Category: Uncategorized

Next-Gen Reactors: How Nuclear Innovation Can Support Growth and a Healthy Climate

Posted on by The Progressive Policy Institute

The U.S. Supreme Court has put President Obama’s Clean Power Plan on hold while lower courts review challenges to the regulation. The ruling is a setback to Obama’s hopes of bypassing a hostile Republican majority in Congress and using his executive authority to require electric utilities to make big reductions in carbon emissions.

At last year’s Paris climate summit, the administration pledged to make deep cuts in U.S. greenhouse gas emissions by 2025. With the Clean Power Plan (CPP) in limbo, Washington has no plausible mechanism for getting anywhere near those goals.

In truth, however, the United States would fall well short of those goals even if the CPP survives legal challenges. For one thing, the rule covers the power sector, which accounts for only about 31 percent of U.S. emissions. What’s more, the United States will have to put carbon reductions into overdrive, roughly doubling their current pace, to meet the administration’s ambitious commitments in Paris.

Rather than put all of its climate protection eggs in the CPP basket, the White House clearly needs a broader strategy for making sure that America can do its part to slow down global warming. A key component of such a strategy must be expanding America’s biggest source of zero-carbon energy: nuclear power.

Download “2016.05-Freeman-Marshall_Next-Gen-Reactors_How-Nuclear-Innovation-Can-Support-Growth-and-a-Healthy-Climate”

*Note: A previous version omitted a citation to Dr. Ashley Finan’s testimony. We regret this error.

Market Realist: What’s behind the US Economy’s Remarkable Labor Market Strength

Posted on by The Progressive Policy Institute

Rick Rieder cites a PPI report in this piece about the recent growth of the United States economy.

Technology (IGM) is not only one of the fastest-growing industries. It has also created millions of jobs. It’s an important enabler of innovative product development. For example, technology has led to the emergence of the new app economy, creating new jobs. A recent report from the Washington, DC, based Progressive Policy Institute said that the United States had 1.7 million app economy jobs in 2015—up from 750,000 in 2013.”

Read the article in its entirety at Market Realist.

The Productivity Growth Slump and The Case of the (Missing) Contact Lens

Posted on by The Progressive Policy Institute

Productivity growth in the United States continues to slump.  The latest numbers from the BLS show that multifactor productivity growth was only a tiny 0.2% in 2015.

In particular, gross medical productivity of the US healthcare system fell by 1.2% in 2015, according to PPI’s calculations.* That’s after two years of ticking up slightly.

Falling gross medical productivity implies that healthcare employment is increasing faster than the population, even after adjusting for the changing age mix. That’s not fiscally or economically sustainable over the long run, because it means that healthcare is absorbing more and more of the workforce, and leaving less for other productive activities.

Is this negative productivity trend going to continue? The good news is that innovation in pharma, medical devices, and apps has the potential for reducing the amount of excess labor costs in the healthcare system (see, for example, “The Folly of Targeting Big Pharma,” WSJ, December 10, 2015).

The bad news is that some groups of medical providers are looking to retain or even extend inefficient and costly practices by fighting back against new technologies and online delivery systems. For example, the trade group for optometrists recently filed what they called an “expansive” FDA complaint against a vision-texting app. This app would cut costs and save labor by letting people test their vision at home and send the data to a licensed ophthalmologist for a prescription.  Similarly, the optometrists also support a new bill in the Senate that would make it harder and more expensive for consumers to use valid prescriptions to buy their contact lens online, even at a time when more and more shopping is done via the Internet.**

The U.S. needs to embrace productivity growth in the healthcare sector if overall productivity and living standards are to rise for everyone. Hopefully 2015 will turn out to be a blip rather than a trend.

*Gross medical productivity is defined to be the age-adjusted population, divided by the number of workers in the broad healthcare sector, and benchmarked to 2009=100. The population is adjusted for the relative cost of health care at different ages. The broad healthcare sector includes private and public hospitals, ambulatory care facilities, nursing homes, pharma and medical device manufacturers, biotech companies, and health insurers.

Gross medical productivity is an easy-to-calculate measure of how well the health care system is using labor resources to treat the potential patient population. Labor is important because it accounts for a large share of the cost of health care. We use age-adjusted population as the numerator because any of us—no matter how healthy—can become an involuntary consumer of healthcare at any moment.

