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Election Watch: Obama Makes History

Posted on by The Progressive Policy Institute

It’s been a turbulent last few days on the campaign trail. On Tuesday, Indiana Republicans drove six-term Sen. Richard Lugar from office in favor of hard-core conservative state treasurer Richard Mourdock. While Lugar’s loss seemed inevitable well before primary day, the margin of his defeat—61-39—was shocking given his relatively conservative voting record over decades, and his staunch orthodoxy over the usual hot-button issues like abortion and taxes. Mourdock’s many out-of-state backers, including the Club for Growth, Jim DeMint’s Senate Conservative Fund, and virtually every right-wing blogger on the planet, made it abundantly clear that getting rid of Lugar was intended to teach the national Republican Party a lesson about the price involved in disrespecting the Tea Party Movement (Lugar had never even attempted to pander to them) and sticking to the outmoded traditions of Senate bipartisanship.

The day after the primary Mourdock reinforced the “lesson” by calmly telling Chuck Todd that he defined “bipartisanship” as “Democrats coming to the Republican point of view.”

While Indiana’s current pro-GOP tilt makes Mourdock a slight favorite in a general election contest with Rep. Joe Donnelly, the unexpected vulnerability of the seat has scrambled many early assumptions about the 2012 Senate election landscape, particularly when combined with Olympia Snowe’s recent surprise retirement. Today the Washington Post’s Paul Kane published an overview of Senate races quoting several leading handicappers as giving Democrats a slight edge in their battle to hang onto control of the chamber; it all may come down to the vice president’s tie-breaking vote.

Continue reading “Election Watch: Obama Makes History” →

The Fine Art of Cabinet-Making: Five Ways to Build a Stronger Executive Team

Posted on by The Progressive Policy Institute

The job of the presidency has grown so large, so overwhelming in its power and responsibility, that no one human being can excel in all its many dimensions, from the ceremonial to the political, from making policy to managing a vast bureaucracy. In an atmosphere of bitter partisan division and a 24-hour news environment, presidents more than ever need help at the highest levels possible. Fortunately, there is a well-established yet greatly underutilized institution readily available to lend a hand: the presidential cabinet.

Although the cabinet and its role in government are not formally established in the Constitution, presidents since George Washington have convened a collective body of the heads of the executive departments. Washington used cabinet meetings to tap into the wisdom of such luminaries as Secretary of State Thomas Jefferson and Secretary of the Treasury Alexander Hamilton. In her 2005 book Team of Rivals, Historian Doris Kearns Goodwin demonstrated how the strong and diverse cabinet assembled by Abraham Lincoln girded the nation at its time of greatest peril. FDR convened his cabinet the day after the Pearl Harbor attacks, while JFK famously relied on a subset of his cabinet during the Cuban Missile Crisis.

Over the past half-century, however, the rise and expansion of the White House staff has centralized deliberation and decision-making increasingly within the confines of 1600 Pennsylvania Avenue. Between this reliance on professional staffers and life in the ever-more restrictive “security bubble,” presidents have had less and less direct access to a range of views and opinions. Indeed, while the Kennedy and Johnson cabinets met monthly, the Obama cabinet has met less than one-third as often.

Today, cabinet meetings are often little more than occasional photo ops to bring together POTUS, the VP, the heads of the 15 executive departments and a few other “cabinet-rank” officials such as the heads of the Office of Management and Budget and the Environmental Protection Agency, the Ambassador for the United Nations, and the U.S. Trade Representative. Virtually the only time they are seen together by the public is in the front row at the annual State of the Union Address.

By contrast, many of America’s democratic allies benefit from the much more central role played by their cabinets, particularly in parliamentary systems where they are critical partners in the governance of their nations. In countries such as the United Kingdom, Canada, Australia, and Germany, the executive leadership comprises an entire team of senior politicians who meet weekly to lay out political alternatives and strategize about policy implementation. In many parliamentary systems, the cabinet is considered so central that the members are all considered to share “collective responsibility” for the work of government.

Under the U.S. Constitution, the American president will always remain paramount, but both the president and the nation could benefit greatly by enhancing the role and strengthening the position of the cabinet. Below are five ideas to maximize the reach and impact of the president’s hand-picked first-string team.

Read the entire memo here

Choose-Your-Benefit: Can Citizens Help Save Social Security?

Posted on by The Progressive Policy Institute

Recently, the Trustees of the Social Security and Medicare trust funds issued their annual report on the future of America’s entitlement programs. As usual, the news was bleak: Social Security is now expected to go bust in 2033, three years earlier than projected last year.

In their report, the Trustees also issued a sober warning: “Lawmakers should not delay addressing the long-run financial challenges facing Social Security and Medicare.”

