The Springfield Empowerment Zone Partnership

Springfield, Massachusetts, is where the United States’ one wholly indigenous sport – basketball – was invented. It may soon be known for a completely different innovation.

The Springfield Empowerment Zone Partnership (SEZP) is an attempt to create within the public schools the conditions that make charter schools successful, without the poisonous politics that often accompany expanding charters. The school district has contracted with a nonprofit board, a 501(c)3 organization, to oversee struggling middle schools. That board, which acts as a buffer between schools and district management, has empowered nine schools with autonomy and accountability while bringing in an outside school management organization to run one of them.

These schools – and, in fact, the Zone as a whole – remains part of the public school district, drawing on it for a range of shared services. The teachers in the Zone are unionized; indeed, the union voted for these reforms. But the existing and new principals at the reins are being given authority to choose their own teaching teams, propound a vision for their school, and restructure the school day, curriculum, and budget to achieve it. While teachers cannot be dismissed at will, principals do receive support to help underperforming teachers improve where possible and to remove them where necessary. And there are real consequences – for principals and teachers alike – for school failure.

 


 

Amazon Fastest US Company to 300,000 Jobs

Amazon just announced that it would add more than 100,000 fulltime jobs in the US over the next 18 months.  That’s fantastic.

But even before that announcement, it turns out that Amazon was the fastest US company to reach 300,000 jobs. That’s based on a new paper we are releasing today, called “A Historical Perspective on Tech Job Growth.” Here’s the  beginning of the paper.

General Motors reached 300,000 employees in 1941, 32 years after its 1909 founding. American Telephone & Telegraph hit the same milestone in 1926, 27 years after its 1899 absorption of the local Bell systems. And Walmart went over 300,000 associates in its 1991 fiscal year, its 21st year as a public company.

But in 2016, Amazon became the fastest American company to reach 300,000 workers, hitting that mark in its 20th year as a public company. This figure, which does not include contractors or temporary workers, represents an average employment growth rate of roughly 30% per year. That’s an amazing growth rate.

But Amazon is not alone. In fact, tech giants such as Google, Apple, Facebook and Microsoft are adding jobs as fast or faster than the great job-producing companies of the past, like GM, AT&T, Walmart, IBM, GE, US Steel, and Bethlehem Steel.

Consider this: Twenty years after its 1892 founding, General Electric had 41,000 employees. Google beat that mark in 2012, only 8 years after its 2004 initial public offering.

Read the paper here.

Berg for Washington Monthly: U.S. Poverty Policy Is Outdated and Inefficient. Here’s a Better Approach.

All low-income Americans should be equipped with an Online HOPE (Health, Opportunity, and Personal Empowerment) account.

.S. poverty policy is stuck in a rut. In 2015, 43 million people in America were living in poverty – more than the combined populations of Texas, Pennsylvania, and Nebraska and 11 million more than in 2000.

Slow growth and inequality are the main culprits. But the outdated way we deliver social services – through ponderous, top-down bureaucracies and siloed programs – also hinders efforts by low-income Americans to rise out of poverty.

Economists often apply the term “opportunity costs” to high and middle-income people, meaning that the time they spend on one task is time not available to perform other, potentially more valuable tasks. But society rarely applies the concept to low-income people, acting as if their time is essentially worthless.

While government safety net programs help tens of million Americans avoid starvation, homelessness, and other outcomes even more dreadful than everyday poverty, government anti-poverty aid is generally a major hassle to obtain and keep, supposedly to ensure that only “deserving” people get them. Congress, which creates the laws governing the programs, and most states and localities, which implement those laws, purposely make it extremely difficult to advertise these programs and enable families to access them. That’s why many low-income people are actually unaware of all the government benefits for which they are eligible, thereby reducing the amount of help going to Americans in need by tens of billions of dollars every year. For instance, 17 percent of all people – and 28 percent of working people – eligible for SNAP benefits (formerly called food stamps) fail to receive them.

Continue reading at Washington Monthly. 

Ehrlich for The International Economy: Whom Do Today’s Financial Market Serve

The hunt for culprits after the Wall Street meltdown of 2008 has obscured systemic changes in the way financial markets work today, according to a fascinating new article in The International Economy. Co-written by Ev Ehrlich, a PPI Senior Fellow, and Michael Mann, the article argues that market players increasingly devote their energies to rearranging wealth rather than creating it by efficiently pricing companies and securities. Corrective regulation, they add, should focus not on who is allowed to do what, but on what market actors are allowed to do.