** PPI first wrote about this issue in 2001, in a policy paper entitled “The Revenge of the Disintermediated: How the Middleman is Fighting E-Commerce and Hurting the Consumer.”

Money and Schools: Debating Ben Spielberg 50 Years After the Coleman Report

Posted on by The Progressive Policy Institute

Is “more money” a vital education policy, when compared with other possible changes? Should taxpayers allocate significantly more money to existing K-12 public schools, without demanding structural reforms? On average, if existing K-12 public schools had more money, would students obtain significant or sustainable benefits?

Increasingly, conventional wisdom answers “yes:” many say that money alone, even without reform, helps students. Matt Barnum, policy editor of education website The 74 Million, posted in April: “At this point there’s a large body of evidence that more $ leads to better outcomes,” linking to a February summary of recent case study research. Nick Albares, a policy analyst with the Center on Budget and Policy Priorities, wrote in January’s Education Post: “common sense and research suggests [that] money matters for long-term outcomes.” In response to my 2015 column contrain Dropout Nation, the analyst Ben Spielberg wrote a sharp dispute.

In the spirit of the Education Post mantra of “better conversation, better education,” Spielberg and I dedicated several hours researching each other’s claims and meeting in person to develop a common fact base and framework. This column represents my reflections on that effort.

Continue reading at Education Post. 

A 21st Century School System in the Mile High City

Posted on by The Progressive Policy Institute

Some of the most dramatic gains in urban education have come from school districts using what many call a “portfolio strategy.” Others call it “reinvention,” a “21st century approach,” or “relinquishment.” By whatever name, it generally means that districts negotiate performance agreements with some mix of traditional, charter, and hybrid public schools, allow them great autonomy, let them handcraft their schools to fit the needs of their students, give parents their choice of schools, replicate successful schools, and replace failing schools.

Many doubt such a strategy is possible with an elected board, because closing schools and laying off teachers triggers such fierce resistance. Most cities pursuing the portfolio strategy—such as New Orleans, Washington, D.C., and Camden, N.J.—have done so with insulation from local electoral politics. In New Orleans, the state board of education and its Recovery School District (RSD) oversee most of the schools; in D.C., Congress intervened, creating an appointed Public Charter School Board; and, in Camden, the state took over the district.

All of which explains why reformers are paying close attention to Denver, Colorado. With an elected board, Denver Public Schools (DPS) has embraced charter schools and created “innovation schools,” which it treats somewhat like charters. Since 2005 it has closed or replaced 48 schools and opened more than 70, the majority of them charters. In 2010 DPS signed a Collaboration
Compact with charter leaders committing to equitable funding and a common enrollment system for charters and traditional schools, plus replication of the most effective schools—whether charter or traditional.

Download “2016.05-Osborne_A-21st-Century-School-System-in-the-Mile-High-City”

 

CNNMoney: The economy needs a Cheerleader-in-Chief

Posted on by The Progressive Policy Institute

PPI President Will Marshall was quoted in an article on economic despair from CNNMoney‘s Steven A. Holmes.

In a recent AP poll, 54% of respondents described the economy as “poor.” In a new CNNMoney/E*Trade survey, a majority graded the economy as a “C” — or worse. In Gallup’s weekly survey, 60% of Americans said the economy was “getting worse,” the poorest rating given this year, and the worse since last August.

“The nation seems to be wallowing in a degree of economic pessimism,” said Will Marshall, president of the Progressive Policy Institute, a Democratic think tank.”

Continue the article at CNNMoney.

The Washington Post: Why Trump and Clinton should name their entire Cabinets right now

Posted on by The Progressive Policy Institute

Now that Sen. Ted Cruz of Texas has announced Carly Fiorina as his vice presidential pick — an unusual move for a presidential candidate trailing in the polls and weeks out from his party’s convention — speculation will inevitably follow about who front-runners Hillary Clinton and Donald Trump might select as running mates. Not only should they follow Cruz’s lead, they should go a step further and, well before Election Day, publicly name the individuals they’d appoint as Cabinet members.

That Cruz’s approach isn’t already the norm is a weakness in the way we choose our chief executive.

The American public deserves to have at least a sense, before ballots are cast, of those who would hold the most powerful positions within the next administration. This is particularly true for the departments of State, Treasury, Defense and Justice, whose leaders are invested with authority over many of the core activities of the country — everything from negotiating treaties to overseeing federal criminal investigations at the highest level.

