Category: Uncategorized

Retail Holidays Show Need for More Small Business Financing

Posted on by The Progressive Policy Institute

With the “fiscal cliff” likely to be averted, consumers are gearing up for the Holiday season. Retail designated shopping days “Black Friday,” “Small Business Saturday,” and “Cyber Monday” all saw an increase in sales, a good sign of consumer optimism heading into December.

Small businesses depend on retail spending days like these, and on consumer optimism throughout the year. And a big part of successfully growing their business is to have adequate access to financing. But “tight credit” and “small business” have been tied together by politicians and pundits as headwinds to economic recovery. Last year, PPI contributor Brian Martin wrote “The Credit Gap: Easing the Squeeze on the Smallest Business” showing how increasing lending caps at credit unions would unleash billions to the smallest small businesses (50 employees or less) and allow new growth and hiring opportunities with no taxpayer assistance.

So PPI is spotlighting Martin’s paper. We urge Congress to pass the Credit Union Small Business Jobs Bill, S. 2231 [introduced Senator Mark Udall (D-CO)]. This bipartisan bill would raise the credit union member business lending cap to 27.5% of assets and could provide up to $13 billion to small businesses in the first year alone. This could create over 140,000 new jobs at no cost to taxpayers.

Democrats Must Step Up on Entitlement Reform for Fiscal Cliff Deal

Posted on by The Progressive Policy Institute

PPI President Will Marshall speaks to The Daily Beast regarding the compromises needed from the left to avoid the fiscal cliff:

‘It appears President Obama is serious about slowing the growth of public health and retirement costs, which is the key to bending down the curve of federal spending,’ says Will Marshall, president and founder of the Progressive Policy Institute. ‘The big question now is whether leading Democrats in Congress will stand up to the Norquists of the left and put real entitlement reform on the table.’

That is the big question. Labor unions rightly believe that they were essential to the president’s winning coalition and ground-game effort in the November election. They and many liberal partisans will insist that now is not the time to make any concessions, especially on core philosophic policies like Social Security and Medicaid. They will find comfort in the arguments of some party activists and pundits who say there is no problem, that the fiscal cliff is a myth, and that current levels of deficits and debt are perfectly sustainable, especially if we just soak the rich. They are, like their conservative corollaries, embracing a feel-good reality distortion field.

Math isn’t partisan. The Congressional Budget Office has projected that because of our aging population, cumulative spending on Social Security, Medicare, Medicaid, and interest on the debt could gobble all federal revenues by the end of the next decade. The status quo is unsustainable. We cannot simply tax or spend or borrow our way out of this problem. Striking the right decisive balance is critical to our long-term economic strength as a nation.

Read the entire article at The Daily Beast.

Challenge to Stop the Never-ending Campaign

Posted on by The Progressive Policy Institute

PPI Senior Fellow Jim Arkedis calls for members of Congress to take six-month timeout from raising money in Politico.

The 2012 election is over, but don’t tell Sen. Mitch McConnell (R-Ky.) and Rep. Kurt Schrader (D-Ore.). No sooner were the votes counted that they were back on the campaign money chase within a week, raising cash for the November 2014 contest.

Even though the culture of unlimited political money was cemented by the Citizens United decision, it’s time we ask our elected representatives a crucial question: Will members of Congress ever stop campaigning?

Congress has a major task ahead of it in the coming session. Members must compromise to strike a delicate balance on spending cuts and revenue increases that begins to control the country’s debt, while consolidating fragile economic momentum and continuing to make necessary investments in the education, infrastructure, and energy sectors among others. Isn’t there something wrong when elected officials are already asking for reelection funds before attempting to achieve results the voters are clearly demanding?

Efforts to reform money in politics have gained traction of late. Many ideas are in the mold of McCain-Feingold bill of 2002: legislative or constitutional fixes that restrict the amount of donations or increase transparency.

In theory, these initiatives are sound. In practice, they’re less viable. In the current climate, it’s doubtful that Congress would vote to handcuff its fundraising prowess, and constitutional amendments are complex endeavors facing long odds. And as McCain-Feingold has proven, megadonors will always find legal loopholes, like super PACs.

Read the entire piece at Politico.

Don’t Let Hamas Win

Posted on by The Progressive Policy Institute

Sensing a rising Islamic tide in the Middle East, Hamas has picked a fight with Israel it can’t win militarily, but could win politically.  That’s something Secretary of State Hillary Clinton should prevent as she works to make a fragile cease fire hold.

No one wants to see Israeli forces go back into Gaza. A lot of Palestinians will be killed, many of them civilians.  A ground incursion also would highlight the asymmetry of power between the two sides, allowing Hamas to win sympathy by playing the victim. That’s why Israeli leader Benjamin Netanyahu is holding back, for now.