Unfortunately, Congress doesn’t look like it’s up to the task, especially in an election year.  Not too long ago, the House of Representatives overwhelmingly rejected—by a vote of 382-38—a bipartisan budget plan based on the recommendations of the White House’s deficit reduction commission that would have included some highly sensible steps toward entitlement reform.

Continue reading “Choose-Your-Benefit: Can Citizens Help Save Social Security?” →

Room for Regulatory Improvement

Posted on by The Progressive Policy Institute

A new survey released today by Thumbtack.com gives more evidence that reforming regulations for new and small businesses at the state and local level could lead to valuable economic gains.

The survey, which assessed how “friendly” states and local areas were to new and small businesses, finds that those states with the friendliest climates had fewer licensing regulations and other legal hurdles that hindered business registration. In fact, the survey found small businesses viewed licensing requirements as almost twice as important as tax rates in determining how friendly a state was to its businesses. And states deemed the most friendly to business, including Texas, Idaho, and Oklahoma, were also the states where respondents claimed starting a new business was easy.

The survey, which received over 6,000 responses from small businesses across the country, was conducted by Thumbtack.com in partnership with the Kauffman Foundation. It found Texas was the friendliest state in the nation for small businesses, while California was ranked as the least friendly.

Small businesses are a crucial backbone to the U.S. economy, employing almost half of all American workers. That’s why it’s important to implement business regulations and policies that make establishing a new business a relatively smooth process. States that have excessive or redundant regulatory processes could be discouraging an important source of economic growth, or lose out on business opportunities to a more friendly state. And with those lost business ventures comes lost spillover effects to the local economy that are an important source of state and local revenue.

PPI has long advocated for reducing unnecessary regulatory hurdles, to encourage the development of new innovations and facilitate getting those innovations to market quickly and efficiently. That’s why PPI proposed a Regulatory Improvement Commission, a congressionally authorized body designed to reduce and remove unnecessary Federal regulations as submitted by the public, as part of our Regulatory Reform Initiative.

Given how many states have “unfriendly” regulations, emulating such a Commission at the state level could certainly have a significant impact on creating friendlier business climates. And given the slow economic recovery, it’s as important as ever policymakers at all levels of government work to balance consumer safety and business legitimacy with creating a more conducive climate for small and new businesses.

Photo credit: marsmet526

Zuckmentum!: Why the Silicon Valley App Boom Could Sink Romney

Posted on by The Progressive Policy Institute

The AtlanticPPI Chief Economic Strategist Michael Mandel, explains in The Atlantic the surprising link between the future GOP presidential nominee and the upcoming Facebook initial public offering.

“Mitt Romney and his fellow Republicans are gleefully pounding President Barack Obama for the weaker-than-expected employment report released on May 4. Growth seems to be weakening and Romney is positioning himself as the business-minded economy savior for the country.

“At the same time, the Facebook IPO, anticipated to value the company at more than $75 billion, is a tangible sign of the vast amounts of wealth and income being generated by the communications boom and the so-called App Economy. Smartphones, broadband wireless, social media, apps — all are combining to provide a potent force for economic growth.

“So the question is: Should Romney be worried about an “App Surprise” — a sudden acceleration of growth and job creation fueled by the smartphone/communications boom?

“That might seem unreasonable given the other drags on the economy. Yet Romney and his advisers would be wise to remember the events of the 1996 election campaign.”

Read the full article at The Atlantic

Will Marshall on the French Presidential Election

Posted on by The Progressive Policy Institute

PPI President Will Marshall argues that the victory of Francois Hollande, a Socialist and the next president of France, will not likely have any significant impact on the American presidential election over at POLITICO’s Arena:

Americans look to France for many things – fine wine and food, romantic getaways, bullet trains – but rarely for political models. Some Republicans may try to draw parallels between President Obama and a real Socialist, Francoise Hollande, but swing voters don’t share the GOP’s Francophobia.

Besides, as Reds go, Hollande isn’t very menacing. For all his talk of putting growth before austerity, Hollande promised during the campaign to balance France’s budget just one year later than Sarkozy. And Hollande’s will be constrained from a massive public spending splurge by France’s need to borrow from capital markets to finance its enormous debt (90 percent of GDP).

Read the entire op-ed here

Election Watch: The Political Cycle Heats Up

Posted on by The Progressive Policy Institute

The presidential contest executed a rare turn into foreign policy this week, with a flurry of controversy around the first anniversary of the killing of Osama bin Laden.

