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FDA Finds the Right Note in Mobile Medical Apps

Posted on by The Progressive Policy Institute

I’ve been critical of the FDA in the past. But now that the FDA has released its long-awaited guidance for “Mobile Medical Applications,”  I’m pleasantly surprised at the stance the agency has taken. Basically, the FDA has done exactly what it should do–gotten out of the way of innovation, while reserving the right to jump back in if circumstances warrant.

To put it a different way,  rather than being annoyingly ambiguous, the FDA has marked a big section of the beach and said “go play in the water, kiddies! Have fun, and we’ll be watching to make sure that no one drowns.” This is the right approach to maximizing both progress and safety. In fact, other regulators should follow the same path.

The issue when it came to mobile medical apps was in some sense simple. Clearly some mobile apps worked just like regulated devices, and therefore needed to come under the same scrutiny. No one disagreed with that. But then there was a whole set of other apps–including ones that provide simple coaching and prompting to diabetics and other people who needed to follow regular schedules–which could have been regulated as medical devices under a strict interpretation of the rules.

But in the guidance, the FDA was extremely clear that it would exercise “enforcement discretion” for these sorts of medical apps. The agency was even kind enough to give a long list of such apps, opening up a clear pathway for innovators. Some examples:

  • “Apps that provide simple tools for patients with specific conditions or chronic disease (e.g., obesity, anorexia, arthritis, diabetes, heart disease) to log, track, or trend their events or measurements (e.g., blood pressure measurements, drug intake times, diet, daily routine or emotional state) and share this information with their health care provider as part of a disease-management plan.”
  • “Apps specifically intended for medical uses that utilize the mobile device’s builtin camera or a connected camera for purposes of documenting or transmitting pictures (e.g., photos of a patient’s skin lesions or wounds) to supplement or augment what would otherwise be a verbal description in a consultation between healthcare providers or between healthcare providers and patients/caregivers.”
  • “Mobile apps that help asthmatics track inhaler usage, asthma episodes experienced, location of user at the time of an attack, or environmental triggers of asthma attacks;”

And so forth and so on. You get the idea.

Other regulatory agencies should adopt the same tack. In a world of rapid innovation, regulators cannot and should not engage in pre-emptive regulation. Instead, they should stand back and watch closely, stepping in as necessary. That’s the best way to insure the

 

 

 

 

 

Can the Internet of Everything Help Cities?

Posted on by The Progressive Policy Institute

Local governments are about delivering services and getting things done: Fixing highways, running buses, picking up trash, ensuring public safety, educating children. To do their job in an era of tight finances, what’s needed are technologies that make public services better and cheaper, and improve the quality of life for urban Americans without increasing costs.

So far the Internet and the shift to digital has boosted the efficiency of smart local governments, increased transparency, and made it easier to communicate with local residents. In many cities and towns it’s possible to look up property tax records online, for example; download essential forms and documents; or learn when the town dump is open. New York City is a leader in this area: its “OpenData” catalog contains more than one thousand data sets available to the public.

But the mere upload and download of data is not enough to get cities and towns out of their fiscal squeeze. That’s why, if we want to truly transform the delivery of public services, we need to look to the coming wave known as the  “Internet of Everything.”

What is the “Internet of Everything?” As I write in my new report, the Internet of Everything (IoE) is about:

…building up a new infrastructure that combines ubiquitous sensors and wireless connectivity in order to greatly expand the data collected about physical and economic activities; expanding ‘big data’ processing capabilities to make sense of all that new data; providing better ways for people to access that data in real-time; and creating new frameworks for real-time collaboration both within and across organizations.

In other words, IoE links things in the physical world with data, people, and processes, so that better decisions can be made in real-time.

On a national level, IoE can provide a tremendous boost to growth. We estimate that the Internet of Everything could raise the level of U.S. gross domestic product by 2%-5% by 2025. If this gain from the IoE is realized, it would boost the annual U.S. GDP growth rate by 0.2-0.4 percentage points over this period, bringing growth closer to 3% per year.