Nothing new here. Yasser Arafat and the PLO pioneered the cynical tactic of using terror attacks to provoke harsh Israeli reprisals, hoping that the resulting death and destruction among Palestinians would turn world opinion against the “occupation.”

What’s different now, of course, is the regional political landscape. Democratic elections have brought Islamic parties to power in Turkey, Egypt and Tunisia. Secular dictators like Hosni Mubarak held no brief for Hamas, but his successor, Mohammed Morsi can’t disavow a kind of kinship with Hamas, which considers itself a branch of his party, the Muslim Brotherhood.

Continue reading “Don’t Let Hamas Win” →

Election Watch: 2012 Is in the Books!

Posted on by The Progressive Policy Institute

I won’t bore readers with much about what they already know: Obama won; Democrats increased their margins in the Senate; Republicans lost House seats but easily hung onto control. Many of the scenarios we all spent a lot of time discussing during the General Election cycle are now moot: there was no “disputed election;” no electoral vote/popular vote “split;” no Republican Senate that would have allowed the GOP (in conjunction with a Romney win) to enact its agenda on a party-line vote; no Romney presidency without a Republican Senate that might (in theory, anyway) have enabled him to abandon his many promises to conservatives and pursue a bipartisan fiscal agreement.

As the final votes trickle in, it’s increasingly clear total voting will be down a relatively small amount from 2008, though not in most of the battleground states. And the composition of the electorate was very similar to that of 2008, despite widespread predictions that under-30 voters and Latinos would not turn out at anything like 2008 levels. In the end, the main difference between 2008 and 2012 from a demographic point of view is that Obama’s percentage among white voters dropped from 43% to 39%, which was partially offset by an increase in his percentage among Latinos from 67% to 71%. Yes, Obama’s percentage of under-30 voters dropped, but it was partially offset by a small gain among voters aged 30-44 (probably reflecting late-twenties voters from 2008 who moved into the next category). The only two states Romney “swung” to the GOP were the two closest Obama states in 2008, Indiana and North Carolina. Obama’s final popular-vote percentage will be very similar to George W. Bush’s in 2004. It does, as you may have heard, make him the first Democrat to win a majority of the popular vote in two consecutive elections since FDR.

Democratic gains of two net seats in the Senate were the most remarkable result, given the vastly pro-Republican landscape. A lot of the post-election talk was about the unforced errors of Tea Party candidates in Missouri and Indiana, but Republicans would have still fallen four seats short of a majority had both those states fallen into the GOP column. In the House, although there is some controversy over how to measure the national popular vote (some states don’t collect or report votes for unopposed candidates), it’s reasonably clear Democrats won a small plurality even though they only picked up ten net seats, leaving Republicans with a 232-203 majority. Continue reading “Election Watch: 2012 Is in the Books!” →

Tech Investment Still Rising, Despite WSJ Story

Posted on by The Progressive Policy Institute

This morning the WSJ ran a story entitled “Investment Falls Off a Cliff: U.S. Companies Cut Spending Plans Amid Fiscal and Economic Uncertainty.” The story argued that:

Nationwide, business investment in equipment and software—a measure of economic vitality in the corporate sector—stalled in the third quarter for the first time since early 2009.

It’s worth noting, however, that tech investment rose in the third quarter to its highest level on record. The chart below shows real investment in computers, software, and communications gear, in millions of 2005 dollars

 

The chart is based on BEA data. Please note that there was a pause in tech investment, but it came in the second quarter, not the third.

 

The way to interpret this chart is that we are in the middle of a data-driven boom. Companies view investment in data and data-related equipment as absolutely essential, and continue to spend, fiscal cliff or no.

This piece was cross-posted from Innovation and Growth.

As Boom Lures App Creators, Tough Part Is Making a Living

Posted on by The Progressive Policy Institute

PPI Chief Economic Strategist Michael Mandel was quoted  in the New York Times on job creation in the App Economy:

A study commissioned by the tech advocacy group TechNet found that the “app economy” — including Apple, Facebook, Google’s Android and other app platforms — was responsible, directly and indirectly, for 466,000 jobs. The study used a methodology that searched online help-wanted ads.

Michael Mandel, the economist who conducted the TechNet study, said it was problematic to slice the jobs data as Apple had done. “The guy who writes an Apple app one day will write an Android app the next day,” he said. “You can’t add up all the numbers from every study to get the total number of jobs.”

Read the entire article here.