But not just the big four: the secretary of Health and Human Services oversees the single-largest slice of total federal spending; and the need for a competent and experienced secretary of Homeland Security is self-evident in an era when border security and the threat of terrorism weigh on citizens’ minds. Even the seemingly smaller Cabinet portfolios can wield influence over major areas of public policy, including Energy, Transportation and Labor. And all Cabinet members, by statute, are in the line of succession to the presidency.

Continue reading at The Washington Post.

U.S. News: The Unpopular Winners

Posted on by The Progressive Policy Institute

PPI President Will Marshall was quoted in a piece from U.S. News & World Report on the unpopularity of both Hillary Clinton and Donald Trump.

Clinton has a golden resume in conventional terms, having served as secretary of state, U.S. senator from New York and first lady when her husband Bill was president. She is intelligent, tough and level-headed, and knows how government works. But she doesn’t inspire much passion even among Democrats. However, Will Marshall, leader of the Progressive Policy Institute, told me, “Her emphasis on experience and steady leadership could be shown best against someone as volatile and unpredictable as Donald Trump.”

Continue the article at U.S. News.

The Daily Beast – Clinton’s Key: Never Mind the Bernie Bros, Here Come the Swing Voters

Posted on by The Progressive Policy Institute

The nominating contest grinds on, but the Acela primary set the stage for a general election faceoff between Hillary Clinton and Donald Trump.

Trump’s solid majorities mean that GOP voters, in their inscrutable wisdom, have spoken, choosing a political neophyte who’s never held any public office, has no discernable governing philosophy, and whose campaign consists mainly of bigoted outbursts and vicious personal attacks on anyone who gets in his way.

In contrast, the Democratic center seems to have held. Bernie Sanders’ call for an anti-capitalist “revolution” enthralled millenials, but his dream of turning America into a European-style welfare state—a colossal Denmark—struck out with black and Latino voters, and with women, who preferred the pragmatic Clinton.

What’s more, Clinton now has a cause that can galvanize a campaign that’s been criticized for lacking passion and inspiration—saving America from Donald Trump. Although some diehard Bernie Bros may decide to sit out the November election, she should have little difficulty uniting her party around the goal of keeping the billionaire bully out of the White House.

Continue reading at the Daily Beast.

Brexit, Fintech, and the App Economy

Posted on by The Progressive Policy Institute

It is not our place to offer UK voters any suggestions for their Brexit vote, scheduled for June 23. Moreover, we see no reason to duplicate George Osborne’s widely-discussed analysis of the economic impacts of a vote for leaving the European Union.

Rather, we simply want to give our assessment of the United Kingdom’s current economic situation and prospects, assuming that the country stays in the EU. Start with the bad news. The UK is suffering from a severe productivity slowdown, which is dragging down growth and real incomes. But it’s not purely a UK problem—the same slowdown is hitting the U.S. as well continental Europe.

But the good news is that the UK is about to take advantage of its key position in the global economy.

The UK is the country best poised to take advantage of the reforms in the global tax system. The country is in the midst of lowering its corporate tax rate to 17% as of 2020, and has put into place a “patent box” that will attract research and development activity from higher-tax countries such as the U.S. and Germany. What’s more, the BEPS reforms from the OECD make it more difficult for multinationals to seek out tax havens without actually moving workers into those countries. As a result, the low-tax UK—with its network of connections to the rest of the world and attractiveness to skilled workers—will be increasingly appealing to global companies.

At the same time, the UK is establishing itself as a tech powerhouse. The information and communications sector now in the UK accounts for 4% of total jobs. That’s higher than the comparable 3.2% figure in the US.

Moreover, the UK has 321,000 App Economy jobs, first in the EU by a wide margin, according to PPI research. The UK also has  178,000 jobs in the Fintech Economy (these figures include a conservative estimate of spillover effects). London leads all EU cities with 136,000 App Economy jobs, way ahead of second place Paris. The city also has 109,000 Fintech Economy jobs, somewhat ahead of New York City and way ahead of Silicon Valley (based on our update of 2014 research).*

Currently the UK is benefiting from its dual status. On the one hand it is part of the European Union, giving it access to the continent’s markets and skilled workers. On the other hand, its historical ties to the US makes it the logical landing place for US multinationals. These economic advantages are not to be given up lightly.