Part of these gains from the Internet of Everything would show up in the form of better and cheaper services provided by local governments. The key here is better decisions in real-time. One clear example comes out of the horrific flooding in Colorado. Having been hit by a devastating flood in 1997, the city of Fort Collins, CO, maintains a network of rainfall gauges and stream sensors which deliver real-time information on the potential for flooding both to a city website and to smartphones via an app. This connection with real time sensors enables both city officials and local residents to make better real-time decisions about when and whether to evacuate.

Cities can also use the Internet of Everything to help improve the mundane service of trash pickups. As my report notes:

The ‘smart’ trash and recycling stations from BigBelly Solar can sense how full or empty they are, and communicate wirelessly with the trash collection agency. Armed with this information, pickup trucks can go directly to the bins that are full, while skipping trash and recycling stations that are empty. The result: Cleaner streets, lower fuel usage, and fewer greenhouse gas emissions.

An essential service that is usually handled at the local level is transportation. Already more and more cities are using GPS systems to track buses and provide the information to passengers via apps. The next stage is to provide sensors that monitor waiting passengers, with the possibility of rerouting buses or having them skip stops in order to provide better service.

Or consider noise complaints, one of the most pervasive problems of big city living.  Noise can often be intermittent, making it very hard for local governments to adequately respond. However, smartphones are able to measure local noise levels, making it possible to build ‘noise complaint apps.’ Alternatively, low-cost sound sensors could help track troublesome noises in real time.

Finally, there is the most crucial local service of them all, education. Let’s focus on career/technical education. Businesses continue to complain about not getting enough skilled workers, but schools have been cutting back on CTE. Moreover, what they do offer is less directly relevant to today’s rapidly changing workplace, because it’s too expensive for most school districts—and CTE teachers–to keep up to date.

The Internet of Everything offers the possibility of lowering the cost of career/technical education by building sensors right into the equipment, which can offer immediate feedback to students. One offbeat example comes from Cisco, which built sensors into a basketball. In theory, that means someone trying to learn to play the game can automatically get corrections about how to shoot the basketball, enabling them to learn faster. The same principle can eventually be applied to career/technical education, lowering costs and speeding learning.

City officials face a historic challenge, and a historic opportunity.  With less resources, can they provide better services at lower cost? The Internet of Everything is no panacea, but it can assuredly help.

Continue reading at Techonomy.

The New Politics of Production: A Progressive High-Growth Strategy

Posted on by The Progressive Policy Institute
Will Marshall’s piece, excerpted here, was part of the Policy Network’s recent publication “Progressive Politics after the Crash: Governing from the Left.”

The US is struggling to find a way out of overlapping economic crises. One is cyclical: a painfully slow, jobless recovery from a recession magnified by the 2008 financial crash. The other is structural: US economic output and job growth have fallen well off the pace of previous decades. Although liberal commentators seem preoccupied with rising inequality, America’s fundamental economic problem is slow growth.

Even before the recession struck, the once-mighty American job machine was sputtering. Between 2000 and 2007, the US posted its worst job creation record in any decade since the Great Depression. Not only have many good jobs vanished, but also real wages have fallen or turned stagnant for all but the top US earners.

Overall economic growth has been declining steadily since the halcyon years after World War II, when the babies boomed and GDP grew at a robust average of 4 per cent per year. National output fell to 3 per cent during the 1970s and 1980s, before picking up in the late 1990s. Since 2000, the economy has downshifted again, averaging under 2 per cent growth per year. Research from the Kauffman Foundation also suggests a loss of entrepreneurial verve. The number of business start-ups, which Kauffman says generate most of US net job growth, has plummeted by about a quarter since 2006.

If there is a bright spot in the US economy, it is the rebound of corporate profits and stock prices since 2009. Yet these gains also highlight a stark inequity: returns to capital are up, but returns to labour are down.

