propose more detailed remedies in November 2024. These remedies could well set the mark in other, pending digital monopolization cases. This makes it even more important to avoid a ‘kitchen sink’ approach to proposed remedies and instead bear down on the most effective fixes for restoring specific competitive concerns.”

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. Find an expert at PPI and follow us on Twitter.

Follow the Progressive Policy Institute.

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Media Contact: Ian O’Keefe, iokeefe@ppionline.org

Searching for the Tipping Point: Scaling Up Public School Choice Spurs Citywide Gains

Posted on by Alex Terr

Find the Preface by Will Marshall in the full report below. 

INTRODUCTION

Charter schools are public schools, free and open to all. Like traditional public schools, charter schools are prohibited from charging tuition, must not discriminate in admissions or be religious in their operation or affiliation, and are overseen by a public entity.

Much has transpired since the first charter school law was approved in 1991 by the state of Minnesota. Today, 46 charter laws have created about 8,000 schools and campuses. Cumulatively, they enroll 3.7 million students (around 7.5% of all public school students), according to the National Alliance for Public Charter Schools’ (NAPCS) Data Dashboard. NAPCS also reports that charter schools employ around 251,000 teachers. Around six out of 10 (58.1%) schools are in urban areas, with the others in suburbs (24.9%), rural areas (11.4%), or smaller towns (5.6%).

While there are many nuances, the primary difference between public charter schools and traditional district schools is their governance model. In addition to oversight from a charter school authorizer accredited by state statute, public charter schools are governed by their own nonprofit boards. Board members are normally selected for their strong community connections and their commitment to advancing the particular mission of their school or network of schools.

In contrast to the traditional school district one-size-fits-all model, public charter schools are free to innovate to meet the needs of the children and parents who choose to attend them, whether it’s a unique curriculum, a unique school calendar, an emphasis on project-based learning, access to specific career pathways, or something else.

Decision-making in public charter schools, unlike traditional schools with central district offices, happens far closer to the students and the families who enroll them — in the vast majority of cases, by the teachers and school leaders who interact with students on a daily basis.

In states with strong charter school laws, charter schools are held to higher accountability standards than traditional district schools, which are rarely closed for poor performance.

The federal No Child Left Behind (NCLB) law — in force from 2002-2015 — was designed to scale up the federal role in holding schools accountable for student outcomes. NCLB is now frequently criticized for being too punitive, but even under its aggressive restructuring requirements, only 3% of very low-performing traditional public schools were taken over by state departments of education, and only 1% were reopened as charter schools.

Charter schools, on the other hand, commit to obtaining specific educational objectives in return for a charter to operate a school. A school’s charter is reviewed periodically by the entity that granted it and can be revoked if the conditions of the charter are not met. In New Orleans, for example, the Education Research Alliance at Tulane University (ERA) found that the replacement of underperforming schools with higher performing schools was the single most important factor in the system’s rapid improvement. ERA’s 2016 report, “The Effects of Performance-Based School Closure and Charter Takeover on Student Performance,” stated, “If policymakers can identify and intervene in the lowest performing schools (however they choose to define it), and ensure that students will end up in better schools afterward, then the evidence here suggests that school closure and takeover can have large positive effects and be a meaningful contributor to school improvement efforts.”

A new University of Colorado study released in September 2024 on the Denver reform “era” (20082019) found that most students who left closed Denver schools and attended new ones saw their test scores go up, with greater gains for English learners and students with disabilities. Student achievement also went up districtwide, which study authors attribute to years-long efforts to give school leaders more autonomy, hold them accountable for results, and make it easier for families to choose among a range of schools.

Decades of empirical research supports what ERA found in 2016 and what University of Colorado learned last month: When thoughtfully implemented with strong accountability measures, innovative, autonomous public schools move the needle for thousands of students, especially children from low-income households in urban areas.

Stanford University’s Center for Research on Education Outcomes (CREDO) has undertaken many local studies and, in 2023, released its third major national report in a series spread out over the past 30 years. In that massive study, CREDO researchers assessed the performance of students at 6,200 charter schools in 29 states between 2014 and 2019, confirming that charter-school students, on average, outperformed their peers in demographically-matched traditional public schools.