As the world becomes more connected and our shared economic prosperity is related to global scale, investment from the US, Asia and other strong economic players need a friendly home inside the EU.  The UK is winning that race by a long mile–why would they quit now?

*This figure includes spillover jobs, making it not directly comparable to our 2014 figure for fintech jobs in London).

St. Louis Post-Dispatch: Need for high-tech workers is critical

Posted on by The Progressive Policy Institute

A PPI report on the growth of the tech economy was referenced in this piece from the St. Louis Post-Dispatch.

Thanks to growing companies like Citi, Enterprise, NISC, ESRI, Curas, BoardPaq and many others, St. Charles County is a strong part of the ‘Silicon Prairie’ in metro St. Louis and the Midwest,” Ehlmann said. “There are tremendous opportunities right now and for the foreseeable future for our residents to pursue lucrative careers in information technology or to pursue an entrepreneurial dream in IT.”

The Progressive Policy Institute ranked St. Charles County “one of America’s top 25 tech counties” in a 2015 report on high-tech job growth.”

Read the entirety of the article at the St. Louis Post-Dispatch.

Politico: Purple Reign?

Posted on by The Progressive Policy Institute

A PPI survey was one of the topics of discussion in Politico’s Morning Trade.

Veteran Democratic pollster Peter Brodnitz says there’s a big misconception about how voters view trade, noting a new Progressive Policy Institute poll that shows 65 percent of swing voters in four battleground states think manufacturing jobs have been lost to cheap labor competition overseas, not bad trade deals.

“There’s a very big difference between the perception of where the electorate is [on trade] and where the electorate actually is,” Brodnitz said. He added that respondents favored trade deals with strong labor and environmental standards.”

Read the rest of the article at Politico.

The EU’s War on Google…and Itself

Posted on by The Progressive Policy Institute

On April 19, the head of the European Commission, Jean-Claude Juncker, admitted that the EU was “wrong to over-regulate and interfere too much.” Ironically, the very next day, the Commission’s office of competition issued a sweeping antitrust cased against Google. The complaint, filed by EU competition chief Margrethe Vestager, accused the search giant, among other items, of

requiring manufacturers to pre-install Google Search and Google’s Chrome browser and requiring them to set Google Search as default search service on their devices,  as a condition to license certain Google proprietary apps

The commission justified its case by saying that

this conduct ultimately harms consumers because they are not given as wide a choice as possible and because it stifles innovation.

I’m not an antitrust lawyer, so I’m not going to judge whether Vestager was right to bring this case under European law, or what her chances of winning are. But as an economist, this case is totally perverse. The likely impact if the EU wins its case: Higher prices for European consumers and small businesses, and slower innovation in areas such as the Internet of Things, where Europe has a potential competitive advantage.

Consider the current situation. Google spends enormous sums of money developing and upgrading its mobile operating system and apps, which are acknowledged as top quality. All of this intangible capital embodied in Android is effectively available, for free, to handset manufacturers, European consumers, app developers and small businesses, to use as they would.

From an economic perspective, it’s hard to beat free. In other words, the European economy, consumers, and workers get the full benefit of Google’s R&D spending on Android, without having to utilize scarce resources.  This has the benefit of spurring competition, app creation and smartphone use within Europe, and allowing the EU to keep up with the United States. Indeed, recent PPI research shows that Europe has 1.64 million App Economy jobs as of January 2016, almost as many as the United States. (PPI link)

Especially helped by Android are low-income consumers across the EU, who get a wide choice of inexpensive phones, if they want, with access to the full variety of Android apps. Indeed, the very market dominance that the complaint cites is the result of the success of Android in opening up the lower end of the smartphone market.  Fragmentation of the market will only have the effect of increasing prices in Europe, as manufacturers lose economies of scale.

Indeed, winning the case against Google is likely to divert Europe’s R&D spending, already lagging the US, away from innovation in the manufacturing/Internet of Things sector, where Europe can potentially take advantage of its strong manufacturing base to set new global standards. In that sense, this antitrust suit is at best a distraction, at worst a hindrance, to European long-term growth and job creation.