In President Kennedy’s day, US prosperity really did lift all boats. Today, however, productivity gains do not automatically translate into higher pay for workers, especially people with middling skills. ‘This is America’s largest economic challenge’, says the economist Robert J.  Shapiro. ‘People can no longer depend on rising wages and salaries when the economy expands.’

Amid such dismal conditions, Obama’s re-election by a comfortable margin (5 million votes) was an astounding political feat. Despite Republican challenger Mitt Romney’s claims that Obama fumbled the recovery, swing voters credited the president with having prevented the economy from capsizing during the perfect storm of 2008–9. It helped too that Romney offered no theory of his own for rekindling growth beyond hackneyed calls for lower taxes and regulation.

Unfortunately, little has happened since Obama’s victory to dispel the pall of economic pessimism that hangs over America. A late spring poll, for example, found that nearly 60 per cent of Americans worry about ‘falling out of (their) current economic class over the next few years’. No doubt subpar job growth is chiefly responsible for such unwonted gloom. According to preliminary figures, the number of people with jobs grew by only 28,000 (0.02 per cent) during Obama’s first term.

And there is little relief in sight. The Congressional Budget Office forecasts weak GDP growth and abnormally high unemployment persisting to the end of Obama’s second term. America is stuck in a slow-growth rut. While liberal Keynesians are calling for more shortterm spending to kick-start the pace of recovery, what progressives really need is a bolder plan for overcoming structural impediments to more robust growth.

Instead of devising one, Obama is bogged down in Washington’s endless trench warfare over taxes, spending and debt. True, the president won a tactical victory in averting the ‘fiscal cliff ’ and forcing Republicans to swallow higher tax rates on wealthy households. Yet this modest blow for tax fairness did little to fix the nation’s debt or stimulate growth. In fact, distributional politics distracts progressives from a truly historic opportunity to lay new foundations for US prosperity in the twenty-first century.

To inspire hope for such a change, the US president must broaden his message from fairness to growth: he must put America back on a highgrowth path. By setting audacious goals – say, doubling the growth rate and halving unemployment by the end of his second term – Obama
would convey the requisite sense of national urgency

A clarion call for renewed growth would create political space for progressive initiatives – public investments in training and education, broad tax reform – intended to spread economic gains more widely. And, by fanning hopes for a reversal of America’s economic decline, such a call could help Democrats make inroads among white working-class voters.

These voters, once the backbone of Democrats’ New Deal–Great Society coalition, have since defected en masse to the Republican camp. A conscious campaign to start winning them back, while retaining the Democrats’ strong advantages with young and minority voters, is the key to building a durable progressive majority and ending the 50:50 polarisation that has paralysed Washington.

Read the entire piece by Will Marshall.

USA Today: Is Business Investment Gap Stalling Recovery?

Posted on by The Progressive Policy Institute

USA Today covered PPI’s new report “U.S. Investment Heroes: The Companies Betting on America’s Future”and quoted PPI’s Michael Mandel and Diana Carew in a story on lagging U.S. private investment:

Five years after the crisis, the “investment gap” that Alcoa exemplifies stands as one of the most enduring and disabling legacies of the Great Recession. Companies have held off on spending as much as $2.2 trillion since 2008, estimates the Progressive Policy Institute in a new report — more than $500 billion just last year. That’s translating into lower productivity growth, slower economic growth — and fewer new jobs.

“When workers have older and less equipment, they produce less,” PPI Chief Economic Strategist Michael Mandel said. “It’s a very simple connection.”

“Investment is the foundation of growth,” said PPI economist Diana Carew. “With more investment, everything we think is lackluster now would see bigger gains.”

Read the entire article here.

Textiles and apparel are not “thriving”: Why the U.S Still Needs A Production Economy

Posted on by The Progressive Policy Institute

The NYT just ran a story entitled “U.S. Textile Plants Return, With Floors Largely Empty of People.”  You might read that story and think, hey, the U.S. has no production problem. But I will show you here that the story left out important statistics which demonstrate that there has been no significant recovery  in textile and apparel production whatsoever in recent years.  The implication: If production did rebound, we could produce significant good jobs in these industries even with robotics.