Continue reading below:

[gview file="https://www.progressivepolicy.org/wp-content/uploads/2017/01/Whom-Do-Todays-Financial-Market-Serve.pdf" title="report-fighting-poverty-with-hope"]

Marshall for The Hill: Who’ll stop the REINS?

The 115th Congress is off to a stumbling start. House Republicans impetuously made gutting the Congressional ethics office their first order of business—only to beat a humiliating retreat after the resulting public outcry and rebuke from President-elect Trump. Now, House leaders plan to throw more red meat to conservatives by voting today on a sham regulatory “reform” bill that has negligible Democratic support.

In taking up the REINS (Regulations from the Executive in Need of Scrutiny) Act, House Republicans are showing that they are more interested in riding ideological hobbyhorses than governing. Last time they passed the REINS act, in 2015, it received exactly two Democratic votes.

That’s not surprising, since the bill was intended to unite conservatives in righteous indignation against a supposed flood of “job killing regulations” issued by the Obama administration, not to find common ground with reform-minded Democrats. PPI is hardly alone in believing that improving America’s regulatory climate ought to be a top progressive priority.

Continue reading at The Hill.

How Clinton Lost the Ground Game: A View From the Trenches

By Amory Beldock

I worked on Hillary Clinton’s campaign in what was deemed the most important county in the nation’s biggest battleground: Miami Dade, Florida. I was a cog in the feared Clinton Machine: a vast network of field operations, data gurus, politicos, press pools and finance players spanning all 50 states. It was four years in the making, and on November 8 we were brought to our knees by a populist explosion unforeseen by either party’s most seasoned political forecasters. What did we miss?

The failure of the Clinton Campaign came down to a strategy flawed in both conception and execution. Our singular focus on rebuilding the Obama coalition of minorities and millenials through an overreliance on data analytics failed to mobilize an apathetic voting bloc. It was the fatal combination of identity politics and data obsession that dealt us the final blow, and provides a useful lesson to the post-Clinton left as democrats struggle to rebrand in the age of Trump.

As field organizers we operated under a set of weekly goals laid out by the data team using metrics they projected would lead us to victory. For the men and women calling the shots in Brooklyn HQ, it was strictly a numbers game. A highly competitive environment was fostered between regions and organizers: who made the most calls? Who registered the most voters? Who knocked on the most doors? As one Regional Organizing Director put it: “we are not here to organize communities. We are here to hit numbers to look good for Brooklyn.”

The strategy was mobilization over persuasion. It assumed that Clinton would coast to an easy victory by turning out the broad coalition of Latinos, African Americans, women and millenials that powered Obama’s victories. As it happened, however, the enthusiasm Obama kindled among these voters was not transferable to Clinton. Our campaign simply didn’t give these voters, known as “Rising American Electorate,” sufficient reasons to get excited about our candidate.

Brooklyn’s narrow focus on data was frustrating for the political and field operatives on the ground advocating for more of a human touch. There was no attempt to train organizers how to seek out community leaders, mobilize local organizations or build relationships with the grassroots. We were consistently denied resources to help us build credibility within our neighborhoods. Pleas for offices in African American communities were ignored, as were requests for Spanish language canvass scripts, until the final weeks before election day. Even then, organizers were forced to ask their volunteers to pay for desperately needed materials, even donate the funds to open field offices. None of this mattered to the decision-makers tucked away from the action in their boiler rooms; they had full confidence in their data.

The campaign’s vaunted ground game was built from the top down rather than the ground up. Instead of hiring from the communities we needed to mobilize, staff was imported from around the country, resulting in a disconnect between campaign objectives and the local dynamics of each precinct. For example, organizers with no knowledge of Spanish were placed in low-income Hispanic communities. Similarly, I was repeatedly asked why a white guy from Vermont was in charge of organizing one of Miami’s historic black communities. The campaign’s algorithms were feeding a field staff that operated at a deficit from day one. “Just hit your goals,” they told us, “and we will win.”

Ultimately, the metrics we were pressured to meet were not enough to overcome a very real voter enthusiasm gap. Nor did our statistical goals account for a larger than expected undecided vote, or the unusually high turnout of rural and older voters in northern Florida. When the data failed us, our arrogance in snubbing local outreach to inspire communities to vote came back to haunt us.