There have also been studies that find a “spillover effect.” In other words, when a system has a mix of different types of public schools, including public charter schools, student learning increases for everyone. The Thomas B. Fordham Institute, an education-policy think tank, in 2024 found that “…average test scores for all publicly enrolled students in a geographic region rise when the number of charter schools increases.”

Of course, test scores are not the sole means of measuring school quality. Another indicator is parent demand. Most parents, if given a choice and — importantly — are provided the information needed to make informed choices, will naturally do what is best for their children’s education. Every school year, hundreds of thousands of families nationwide demand increased access to high-quality public school choices like charter schools, as evidenced by data from waiting lists for oversubscribed charter school seats. For example: In North Carolina alone, more than 85,000 students were on waiting lists for the 2024-25 school year.

Minority parents nationally are the most enthusiastic charter school users. According to the NAPCS’ Data Dashboard,16 charter schools have consistently enrolled more students of color and students from low-income families than traditional district schools. Currently, seven out of 10 (70.7%) charter students are students of color compared to around half (53.8%) of district students, with six out of 10 charter students receiving free and reduced lunch compared to half (50.3%) in district schools. An opinion poll released in May 2024 by Democrats for Education Reform found that 77% of parents, including 80% of Black and 71% of Hispanic parents, had a favorable view of public charter schools.

The student performance data in this new report adds an important dimension to the growing body of research highlighting the superior performance benefits of growing well-designed portfolio systems that include a mix of both traditional and charter public schools.

Importantly, this analysis looks at correlation, not causation. There are many theories about the cause of this spillover effect. Our findings add credence to the long-stated supposition that public charter schools create a competitive dynamic that compels traditional district schools to upgrade their teaching and learning to maintain enrollment, so that conditions improve for all children. Another common explanation, as charter schools uncover better ways of motivating learning, other schools in that same geography then adopt those innovative practices. Or, an increase in school options to make it more common for parents to find a school that is the optimum fit for unlocking their child’s potential.

While more research on these theories is required, the existing evidence of positive spillover effects bolsters the case for making public school choice a key element of a national policy. We call on the nation’s elected leaders to embrace policies aimed at expanding high-quality autonomous schools so that more cities can strive for the gains we describe here.

The report concludes with recommendations for further research into why increased public school choice lifts school quality and how cities that currently have even a small share of public charter school students can strengthen their gapnarrowing capacity.

KEY FINDINGS

The major findings of this report are as follows:

1. Over the last decade, cities that have aggressively expanded high-quality public school choices available to students have seen a true rising tide: Low-income students across these cities — whether they attend a public charter or district-operated school — have started to catch up to statewide student performance levels.

2. This is particularly true when at least one-third of a city’s students are enrolled in a public charter school or charter-like school: Outcomes improve citywide over time.

3. In the 10 U.S. cities serving majority low-income students with at least one-third enrolled in charter schools, low-income students citywide have made meaningful progress toward achieving on par with students statewide.

READ THE FULL REPORT. 

 

Job Moves: 9 Steps for Making Progress in Your Career

Posted on by Max Sherrill
On this episode of Radically Pragmatic, Bruno Manno, PPI’s Senior Advisor and Director of the What Works Lab, talks to Michael Horn about his new book, Job Moves: 9 Steps for Making Progress in Your Career, co-written by Ethan Bernstein and Bob Moesta.
Michael is the co-founder of, and a distinguished fellow at, the Clayton Christensen Institute for Disruptive Innovation and teaches at the Harvard Graduate School of Education. His book will be released on November 19. You can find more information at https://michaelbhorn.com

Pennsylvania Produces 1.5% of All World Energy

Posted on by Max Sherrill

TRADE FACT OF THE WEEK: Pennsylvania produces 1.5% of all world energy.