The story was relentlessly upbeat about the return of domestic textile and apparel production, as contained in the following line (my emphasis):

the fact that these industries are thriving again after almost being left for dead is indicative of a broader reassessment by American companies about manufacturing in the United States.

Thriving, huh? Here are four  facts you might find interesting:

  • Domestic apparel production today is lower than it was in 2009, at the depths of the recession.
  • Compared to 2007, domestic apparel production is down about 50%
  • Domestic textile mill production today is 5.5% lower than it was a year ago.
  • Compared to 2007, domestic textile mill production is down about 25%.

And for those of you who are gluttons for punishment, here are the charts of  apparel production, textile mill production, and textile product production  (drawn from Federal Reserve data). The bottom line–there is no sign of a production rebound or recovery in any of these industries, robots or no.

Now, there’s a lot of questions we could ask here. Did the NYT editors and reporters know these numbers, and just decided to not put them in because they fought the story? And what about wage and productivity stats for these industries, or even import statistics to put some context on the one upbeat number about textile and apparel exports? Here’s what the story said:

In 2012, textile and apparel exports were $22.7 billion, up 37 percent from just three years earlier.

Here’s what the story didn’t say: The trade deficit in textiles and exports was wider in 2012 ($92.7 billion) than 2007 ($91.2 billion).  Exports rose, but imports rose more.

The fact is, if the story is right and U.S. firms are cost competitive with Chinese firms, then there’s plenty of room to expand production in U.S and create jobs. This mainly requires investment,which ties into the recent PPI Investment Heroes paper. It also may require new technology to dramatically change the whole business model, including 3D printing and aspects of the Internet of Eveything.

 

 

 

 

 

 

 

Wall Street Journal: 25 Companies Still Betting Big on America

Posted on by The Progressive Policy Institute

The Wall Street Journal blog picked up PPI’s latest report “U.S. Investment Heroes: The Companies Betting on America’s Future”:

Anybody following news on the U.S. economy has heard it over and again: Unemployment is persistently high, consumer spending alone can’t lift the economy, corporations have built up enormous cash stockpiles, and those stockpiles need to start getting invested at home for the situation to improve.

But who is actually doing the investing, right now? A new report out today from the Progressive Policy Institute looks at the levels of U.S. capital expenditures reported by public companies, and singled out the biggest spenders – “Investment Heroes”, it calls them.

Read the complete story here.

Who are the U.S. Investment Heroes of 2013?

Posted on by The Progressive Policy Institute

In our newest report, “U.S. Investment Heroes of 2013: The Companies Betting on America’s Future,” we highlight the top U.S. Investment Heroes of 2013, as ranked by their U.S. investment.

PPI’s ranking of U.S. Investment Heroes for 2013 is led by AT&T, which invested almost $20 billion in the U.S. in 2012. The top five are rounded out by Verizon, Exxon, Chevron, and Intel, and together these five companies invested over $66 billion in the U.S. during the last year.* Total U.S. investment by the top 25 companies amounted to almost $150 billion last year, spent on high-speed broadband deployment, oil and natural gas production, and new corporate and retail facilities.

Telecommunications and cable, energy, and technology dominated this year’s Investment Heroes list, comprising 18 out of our top 25 companies. The fact that these three sectors are driving U.S. private fixed investment reflects their importance in driving U.S. economic growth.

Given the importance of investment as a path to sustainable growth, it is essential our economic policies make domestic business investment a priority. In our report we put forward four ways to encourage more U.S. investment: simplify the corporate tax system, invest in workforce training, don’t over-regulate innovative industries, and free up more spectrum.

*See full report for complete methodology and definitions.

 

U.S. Investment Heroes of 2013: The Companies Betting on America’s Future

Posted on by The Progressive Policy Institute

For too long, U.S. policymakers have focused narrowly on boosting consumers’ buying power, assuming that the productive end of the economy will take care of itself. Yet the last decade of slow growth shows that debt-driven consumption is not a sustainable strategy for expanding economic opportunity or lifting U.S. living standards. In contrast, a high-growth strategy requires strong investment—private and public—in our nation’s productive and knowledge capacities.