Despite historic turnout in South Florida, where we turned out nearly 100,000 more voters for Hillary than Obama won in 2012, Trump swept the state. Consider the results in these six rural counties just a few hundred miles north of Miami. Obama lost Pasco, Hernando, Citrus, Sumter, Pinellas and Levy counties by 38,685 votes in 2012. Hillary lost those same counties to Trump by nearly three times that margin, 120,260 votes (she lost the state by 112,911 votes). Miami proved to be an anomaly, as the rest of the state’s urban centers failed to deliver the votes that reelected the President four years ago. As University of Florida political scientist Daniel Smith wrote, “Her campaign suffered, ultimately, by not being able to persuade independents, and even Democrats, who had unfavorable views of her.”

By the time Florida was called on election night, it was clear this phenomenon had spread north across the traditional swing states and into democratic strongholds. Turnout was down in the diverse major cities of the reliably blue rustbelt states, while the whiter, rural counties turned out unusually strong for Trump. Detroit, Milwaukee and Philadelphia each saw a drop in voter turnout, while each city’s suburbs saw a red spike that put a resounding crack in Clinton’s blue wall.

The campaign predicted we could replicate Obama’s minority vote while besting his performance among white voters. We failed to do both. It appears that the campaign was attempting to make up for the lack of direct constituent outreach in other ways. As the campaign’s national press secretary, Brian Fallon, tweeted in response to criticism, the persuasion element was delivered in the form of emotionally charged TV ads, which came in droves, and a series of soaring speeches designed to position Clinton as a champion of minorities.

Her first major policy speech, delivered in April 2015, addressed the issues of mass incarceration and systemic racism in the criminal justice system. She continually asked white Americans to acknowledge the realities of “white privilege.” In contrast to Sen. Bernie Sanders, she declared that addressing economic inequality would not be enough “to break down the barriers African American families face.”

Contrary to some post-election analysis, Clinton did address the economic insecurity felt by voters across swing states, directly and extensively. The campaign simply didn’t prioritize delivering that message to the right people, essentially writing off the white working class.  Both the election results and exit polls indicate Clinton succeeded in convincing voters that Trump’s insults of women and minorities made him “temperamentally unfit” for the Presidency. But blue-collar whites in pivotal states were simply more concerned about their precarious economic position.

The lessons are twofold. First, while the rapidly increasing minority vote will remain a crucial target for Democrats, they must rebuild their base of white working class voters. Second, it should now be clear that data-driven contacts every two or four years won’t suffice to bind voters to the party’s candidates. The strategy must include engaging these groups at the grassroots level with solutions to the issues that motivate them. Building cross generational support, from millennials to seniors, will be necessary to spark real enthusiasm that translates into votes. Progressive organizations and state parties must partner with local leaders to empower community members, recruit volunteers and build a network that can be activated when it’s time to get out the vote. It is crucial this multifaceted approach of mobilization and persuasion take place during off election years to counter the widely shared belief, particularly in the African American community, that party operatives pop up every four years to drag them to the polls.

A lasting grassroots infrastructure must be built in every county of every state, red and blue, urban and rural. While data remains a valuable asset to modern campaigning, its viability is contingent on a message that energizes voters and enables a ground game capable of building new coalitions rather than replicating those unique to past candidates. Striking this balance will define the success of the Democratic Party in the age of Trump.

Amory Beldock is a Winter Fellow at Progressive Policy Institute and a senior at McGill University’s Honours School of Political Science. He was a Field Organizer with Hillary Clinton’s Florida Coordinated Campaign during the 2016 Presidential election.

Happy Holidays from PPI

in-sample-email

Because of friends and supporters like you, PPI has much to celebrate as we close the books on 2016. Our holiday cheer is somewhat tempered though by the new political realities progressives face following the 2016 elections.

Nonetheless, our New Year’s resolution at PPI is to define a new governing vision for progressives – a hopeful alternative to the backward-looking populism that is rolling over America and the Western world.  Simply hunkering down in opposition isn’t enough; to revive our fortunes we will need new ideas, new leaders and new political coalitions.

Given our history as a force for political change and policy innovation, PPI is once again poised to be a catalyst for progressive renewal. In fact, we made significant progress over the past year in crafting a new agenda for progressive reform.