PPI Poll: Swing Voters In Swing States Hold Balance In 2016

Posted on by The Progressive Policy Institute

In this era of political polarization, it is tempting to assume the political center no longer exists. If this were true, it would certainly simplify things for political candidates and their strategists. They could stop worrying about how to persuade unaligned voters and concentrate exclusively on mobilizing their core partisans. However, this is not the case. As this new Progressive Policy Institute (PPI) poll by veteran Democratic pollster Peter Brodnitz shows, Swing voters exist, and they hold the balance of power in key 2016 battleground states. For Democrats especially, this survey yields a clear lesson: To hold the White House, recapture the Senate, and reduce the Republican House majority, candidates must craft messages that appeal beyond the party’s base to a substantial body of voters who are not in a fixed ideological camp.

This survey examined the outlook and attitudes of Swing voters in four critical Swing states: Florida, Ohio, Colorado, and Nevada. Constituting about a fifth of the electorate in those states, Swing voters come at today’s major challenges with a perspective different from that of either party. In general, they are less ideological, less partisan, and less angry than base voters. They are pragmatists who are focused mainly on economic growth and competitiveness.

Swing voters give low approval ratings to both parties in Congress, but slightly higher approval ratings to Democrats (32% approve, 59% disapprove), than to Republicans (28% approve, 65% disapprove). While Republicans give their own Members of Congress better marks than Democrats, Republicans in Congress are underwater among their own voters by eleven points (43% approve, 54% disapprove). Democrats, on the other hand, largely approve of the jobs their Members of Congress are doing (73% approve, 24% disapprove).

There is widespread agreement among battleground voters on a number of matters:

  • Most battleground voters rate the economy as fair or poor as opposed to excellent or good. They believe that improving the economy should be the priority, that moving jobs overseas is a key economic problem, and that increasing access to education and job training is essential.
  • Most of them also believe that America’s economy is still strong, and that if people work hard, they can get ahead.
  • Almost all believe it is essential that American companies can compete globally and that workers benefit from that competition and success.
  • While Democrats are the most likely to believe the United States is the strongest economic power in the world (81% agree), most Swing voters (58% agree) and Republicans (61%) hold this view.
  • Despite all the populist rhetoric deployed in both parties’ nominating contests, the voters we interviewed don’t seem particularly angry. Swing voters tend to be worried about the economy and Democrats tend to be optimistic, but few described themselves as angry.

Most believe global competition – more than trade agreements – is the force driving away jobs. There is little support among Swing voters for ending trade agreements, and most believe the benefits of trade agreements outweigh the costs.

  • Almost all believe “most” Americans are not prepared for retirement.
  • Almost all believe increased investments in infrastructure, like roads and bridges, would improve the U.S. economy.

In general, Swing voters are attracted to new ideas for stimulating growth — regulatory improvement, low corporate taxes intended to increase competitiveness and keep jobs from moving overseas, and a robust career pathways system that’s always there to help workers acquire marketable skills.

 

Download “2016.04-PPI-Poll_Swing-Voters-in-Swing-States.pdf”

Financial Times: White House Countdown – Toilet talk

Posted on by The Progressive Policy Institute

The Financial Times referenced a PPI survey in an article about the American presidential primaries.

As the campaigns inch towards the general election, new polling suggests that the eventual Republican and Democratic nominees will have to perform some nimble adjustments to their policy messages if they are to successfully lure swing voters, my colleague Sam Fleming reports.

In interviews with swing voters in the four big swing states, Florida, Ohio, Colorado and Nevada, Peter Brodnitz, a Democratic pollster for the Progressive Policy Institute, found that despite the populist rhetoric, voters did not seem particularly angry about the economy. Worried, yes. Angry, no.”

Continue the article at The Financial Times.

McClatchy: Who will win over the voters who aren’t angry?

Posted on by The Progressive Policy Institute

A recent poll conducted by the PPI was cited in this McClatchy article on swing voters in the upcoming election.

Swing voters aren’t angry. But they’re tired of nasty, strident partisan rhetoric, and they don’t believe the economy is rigged against them.

Those are among the findings of a survey of swing voters in four states that are expected to be crucial to winning the November presidential election: Florida, Colorado, Nevada and Ohio.

The survey, conducted by Democratic pollster Peter Brodnitz for the Progressive Policy Institute, a center-left group that develops pro-growth ideas, illustrates how centrists crucial to a White House victory are not the voices being spotlighted throughout the primary season.”

Read the full article at McClatchy.