It’s time for progressives to rebalance the consumption-investment equation. Total domestic investment fell drastically during the recession and has yet to fully recover. A big part of the problem is the public sector. With gridlock in Washington and financial troubles at the state and local level, government real spending on productive assets from highways and bridges to computer equipment, net of depreciation, is down by half compared to the average level of the 2000s.

Investment by the private sector is doing better, but taken as a whole still falls way short of what the country needs to generate jobs and growth. As shown in Figure 1, business investment, outside of housing, is still 20 percent below its long-term trend. There are several reasons why private business investment is failing to reach its potential. Globalization, weak demand, deleveraging and a shortage of workers with technical skills all contributed to the investment fall-out and subsequent investment gap. And as PPI has documented elsewhere, the sheer accumulation of regulations over time can discourage capital investment and innovation.

Within this gloomy picture, however, are some bright spots—companies that continue to place big bets on America’s future, creating jobs and raising productivity in the process. Surprisingly, in a world of information overload, identifying these major contributors to the U.S. economy is not an easy task, since most companies do not break out their domestic capital spending. That’s why we undertook our second annual report on “U.S. Investment Heroes,” making a systematic analysis of publicly available information to rank nonfinancial companies by their capital spending in the U.S.

PPI’s ranking of U.S. Investment Heroes for 2013 is once again led by AT&T, which invested almost $20 billion in the U.S. in 2012. The list then follows with Verizon, Exxon, Chevron, Intel and Walmart. Together, we estimate these companies invested almost $75 billion in the U.S. in 2012, an astonishing total almost twice the GDP of Wyoming. Over the last year, these companies have poured capital investment into the deployment of high-speed broadband, oil and natural gas production, and new corporate and retail facilities.

As a general principle such spending provides both direct and indirect benefits to Americans. For example, a variety of studies suggest that investment in fixed and mobile broadband creates jobs. In fact, PPI Chief Economic Strategist Michael Mandel estimates that since Apple introduced the iPhone in 2007, the economy has created over 750,000 jobs related to mobile apps.

Indeed, telecommunications and cable companies are a major driver of U.S. investment today, sparking the rise of what we call “the data-driven economy.” The digital transformation of the U.S. economy would not be possible if high-speed fixed and mobile broadband networks were not in place. That’s why encouraging private investment in our nation’s broadband infrastructure is rightly a major priority for the Obama administration. Beyond that, robust private investment in smart devices, sensors, and “big data” analytics is sparking the emergence of the “Internet of Everything,” which could boost productivity and job creation in ‘physical’ industries such as manufacturing and transportation.

Our ranking of U.S. companies investing in America also shows the tremendous role energy—oil and natural gas production and power generation—has on U.S. economic growth. The shale oil and gas boom has turned old assumptions about energy scarcity on their head. It is lowering input costs for U.S. chemical companies and helping to revive U.S. manufacturing. It may also turn the United States into a major energy exporter, while creating jobs at home.

This report is the third in PPI’s “Investment Heroes: Who’s Betting on America’s Future” research series. That so many companies are choosing to invest elsewhere—or not at all—makes it all the more important to recognize those that are placing their bets on America’s future.

Download the memo.

 

Real Earnings for Young College Grads Rose in 2012

Posted on by The Progressive Policy Institute

Finally some good news for young college grads – in 2012 their real average annual earnings increased for the first time in six years. New data reveals average annual earnings for college graduates age 25-34 working full-time increased 0.9 percent in 2012, in constant dollars.

The turnaround could represent a major shift in the fortunes of young grads, who have seen their real average annual earnings fall by 15 percent since 2000. A bottoming out of this precipitous decline is welcome news to current and recent college graduates struggling to balance paying off student loans with gaining financial independence.