 Our 2016 highlight reel includes the following:
  • In January, PPI hosted Julie Brill, former commissioner of the U.S. Federal Trade Commission and Bruno Gencarelli, head of unit for data protection, European Commission in Brussels for a conversation on the importance for the E.U. and U.S. to develop rules to govern the economically critical function of transatlantic data transfers.
  • In the spring, we released our major policy blueprint, Unleashing Innovation and Growth: A Progressive Alternative to Populism. This report lays out in detail a new vision for pro-growth progressives.
  • In April, PPI organized a trip with a bipartisan group of 12 senior-level congressional staffers to London and Brussels to engage U.K. and E.U. policymakers and thought leaders on issues vital to the transatlantic relationship.
  • A series of groundbreaking reports on the emergence of a 21st century model for organizing America’s public schools. David Osborne, director of our project onReinventing Public Schools, is hard at work on a book that brings these stories together and will come out in 2017.
  • We convened a group of prominent Mayors at the Democratic Convention in Philadelphia, to launch PPI’s “Going Local,” project, which focuses on the shift of political initiative from Washington to progressive Mayors.
  • At a September Capitol Hill forum, featuring U.S. Commerce Secretary Penny Pritzker, PPI unveiled a report on how small U.S. companies and entrepreneurs are using digital platforms to connect to global consumers.
  • Harvard economist, Joe Aldy, released his PPI proposal “swapping” a carbon tax for regulatory and tax relief as a way to break the energy/climate impasse.
  • In October, PPI opened our Brussels office to anchor our ongoing dialogue with European progressives, and our expanding work with the European Union and member states.
  • PPI Chief Economic Strategist Michael Mandel led several missions to Japan, Latin America and Mexico to highlight the explosive growth of a global “app” development economy and the public policies necessary to support digital innovation.

Building on these activities, PPI is poised to play a key role in developing a new progressive governing platform in 2017.

None of this would be possible without your friendship and support. Thank you and have a happy holiday and New Year!

Sincerely,
Will Marshall
President
PPI

An Educational Revolution in Indianapolis

Our urban school systems struggle because so many of their students live in poverty, but they also struggle because they were designed a hundred years ago, for an industrial society.

In an increasing number of cities, they are being replaced by 21st century systems, in which the central administration does not operate all schools and employ all teachers. Instead, it steers the system but contracts with others to row—to operate many of the schools. The steering body, usually an elected school board and appointed superintendent but sometimes a mayor or appointed board, uses charters and contracts to open schools that meet emerging student needs. If they work, it expands them and replicates them. If they don’t work, it replaces them. Every year, it replaces the worst performers, replicates the best, and develops new models to meet new needs.

The result is continuous improvement. This new formula—autonomy, accountability, diversity of school designs, and parental choice—is simply more effective than the centralized, bureaucratic approach we inherited from the 20th century. Cities that embrace it, by expanding charter schools but also by treating more district schools like charters, are transforming the lives of their students. New Orleans, which has 92 percent of its students in charter schools, is the fastest improving city in America.1 Washington, D.C., with 46 percent in charters, is close on its heels.2 Denver, Memphis, Cleveland, Newark, and Camden, New Jersey, are all moving in the same direction.

 


 

New PPI Report Proposes Utilizing Technologies to Reduce Poverty

Uber, NYC Human Resources Administration, United Way of NYC, and Hunger Free America Join PPI to Promote New Report

NEW YORK CITY—The Progressive Policy Institute (PPI) today was joined by technology, government, and anti-poverty leaders at a public event to release a new report by Hunger Free America CEO Joel Berg, Fighting Poverty with HOPE. The report proposes that federal, state, and local government agencies forge partnerships with the technology industry and nonprofit groups to create online HOPE (Health, Opportunity, and Personal Empowerment) accounts and action plans.

HOPE accounts would combine improved technology, streamlined case management, and coordinated access to multiple to federal, state, city, and nonprofit programs that already exist. The accounts would enable families to use any smart device or computer to learn about the public and philanthropic programs for which they are eligible—including aid to improve health, nutrition, job training and placement, housing, income, etc.—and then apply for all of these programs at once from the convenience of their device, drastically reducing the opportunity costs of low-income Americans seeking social services. Such accounts would also be able to include any private savings that people are able to accrue.

The proposal includes the option of partnering more in depth with government and nonprofit organizations by voluntarily agreeing to long-term HOPE action plans that will provide more aid and then specify exactly how all parties will work together to help the families earn, learn, and save better to ensure greater economic opportunity.