The 4 Issues Dragging Down the Economic Recovery

Posted on by The Progressive Policy Institute

PPI Chief Economic Strategist Michael Mandel was featured in the National Journal on regulatory reform:

Mitchell suggests creating a commission, modeled on the process that Congress has used to determine which military bases to realign or close, to weed out and eliminate federal spending that benefits certain businesses at the expense of others. Economist Michael Mandel of the Progressive Policy Institute suggests a similar body to reduce the government’s impact on business growth by identifying federal regulations to repeal or modify.

Read the entire National Journal article here.

Trickle-Down Bribery, or, The Butch Cassidy Congress

Posted on by The Progressive Policy Institute

Lindsay Lewis writes in the Daily Beast that the real corruption in Congress is facilitated by congressional staff whose main goal is to keep their boss and donors happy:

The House of Representatives in the 112th Congress has earned its single digit approval rating with aplomb. Gridlock, brinksmanship, mistrust, and meaningless partisan votes make today’s Congress the most dysfunctional I’ve seen in twenty years working on and around Capitol Hill.

Today, it pays to be an ardent partisan. Both parties now have super PACs—outside political organizations established by the Supreme Court’s Citizen’s United decision—that accept millions in unlimited donations to support candidates. Democrats have House Majority PAC and Majority Leader Eric Cantor (R-VA) has established the Young Guns Action Fund for Republicans. Members may not be able to coordinate their activities with a super PAC, but they sure can raise money for them.

Though a July poll found two-thirds of Americans uncomfortable with unrestricted money in politics, the Supreme Court ruled that this influx of cash will not jeopardize our democratic process. Donors “might have influence or access to elected officials,” reads the Citizen’s United decision, but it “does not mean that those officials are corrupt.”

That interpretation may be technically correct, but it’s clear a majority of Supreme Court Justices have no idea how politics really works. I do. I’ve seen first hand how corruption infiltrates Congress. While Members’ votes are not necessarily for sale, America’s legislative process most certainly is. And the super PAC era is making the situation exponentially worse.

Congressional corruption is facilitated by Hill staff. Members of Congress are in the customer service business. Members must track down lost Social Security checks, listen to complaints in the district, and take feedback on proposed legislation.

Read the entire piece.

Obama Counts Capital Gains

Posted on by The Progressive Policy Institute

The Herald Scotland quotes PPI President Will Marshall on Obama’s tax strategy for his second term:

It was a very close race and it showed a country that’s still very divided,” said Will Marshall, president of the Progressive Policy Institute. “But I think that the president does have a specific mandate for an end to tax breaks for the rich.”

Read the entire article here.

How the Latino Vote Will Shape Future Housing Policy

Posted on by The Progressive Policy Institute

Writing for U.S. News & World Report, Jason Gold explains how the Latinos will influence the future of housing policy:

A “Modern Family” coalition of single women, African-Americans, and progressive young voters who are passionate about hot-button social issues helped propel President Barack Obama to a second term this election. But it was the commanding Hispanic vote—Obama won 71 percent of Latino voters—that truly powered the president’s successful run for re-election.

So what helped drive the Latino turnout in key swing states such as Nevada, Arizona, Colorado, and Florida? While a lot can be credited to anti-immigration stances taken by some GOP candidates in the primaries, the struggling housing market in key states also had an impact: The same swing states (Nevada, Arizona, and Florida) that turned out high Latino votes were also the hardest hit in the housing crisis. Moreover, 28 percent of Latino homeowners surveyed earlier this year were underwater, compared to only 14 percent of the general population.

That might have made a big difference when it came to looking at the differing approaches of the Obama and Romney campaigns. While the Obama administration and congressional Democrats crafted legislation and campaigned on broad refinance bills aimed at helping those same underwater borrowers, Mitt Romney took a more hands-off, market clearing approach, infamously telling the Las Vegas Review-Journal to “Let it [housing market] run its course and hit bottom.”

Read the entire piece.

Conference Report – The Rise of the Data-Driven Economy: Implications for Growth and Policy

Posted on by The Progressive Policy Institute

On October 10-12, 2012, the Progressive Policy Institute joined forces with John Cabot University in Rome to highlight the transformative potential of rise of data-driven economic innovation and growth. Hosted by John Cabot in collaboration with the Guarini Institute, the European Privacy Association and the Center for European Policy Studies, the transatlantic dialogue brought together representatives of leading U.S. technology companies and European Union officials, as well as analysts and experts from think tanks, non-profit organizations and academia.

Entitled The Rise of the Data-Driven Economy: Implications for Growth and Policy, the discussion centered on the increasing contribution of data-driven activity to economic growth in the United States and Europe; the European Union’s controversial data protection regulation; the responsibility of companies to build trust by being “ethical stewards” of their customers’ data; and, political threats to an open and free Internet.