THE NUMBERS: World energy production, 2022, in BTUs* – 

Area Energy production
World 598 quadrillion BTUs
China 137 quadrillion
U.S.   99 quadrillion
(Texas)   25 quadrillion
(Pennsylvania)   10 quadrillion
(New Mexico)     7 quadrillion
Russia   60 quadrillion
Saudi Arabia   30 quadrillion
India   22 quadrillion
Canada   22 quadrillion
All other 228 quadrillion

* Energy Information Administration. A “BTU” (British Thermal Unit) is the amount of energy needed to raise the temperature of a pound of water by one degree Fahrenheit.

WHAT THEY MEAN:

From the “oil shocks” of the 1970s until recently, energy policy arguments featured mostly moaning, grim charts illustrating the consequences of “energy dependence” on unstable parts of the world, and predictions that things would get worse.  Here’s what’s actually happened, using the year 2003 — 20 years ago — as a point of departure:

Starting point: According to the Energy Information Administration (the Department of Energy’s data and research arm), in 2003, Americans produced 67.3 quadrillion “BTUs” worth of energy, and used 95.8 quadrillion BTUs. This meant Americans bought, on net, about 28.5 quadrillion BTUs from foreigners, mostly in the form of crude oil.  The resulting economy (a) employed 130 million people, (b) produced $11.7 trillion worth of farm products, manufactured goods, movies, government programs, and other goods and services (which, converted to the Bureau of Economic Analysis’ “constant 2017 dollar” figures to allow for meaningful comparisons with today’s economy, would be $14.9 trillion), and (c) released 5.7 billion tons of carbon dioxide.

Since then, two big changes in the energy figures:

More production: Scarcity and price instability produced curiosity about whether we might find more at home.  With heavy deployment of solar panels and wind turbines, drilling for natural gas, and so forth, the BTU count of domestically produced energy has grown from 67.3 quadrillion in 2003 to 91.9 quadrillion in 2020, and 102.8 quadrillion in 2023.  In other words, domestic energy production has jumped by 40% since 2003, and by 10% since 2020.  According to the Bureau of Economic Analysis, Pennsylvania — the site of the world’s first oil well in 1859 — has seen energy income rise like this:

Year Energy Income
2023 $8.1 billion
2019 $5.3 billion
2003 $0.3 billion

 

More Efficiency: Likewise, scarcity and price instability produce caution, efficiency, and savings.  As America’s energy production has grown, use has dropped from 95.8 quadrillion BTUs in 2003 to 93.6 quadrillion in 2023. To put this 2.2 quadrillion BTU drop in perspective, total annual energy “consumption” figures are 10.8 quadrillion BTUs in Brazil, 1.6 quadrillion in Sweden, and 4.9 quadrillion in Taiwan. Carbon dioxide emissions, meanwhile, have dropped by about 25%, from 6 billion tons a year in the mid-2000s to 4.5 billion as of 2023.

Endpoint: As of 2023, the $28 trillion U.S. economy – $22.7 trillion in BEA’s constant 2017 dollars — employed 156 million people. Converting all this into BEA’s inflation-adjusted “constant 2017 dollars,” the 2% decline in energy use, and the accompanying 25% drop in carbon dioxide emissions, have accompanied the following big-picture changes:

2003 2023 Change
‘Real’ GDP $14.9 trillion $22.7 trillion   +52%
Manufacturing   $1.7 trillion   $2.3 trillion   +36%
Mining   $0.16 trillion   $0.34 trillion +111%
Agriculture   $0.14 trillion   $0.19 trillion   +36%
Employment 130 million 156 million +26 million

 

With respect to trade, meanwhile, the “dependence” of the 1970s through 2000s has not totally vanished — Americans still buy lots of crude oil from the Middle East, lots of solar panels from Southeast Asia, and lots of electricity from Canada.  But fundamentally, the world depends on the U.S. to sell energy, not the other way around.  Trade balance data, converted into BTUs, look like this:

Year    US Trade Balance (BTUs)
2023      +9.2 quadrillion BTUs
2020      +3.5 quadrillion BTUs
2010    -21.7 quadrillion BTUs
2000    -24.9 quadrillion BTUs
1980    -12.1 quadrillion BTUs

What can we expect next? Energy trading will likely change sharply in the next decade, as fossil fuel use falls and countries rely more frequently on materials and machines used to generate and convert electricity, and thus use electricity in ways that look like “stocks” than “flows.” Neither renewable technologies like wind turbines nor electrified end-use technologies like heat pumps and batteries, for example, use fuels to operate. So perhaps “trade” will include fewer BTUs overall, and more materials and machines used to generate and convert electricity.  Having surprised everyone by evolving into the world’s top source of energy since 2003, the U.S. now likely needs more powerful domestic clean energy supply chains to stay in the role.