However, this good news should be met with cautious optimism. The same data also shows that real average annual earnings of all college graduates continued to fall in 2012. As shown in the chart below, real average annual earnings for people age 18 and over working full-time with a Bachelor’s degree only fell 2 percent last year, now almost 10 percent below 2000 levels. The fact remains that people with a college degree (and only a college degree) continue to have a tough time in today’s labor market.

That real earnings for all college graduates continued to fall suggests young college graduates aren’t yet in the clear. Young college graduates epitomize the today’s middle-class – they typically work in middle-skill jobs that pay average wages. It follows that young college grads were one of the groups worst affected by the financial crisis and the decade-long hollowing out of middle-skill jobs. Since their wages have fallen significantly more than their older college graduate peers, the turnaround could be an early indicator of labor market recovery for the middle-class or it could simply reflect they have much further to climb. Continued downward pressure on earnings of all college graduates won’t help sustain this momentum.

That means many challenges remain for young college graduates, in spite of this turnaround in earnings. The most recent figures show over half of recent college graduates are underemployed or unemployed, a historical high. The downward pressure on earnings from “The Great Squeeze” – the economic reality that college graduates are increasingly forced to take lower skill jobs for less pay – was exacerbated by the recession but started well before. Once a college graduate starts on a slow-growth career trajectory, it can be very hard to catch up financially.

The economic obstacles afflicting young college graduates will be difficult to truly reverse unless there are fundamental changes in how we prepare and train our workforce. Given how much lost ground real earnings for young graduates still have to recapture, and the importance of investing in a college education in today’s economy, that means policymakers would be well-served to make such reforms a bigger priority.

The Atlantic: It’s Time for a New United Nations

Posted on by The Progressive Policy Institute

In March of 2011 and just hours before the United Nations Security Council vote, Libyan dictator Muammar Ghaddafi promised citizens of Benghazi–his own countrymen–that he was “coming tonight” and that would show them “no mercy and no pity.” Gaddafi’s brazen statement telegraphed an impending attack with a high possibility massive civilian casualties.

In the Security Council immediately following Gaddafi’s threats, Russia and China–two permanent members with noted authoritarian governments themselves–abstained from voting on resolution 1973, which authorized “all necessary measures to protect civilians… including Benghazi.” (Germany, Brazil, and India, then-rotating members of the Security Council, abstained as well for their own reasons.)

In hindsight, Russia seems to have regretted its abstention. In January 2012, speaking about the growing civil war in Syria, Foreign Minister Sergei Lavrov told Australian TV that “the international community unfortunately did take sides in Libya and we would never allow the Security Council to authorize anything similar to what happened in Libya” in Syria.

That seems odd, because “what happened in Libya” was, on balance, a good thing: A sustained NATO air campaign unquestionably protected many more innocent civilians than it harmed and weakened Gaddafi’s forces en route to his downfall. What’s more, the Libya operation served as validation for those supporting the “responsibility to protect,” a 2006 Security Council mandate that called on parties involved in armed conflict to bear primary responsibility to protect civilians, approved by a unanimous 15-0 vote.

Continue reading at the Atlantic.

Don’t Make Credit Unions Die for Banks’ Sins

Posted on by The Progressive Policy Institute

Five years ago this week, a collapsing housing bubble plunged America into its worst financial crisis since the Depression. Wall Street’s near meltdown midwifed both the tea party and the Occupy movement, and triggered a bitter debate about the big banks that continues to this day.

The ongoing controversy over whether we have solved or compounded the “too big to fail” problem may have cost Larry Summers his shot at the Federal Reserve’s big chair. But amid all the focus on the handful of U.S. mega-banks, policymakers have paid scant attention to their little cousins – America’s credit unions.

Now, however, credit unions are drawing fire from the banking industry for their not-for-profit tax status. The banks claim this exemption should be revoked because it gives credit unions an unfair competitive advantage over for-profit banks. “Credit unions were never intended to be untaxed banks, yet that is what many have become,” according to Frank Keating, president and CEO of the American Bankers Association.