“The only thing low-income people have less of than money, is time,” said Joel Berg. “The new HOPE technology partnership would streamline multiple government and nonprofit safety net programs all into one user-friendly device, allowing low income individuals to fill out one application, rather than wait in line for hours at up multiple government and nonprofit assistance offices. Tangible hope is the world’s most powerful motivator. Surely the Right, the Left, and everyone in between can all agree on making hope a reality again.”

“U.S. social programs too often force low-income Americans to run a bureaucratic gauntlet to get the help they need to climb out of poverty,” said Will Marshall, President of the Progressive Policy Institute. “Joel Berg’s new report for PPI illustrates how we can harness smart phones and the Internet to bring anti-poverty policy into the 21st Century in a way that should appeal to people on both sides of the partisan divide.”

“So many families in New York City that find themselves struggling to make ends meet have at least one working adult,” said Nicole Gallant, Senior Vice President and Chief Impact Officer, United Way of New York City. “It’s our aspiration that this new HOPE technology, will make benefit sign-up easier for these families and thereby increase access and their ability to move along the path to self-sufficiency.”

At today’s event was Steven Banks, Commissioner, NYC Department of Social Services, who demonstrated his support of the report in an effort to decrease poverty in New York City. Also showing his support of the proposed technology plan was Josh Mohrer, the General Manager of Uber NY. Nicole Gallant, Senior Vice President & Chief Impact Officer, United Way of New York City, Will Marshall, President, Progressive Policy Institute, and Natosha Mccray, Food Action Board Member, Hunger Free America also spoke on the panel about the importance of this technology plan to help low-income Americans get out, and stay out, of poverty.

Fighting Poverty with HOPE

Economists often apply the term “opportunity costs” to high and middle-income people, meaning that the time they spend on one task is time not available to perform other, potentially more valuable tasks. But social scientists rarely apply the concept to low-income people, acting as if their time is essentially worthless. Sort of like the spouse who doesn’t count your food shopping, cooking, cleaning, child-rearing, accounting for family finances, shuttling family member to appointments, taking care of your sick parents, etc., as work.

Yet, in addition to lacking money, low-income Americans frequently lack time. Just as many personal relationships collapse when people don’t have “quality time” with each other, a lack of time works mightily against the efforts of lowincome people to have constructive relationships with their families and with the broader society.

 


 

Marshall for The Daily Beast, “What Democrats Can Learn From Hillary Clinton’s Tragedy”

As Democrats debate why they lost the 2016 electionsHillary Clinton must feel like the star-crossed heroine in a Greek tragedy. She beat Donald Trump handily, by a margin of at least 2.6 million votes. Yet even in winning, the fates (and the Electoral College) have cruelly decreed that she lose.

Compounding the sense of tragedy is Trump’s all-too-characteristic reaction to the embarrassment of not being America’s first choice. He told the nation he’d been cheated, an outright lie lifted from the febrile realm of fake news. That the President-elect is willing to undermine public confidence in the integrity of U.S. elections to salve his wounded vanity reinforces Clinton’s argument that he’s unfit for the job he now holds.

She also won that argument, with plenty of assists from her opponent. Exit polls showed 63% of voters agreed Trump lacked the temperament to be President—but a fifth of them voted for him anyway. Evidently, their desire to shake up Washington outweighed their qualms about Trump’s sociopathic personality and total lack of political experience.

Continue reading at The Daily Beast.

The Value of the Medicare Part D Program for its Beneficiaries and the Medicare System

In the United States and other advanced countries, governments and individuals regularly lament the high and ever-rising costs of healthcare; and the ongoing aging of their populations virtually ensures that these costs will continue to increase — perhaps at substantial rates.

Many analysts identify the development and broad use of new healthcare technologies as primary sources of these cost increases; and, in the public debate over rising costs, new prescription drugs are often singled out as critical cost drivers. This study examines the cost-benefit calculus for prescription drugs in the context of Medicare and overall healthcare in the United States.

 

Medicare_Part_D

 

Reforma Tributaria y la Econom’a App: El Ejemplo de Colombia

En los Estados Unidos hemos estado, con mucha razón, obsesionados con el resultado de las elecciones presidenciales. Pero el mundo sigue girando. Por ejemplo, la semana pasada Colombia ratificó un tratado de paz histórico entre el gobierno y el movimiento rebelde. PPI tuvo el privilegio de estar en Bogotá este octubre, donde realizamos un evento sobre la Economía App, el cual fue muy difundido, y describió cómo la Economía App de Colombia ha generado más de 80.000 puestos de trabajo.