Conference Speakers: Rita Balogh, Senior Associate, APCO; Michael Mandel, Chief Economic Strategist, Progressive Policy Institute; Jacques Bughin, Director, McKinsey Global Institute; Anthony House, Manager of Public Policy, Google; Roberto Masiero, President, THINK! The Innovation Knowledge Foundation; Pietro Paganini, Managing Director, European Privacy Association; Pat Walshe, Director of Privacy, GSM Association; Luca Bolognini, President, Italian Institute for Privacy; Ed Black, President & CEO, CCIA; Daniele Pica, Professor, John Cabot University; Megan Richards, Director, DG Connect; Chris Kelly, Kelly Investments; Michael Kende, Co-Head of the Regulation Sector, Analysys Mason; Dimitrios Droutsas, Member of European Parliament; Carolyn Nguyen, Director of Technology Policy, Microsoft; Dr. Thierry Vissol, Special Adviser, DG COMM Media & Communication; Paul W. Taylor, Governing Magazine; Laura Fennell, General Counsel, Intuit; Giuseppe Conte, Professor of Law, University of Florence; Maurice Fitzgerald, VP Strategy–Autonomy, Hewlett-Packard

Download the conference report.

Young People Turned Out to Re-Elect President Obama. Now What?

Posted on by The Progressive Policy Institute

They defied the pundits: young people turned out to vote in numbers that rivaled their 2008 record. An estimated 23 million young people age 18-29 voted, even more than the highly coveted 65 and over cohort. And not surprisingly, for reasons I’ve previously pointed out, young people overwhelmingly supported President Obama by a margin of 60-40.

But President Obama’s work has really just begun. Now that TV advertising has returned to normal, young people are eager to know what’s next, what President Obama is going to do to help them get more jobs and more money.

Young people are struggling: they’ve had a worse recession and recovery than any other age group. The 18-34 year old cohort is still over 2 million jobs short since the recession began and real earnings continue to fall. But helping young people means understanding why they have been hit so hard in the first place relative to other age groups, why they weren’t the first to be re-hired as common theory dictates, and why the youngest and least educated are being squeezed out of the labor force. Continue reading “Young People Turned Out to Re-Elect President Obama. Now What?” →

It’s the Ideology, Stupid

Posted on by The Progressive Policy Institute

At CNN, Will Marshall argues that the GOP’s real problem is ideology:

Republicans are consoling themselves with the claim that President Barack Obama didn’t win a mandate Tuesday night, even if he did renew his White House lease for another four years. They are fooling themselves, however, if they think the 2012 election merely ratified the political status quo. More than just a personal victory for Obama, the outcome was an unmistakable defeat for GOP ideology.

Disgruntled conservatives, of course, are already dressing Mitt Romney for the part of fall guy. But this is the politics of evasion. Sooner or later, GOP realists will have to reappraise the party’s message rather than shoot its messenger.

That message was a call for rolling back government. Intoxicated by a potent brew of resurgent libertarian dogma and intense personal animus toward Obama, Republicans vowed to undo his major achievements: health care reform, new rules for financial markets, the regulation of carbon emissions, higher fuel economy standards for autos, and so on.

Read the entire piece at CNN.com.

AT&T’s Investment Challenge to Corporate America

Posted on by The Progressive Policy Institute

The economy is improving, but the U.S. is still struggling with an investment drought. Capital spending by business is 26% below the long-term trend, and has not yet recovered to pre-recession levels. By comparison, personal consumption has topped its pre-recession levels, and is much closer to the long-term trend.

Against that backdrop, it is notable that  AT&T announced yesterday that it  expected  a capital spending budget of $22 billion per year for the next three years. To put this in perspective, the *entire* motor vehicle industry invested less than $20 billion  in the United States in 2011.

In some ways, AT&T’s willingness to make a public announcement of a capital spending target three years out is a challenge to Corporate America (though the company certainly does not frame it this way). By making this public statement,  AT&T is effectively saying that it believes in the communications revolution, data-driven growth,  and the strength of the U.S. economy.

Why can’t other companies make the same sort of public announcement of  long-term capital spending goals and offer additional certainty to the still recovering U.S. economy? Truthfully, growth is suffering more from investment uncertainty than from regulatory uncertainty. If large companies pledged to maintain or increase domestic capital spending over the next three years, it would go a long way to boosting economic and job growth.

With the election now over, the Obama Administration should hold up AT&T–and other companies willing to invest in America–as examples of what to do right. If Obama wants a high-growth economy with prosperity for all, he needs to encourage more companies to make the same kind of bet on America’s future.

This piece was cross-posted from Innovation and Growth.