* The “British Thermal Unit,” like the 159-liter/42-gallon “barrel ” of oil, is a defiantly non-metric energy unit.  The BTU and the annual amount of dollar-trading on forex exchanges are the only indexes of human activity measured in quadrillions, and BTUs will likely soon hit the 1 quintillion — 1,000,000,000,000,000,000 — plane. As a comparison, the mass of the moon is about 78 quintillion tons.

FURTHER READING

PPI’s Elan Sykes and Paul Bledsoe on energy and the next American economy.

Gov. Josh Shapiro’s Pennsylvania energy strategy.

Data & rankings

The Energy Information Administration has the basic BTU-as-trade data … and ranks energy output by country.

Note on this: China is the world’s top energy producer, but rankings look different depending on the type.  Of China’s 138 quadrillion BTUs, 106 quadrillion come from coal.  India is the No. 2 coal producer at 17 quadrillion BTU, and Indonesia is third at 12 quadrillion; together with China, this is 80% of world energy from coal. The U.S. however edges China by 15 quadrillion to 14 quadrillion in “nuclear, renewables, and other”; the U.S. is also first in both natural gas at 37 quadrillion BTU (above Russia’s 23 quadrillion and Iran’s 10 quadrillion), and petroleum at 32 quadrillion as against Saudi Arabia’s 25 and Russia’s 23.

… EIA defines the “British Thermal Unit”.

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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Lewis for RealClearHealth: We Can Further Reduce Smoking

Posted on by Max Sherrill

By Lindsay Mark Lewis

For what are often very different reasons, Republicans and Democrats are prone to anger when government doesn’t work. Conservatives are, by nature, skeptical of regulation. Progressives, by contrast, are frustrated when bureaucratic bungling gives the government a bad name. So it’s no surprise that there is growing bipartisan outrage over the Food and Drug Administration’s (FDA) failure to efficiently review novel reduced-risk products and allow them to enter the marketplace. Expediting consumer access to these products is both an obvious and commonsense approach to reducing the harm of smoking. The bottom line is clear: With the invention of new, safer nicotine delivery products, we have at our disposal a technology that is poised to dramatically reduce the nearly 500,000 smoking-related deaths that occur each year in America. But despite these innovations, the FDA is dragging its feet in making these devices available. At a moment when faith in public institutions is, in fact, flailing, the current predicament is utterly outrageous.

If we had the power to end the scourge of unhealthy choices in America, it would surely be for the greater good. But until someone invents that magic wand, smart public health policy demands that we steer people away from the most dangerous behaviors. As many know, among the most harmful ways to consume tobacco is through smoking it. Cigarette smoke fills the lungs, and that smoke and tar put smokers at great risk of a whole range of illnesses and conditions, with cancer and emphysema among them. That’s where smokeless tobacco and nicotine products come in. These new products are an incredibly effective strategy for reducing harm. Why, then, are federal regulators preventing so many of them from hitting the market?

Keep reading in RealClearHealth.

Johnson for The Bulwark: Economic Growth Is Good, Actually

Posted on by Max Sherrill

By Jeremiah Johnson

RECENTLY, A THREAD THAT CALLED FOR a return to communal kitchens and handwashing laundry went viral on X, prompting a high-pitched conversation about the concept of “degrowth.” Mainstream liberals and conservatives both got in some entertaining dunks on the idea, but the episode also gave rise to some worthwhile discussions on the nature of economic growth. The ideology of degrowth as it’s most often articulated is stupid, and I won’t rehash the many good arguments against it here. What’s harder to explain is exactly why we value growth as opposed to other possible core values.

Keep reading in The Bulwark.