Keating’s sentiment is representative of many in the banking industry, but ultimately his words ring hollow. His association boasts a diverse membership of large and small banks. Last time I checked, there aren’t any credit unions that maintain a profitable global derivatives business and an essential investment-banking unit that underwrites multi-billion dollar corporate mergers and acquisitions like some of his members.

Eliminating the tax exemption is a terrible idea that would deal a fatal blow to 6,815 credit unions that provide low-cost financial services to 93.8 million members nationwide. It would also eliminate one of the safest and soundest segments of the financial services industry that stewards more than $1 trillion.

Continue reading at U.S. News & World Report.

Forbes: The Net Neutrality Parable Provides Clues Of How To Fix The FCC

Posted on by The Progressive Policy Institute

The net neutrality debate reached a fever pitch last week when the D.C. Circuit heard oral arguments in Verizon v. FCC. Although many pundits have predicted what the appeals court will do, let’s search instead for an instructive lesson for reforming the FCC, something that policy wonks on all sides of the debate agree is necessary.

For years, I have been peddling a “compromise” on net neutrality between the folks who want to level the playing field for websites (or “edge providers”) and the folks who want to turn down the lights at the FCC.

Before explaining the idea, a quick backgrounder is in order: In December 2010, the FCC issued its Open Internet Order, which effectively proscribed certain practices by Internet service providers (ISPs), including selectively blocking traffic and contracting for priority delivery with websites. Rather than imposing an outright ban on “pay for priority” contracts, the FCC sternly warned ISPs that “as a general matter, it is unlikely that pay for priority would satisfy the ‘no unreasonable discrimination’ standard.” Put differently, such arrangements would presumptively violate the FCC’s new “non-discrimination” rule, and the burden would be on the ISP to reverse that presumption if it was ever foolish enough to try such a thing.

Of course, these rules have nothing to do with discrimination in the classic sense—that is, treating someone or something differently on the basis of some exogenous attribute (such as age, race, or lack of affiliation). For example, under the FCC’s Open Internet Order, if Time Warner  (an ISP) entered into a pay-for-priority arrangement with Sony (a website) to support a Sony online-gaming application, that contract would presumptively violate the FCC’s “non-discrimination” rules even if Time Warner stood ready to extend the same economic terms to all comers. Calling these rules the “zero-price rule” or the “no-economic-relation” rule would have been more accurate, but less politically appealing.

Continue reading at Forbes.

The Atlantic: Could the ‘Internet of Things’ Really Save the U.S. Economy?

Posted on by The Progressive Policy Institute

The Atlantic‘s Tim Fernholz wrote an article referencing PPI’s Chief economic strategist Michael Mandel and his opinion on the Internet of Things being the key solution to saving America from “economic ruin”:

The “internet of things”–the increasing number of machines equipped with internet-connected sensors–will expand the US economy by $600 billion and $1.4 trillion in 2025, roughly the equivalent of boosting GDP by 2% to 5% over the intervening time period. That could be the difference between so-so growth to the kind of stable growth that drives down debt and unemployment.

Fernholz also quoted Michael Mandel on his hope that America could make “on-the-job-training easier by making machines more responsive to their users”.

Read the entire article on The Atlantic website here.

Foreign Policy: Absent Without Leave

Posted on by The Progressive Policy Institute

In the late 1960s, Britain signaled the end of its long run as a world power by withdrawing from major military bases east of the Suez Canal. Today, as the White House confronts the crisis in Syria, could America be facing its own “east of Suez” moment?

The historical parallels aren’t exact. Britain was an empire; the United States isn’t — despite the tendentious polemics of inveterate anti-Americans, from Noam Chomsky to Glenn Greenwald. Britain had already been surpassed by bigger superpowers by the 1960s. That hasn’t happened to America and isn’t likely to happen in the foreseeable future. But the debate over intervention in Syria has illuminated large and growing cracks in the internationalist consensus that has underpinned U.S. global leadership since World War II.