Hay que felicitar al presidente de Colombia, Juan Manuel Santos por su éxito. Al mismo tiempo, él ha presentado una importante reforma tributaria que simplifica el sistema de impuestos corporativos mientras que recauda nuevos fondos. No es sorpresa que la medida de reforma tributaria sea controversial. Por ejemplo, las franquicias de la cadena de sandwiches Subway reclaman que el incremento en los impuestos puede terminar con el negocio.

De mayor impacto, la reforma tributaria de Santos afecta directamente al sector digital de Colombia y en particular a la Economía App. Incrementaría el IVA en dispositivos (teléfonos, tablets y computadoras) del 16 al 19% – solo las tablets y las computadoras menos costosas estarían exentas del IVA. La reforma ialzaría el IVA sobre los servicios móviles de datos del 16 al 19% y agregaría un 4% adicional de impuestos al consumo (un total de 23%). Finalmente, la reforma tributaria impondría un IVA sobre todo el contenido y servicios digitales que sean provistos por proveedores de origen extranjero.

Estas medidas tributarias podrían potencialmente restringir la continuación del crecimiento de la Economía App de Colombia, la cual depende de dispositivos asequibles y el banda ancha móvil, y del acceso a apps provenientes de cualquier parte del mundo. Más aún, esto podría afectar negativamente la competitividad en el resto de la economía, ya que la Economía App es mucho más que solo entretenimiento y aplicaciones de juegos. De hecho, se desarrollan y usan aplicaciones por grandes multinacionales, bancos, compañías de medios audiovisuales, tiendas minoristas, y gobiernos.

La importancia a futuro de la Economía App va incluso más lejos. Citamos de nuestra publicación de octubre 2016, «Siguiendo la Economía App de Colombia»:

Uno de los cambios más grandes que se aproximan es el Internet de las Cosas, el cual es el uso de Internet para ayudar a controlar objetos físicos y nuestro entorno físico. Los agricultores usarán cada vez más aplicaciones que ayuden a su producción agricultural, los enfermeros y doctores usarán aplicaciones para administrar el cuidado de los pacientes, y los productores usarán aplicaciones para controlar sus fábricas.

A nivel global, los países exitosos digitalmente como Vietnam y China aplican tasas de IVA relativamente bajas a los datos y servicios móviles para estimular el uso (Vea este informe reciente sobre la inclusión digital y los impuestos sobre el sector móvil).

Finalmente, como hemos mencionado en nuestra publicación de octubre de 2016:

Si los legisladores son serios con respecto a fomentar un ecosistema dinámico para nuevas empresas y la Economía App, entonces continuar con las políticas que apoyen la Economía App será lo que ayudará a Colombia a participar en la revolución móvil global como productor más que como consumidor. Aplicar demasiadas restricciones costosas sobre la Economía App de Colombia podría desviar el crecimiento hacia otro lugares. (énfasis añadido)

Tax Reform and the App Economy: The Example of Colombia

We in the US have been understandably obsessed with the outcome of the presidential election. But the rest of the world keeps moving forward. For example, last week Colombia ratified a historic peace treaty between the government and the rebel movement. PPI was privileged to be in Bogota just this October, where we held a widely publicized App Economy event, describing how Colombia’s App Economy has generated over 80,000 jobs.

Colombia’s President Juan Manuel Santos should be congratulated for his success. At the same time, he has introduced an important tax reform measure that simplifies the corporate tax system, while raising new funds. Not surprisingly, the tax reform measure is controversial. For example, franchises of the Subway sandwich chain are complaining that higher taxes will drive them out of business.

More consequentially, the Santos tax reform takes direct aim at Colombia’s digital sector and App Economy in particular. It would raise the VAT on devices (phones, tablets and computers) from 16 to 19% – only the least expensive tablets and computers would be exempt from the VAT. The tax reform would raise VAT on mobile data services from 16 to 19% and add an additional 4% consumption tax (total of 23%). Finally, the tax reform would charge VAT on all digital content and services provided by suppliers based overseas.

These tax measures could potentially restrict continued growth of Colombia’s App Economy, which depends on affordable devices and mobile broadband, and access to apps from all over the world. Moreover, this could hamper competitiveness in the rest of the economy, since the App Economy is far more than just entertainment and game apps. In fact, apps are developed and used by major multinationals, banks, media companies, retailers, and governments.

The future importance of the App Economy goes even further. We quote from our October 2016 paper “Tracking Colombia’s App Economy:”

One of the biggest changes coming is the Internet of Things, which is the use of the Internet to help control physical devices and our physical environment. Farmers will increasingly use apps to aid their agricultural production, nurses and doctors will use apps to manage patient care, and manufacturers will use apps to control their factories.

Globally, digitally-successful countries such as Vietnam and China apply relatively lower VAT rates to mobile data and services to boost uptake (See this recent report on digital inclusion and mobile sector taxation).

Finally, as we note in our October 2016 paper:

If policymakers are serious about fostering a dynamic startup ecosystem and App Economy, then continuing with the types of policies that facilitate App Economy growth will allow Colombia to participate in the global mobile revolution as a producer rather than a consumer. Putting too many costly restrictions on Colombia’s App Economy could divert the growth elsewhere. (emphasis added)

PPI Leads NewDEAL Panel Discussion on 21st Century Education and Skills

FOR IMMEDIATE RELEASE
December 1, 2016
Contact: Cody Tucker, ctucker@ppionline.org or
202-775-0106

WASHINGTON—The Progressive Policy Institute (PPI) today led a panel discussion at the 2016 NewDEAL Leaders Conference on strategies to ensure that all Americans have the education and skills to succeed in the rapidly changing 21st Century global economy. The panel was moderated by PPI President Will Marshall and featured panelists Harry Holzer, Professor of Public Policy at the McCourt School at Georgetown University, and Bridget Gainer, NewDEAL Leader Cook County Commissioner (Ill.).

Marshall discussed PPI’s Reinventing America’s Schools Project headed by Senior Fellow David Osborne—focusing on how policymakers can innovate and reinvest in education and the importance of reimagining public schools for the knowledge economy, with an emphasis on why reimagined charter schools can and must lead the way.

“The longer students stay at charters, the larger the benefit. By the time a student spends four or more years enrolled in an urban charter school, we can expect their annual academic growth to be 108 days greater in math and 72 days greater in reading per year than their peers in traditional public schools,” said Will Marshall, highlighting the work of David Osborne at PPI. “Since traditional school years last about 180 days, this is equivalent of an extra half-year of learning, every year.”

As Osborne has noted, rising inequality was a major underlying issue in the 2016 Presidential Campaign, yet the candidates avoided the subject of K-12 education and its impact on closing the inequality gap. The gap in standardized test scores between affluent students and the poor has grown at least 49% since the 1960s. The gap in college competition between those whose families make $109K a year or more and those making $34K a year or less has grown to 77%. As education levels largely dictate income levels, the education gap widening and education levels mattering more in the job market have created a vicious cycle. Stanford Professor Sean Reardon says, “As the children of the rich do better in school, and those who do better in school are more likely to become rich. We risk producing an even more unequal and economically polarized society.” Charter schools have started to close these gaps, according to Osborne’s research.

Holzer spoke on the need for new and meaningful postsecondary education or training for working class Americans to find jobs that pay enough to sustain a middle-class life and stressed the role of community colleges—expanding on ideas proposed in his report for PPI, Creating New Pathways into Middle Class Jobs. Gainer spoke about the promising new approaches to apprenticeships that she has been working on in Chicago.

To learn more about PPI’s Reinventing America’s Schools Project visit www.progressivepolicy.org or email Taylor Miller-Freutel at tmillerfreutel@ppionline.org.

###

The Thucydides Trap, Updated

Last year Graham Allison of Harvard wrote an article for the Atlantic entitled “The Thucydides Trap: Are the U.S. and China Headed for War?”  Allison noted that

in 12 of 16 cases over the last 500 years in which there was a rapid shift in the relative power of a rising nation that threatened to displace a ruling state, the result was war.

He goes on to examine the probability of a US-China clash, and points out that

And yet in four of the 16 cases that the Belfer Center team analyzed, similar rivalries did not end in war. If leaders in the United States and China let structural factors drive these two great nations to war, they will not be able to hide behind a cloak of inevitability. Those who don’t learn from past successes and failures to find a better way forward will have no one to blame but themselves.

It’s a great article, and well-worth reading.