That consensus has been strained to a breaking point by feral partisanship and by a Republican Party increasingly in thrall to libertarian ideas. As a skeptical Congress awaits a possible vote on President Barack Obama’s proposal to use military force against Bashar al-Assad’s regime, the big question is whether the United States can still muster the internal cohesion to play a decisive role in world affairs.

In his prime-time address Sept. 10, Obama asked Congress to postpone the vote pending a possible deal with Russia that would transfer Syria’s chemical arsenal to international custody. The scheme could spare Obama the embarrassment of being rebuffed by Congress, where sentiment against a U.S. strike has been hardening. But the fact that Russian President Vladimir Putin, Assad’s enabler and the U.S. president’s tormentor in chief, is the one throwing Obama a political lifeline should give us pause about the deal’s merits. To be sure, the deal would be good for Obama, allowing him to boast that his threat to use force compelled Assad to give up his chemical weapons. It might also earn Putin a Nobel Peace Prize. But it won’t end the agony of the Syrian people, because it would leave Assad free to go right on killing them with conventional weapons.

If Washington forswears the use of force against Syria, as Putin is demanding, it will have paid a very high price for reinforcing the norm against chemical warfare. The Russian gambit, moreover, may founder on its sheer impracticality: Will Assad, his back to the wall, really give up his most fearsome weapon? And how will U.N. weapons inspectors be able to find and remove all the regime’s chemical weapons in the middle of a war zone? Even from a purely logistical standpoint, the Russian proposal may be close to impossible.

Read the piece at Foreign Policy.

Can the Internet of Everything bring back the High-Growth Economy?

Posted on by The Progressive Policy Institute

The United States and the other major advanced economies are currently stuck in a seemingly endless twilight of slow growth. The numbers are ugly: The April 2013 forecast from the International Monetary Fund predicts that economic growth in Europe will average only 1.7% over the next five years. Japan is projected to average only 1.2% growth. Germany, held up as a paragon of success, is expected to grow at only 1.3% annually.

The United States is doing better than Europe and Japan, but not by much. The nonpartisan Congressional Budget Office is currently projecting that the underlying growth rate of the U.S. economy—the so-called ‘potential’ growth—is around 2.2% annually, compared to an average of roughly 3.3% in the post-war period.

Both Democrats and Republicans in Washington, miles apart on most issues, have accepted the slow growth scenario. That helps explain, in part, the political gridlock in Washington. An economy growing at barely over 2% per year doesn’t generate enough income to pay for everything that Americans need: Social Security and Medicare for the aging population, defense spending sufficient to handle critical threats, and support for essential government investment in basic research, education, and infrastructure. The longer that the slow-growth assumption gets locked in, the more it becomes a self-fulfilling prophecy.

Yet we are not stuck with the slow-growth scenario and the endless and frustrating Washington policy debates about dividing a shrinking pie. Over the past year, a series of studies from research institutes and industry have laid out a compelling new vision of a highgrowth future—one that that could revolutionize manufacturing and energy, create employment for the jobless generation, and bring back rising living standards.

These new studies—from organizations such as the McKinsey Global Institute, GE, Cisco, and AT&T—describe the economic potential of a new wave of technological innovations known as the Internet of Everything (IoE)—also sometimes called the Internet of Things, the Industrial Internet or Machine to Machine. (Though as discussed below, the Internet of Everything is a broader, more accurate concept than the other terms, encompassing much more than just ‘things’.)

Taking the McKinsey projections as a base, we estimate that the Internet of Everything could raise the level of U.S. gross domestic product by 2%-5% by 2025. This gain from the IoE, if realized, would boost the annual U.S. GDP growth rate by 0.2-0.4 percentage points over this period, bringing growth closer to 3% per year. This would go a long way toward regaining the output—and jobs—lost in the Great Recession.

Equally important, from the macro perspective, the result will be a shift to growth that is not just faster, but higher quality. Rather than being fueled by consumption and borrowing, the Internet of Everything will lead to an economy built on production and investment, with much more extensive education and training built right into the fabric of the economy rather than being separated out.

Download the memo.