Having already made it clear that he would not be shy to claim this event as a personal and administration success story, the president and his team upped the ante with a web video (narrated by Bill Clinton, no less) that noted a 2007 remark by Mitt Romney dismissing any focus on the pursuit of bin Laden as a waste of time and money (Romney was at the time supporting the Bush administration’s “wider war on terror” policy and also responding to criticism from Democrats—including Obama—that the administration had diverted vital resources from Afghanistan in order to prosecute a failed war in Iraq). Romney and other Republicans reacted angrily to the ad, suggesting that Obama was “politicizing” the operation that killed Osama, and arguing that “even Jimmy Carter” would have given the order to proceed with it. After some shots back and forth, the president’s surprise trip to Afghanistan, and televised address on a new security pact with the Afghans, seem to have convinced Republicans they were simply drawing fresh attention to Obama’s top national security accomplishment, and so sought to change the subject.

Continue reading “Election Watch: The Political Cycle Heats Up” →

5/2 Manufacturing Event Summary

Posted on by The Progressive Policy Institute

The Progressive Policy Institute would like to thank everyone who attended our economic policy forum on “Manufacturing in the Age of the App Economy”, which took place on Wednesday, May 2.

Michael Mandel, Jared Bernstein, Leo Hindery and Louis Uchitelle discussed the critical role manufacturing plays in today’s app-fueled economy. While there was certainly lively debate regarding the best tools and policy options available, the consensus that emerged was that the federal government must refocus and redouble its efforts to promote American manufacturing and make it more competitive. By creating a smart manufacturing agenda for the 21st century, we can add balance to our economy and put America back on the sustainable path of producers, not consumers.

An explicit jobs target is the first concrete step towards achieving that goal. PPI believes we should aim to boost manufacturing employment up to 15.5-16 million, a level last reached in 2001. The employment spillover effects of manufacturing are also significantly larger than commonly thought, so more manufacturing jobs would create more jobs elsewhere as well. With unemployment still unacceptably high, the imperative to act has rarely been more clear.

PPI EVENT: Manufacturing in the Age of the App Economy

Posted on by The Progressive Policy Institute

The Progressive Policy Institute hosted an economic forum to discuss the critical role of manufacturing in the era of the app economy.

PPI Chief Economic Strategist Michael Mandel presented the findings of his new paper, “Manufacturing in the Age of the App Economy: How Many Factory Jobs Should We Aim For?”, co-authored with PPI economist Diana G. Carew.

The panel included Michael Mandel, Jared Bernstein, Leo Hindery and Louis Uchitelle, who discussed the critical role manufacturing plays in today’s app-fueled economy. There was debate regarding the best tools and policy options available, and the consensus that emerged was that the federal government must refocus and redouble its efforts to promote American manufacturing and make it more competitive. By creating a smart manufacturing agenda for the 21st century, we can add balance to our economy and put America back on the sustainable path of producers, not consumers.

An explicit jobs target is the first concrete step towards achieving that goal. PPI believes we should aim to boost manufacturing employment up to 15.5-16 million, a level last reached in 2001. The employment spillover effects of manufacturing are also significantly larger than commonly thought, so more manufacturing jobs would create more jobs elsewhere as well. With unemployment still unacceptably high, the imperative to act has rarely been more clear.

Download “Manufacturing in the Age of the App Economy: How Many Factory Jobs Should We Aim For?”

[audio:https://www.progressivepolicy.org/wp-content/uploads/2012/04/ppi_Manufacturingintheappeconomy-050212.mp3|titles=ppi_Manufacturingintheappeconomy 050212]

Date:
Wednesday, May 2, 2012
9:30 – 11 a.m.

Featured Panelists:
Michael Mandel, Chief Economic Strategist, Progressive Policy Institute
Jared Bernstein, Senior Fellow, Center on Budget and Policy Priorities
Leo Hindery, Managing Director, Intermedia Partners
Louis Uchitelle, Economics Writer, The New York Times

Location:
The Mayflower Hotel, Chinese Ballroom
1127 Connecticut Ave. NW, Washington, DC

 

Trying to Shed Student Debt

Posted on by The Progressive Policy Institute

PPI Economist Diana Carew’s work on the rising burden of student debt for young college grads was cited in the Wall Street Journal:

In the past decade student debt has surged as tuition and enrollment climbed. At the same time, college graduates’ earnings have declined. The average debt load of all new graduates rose 24%, adjusted for inflation, from 2000 through 2010, to $16,932, says the Progressive Policy Institute, a left-leaning think tank in Washington. Over the same period, the average earnings of full-time workers ages 25 to 34 with no more than a bachelor’s degree fell by 15% to $53,539.

Read the entire article here.

Manufacturing in the App Economy

Posted on by The Progressive Policy Institute

We live in a world where the communications sector is driving the recovery and receiving much attention. We believe that this is the most important ongoing development in the American economy, offering the potential for long-term transformation.

But while very important, a boom in communications isn’t enough, alone, to achieve balanced and sustainable growth. We need every sector of the economy, including manufacturing, to contribute. With this in mind, the Obama Administration has taken the positive step of proposing a series of policy measures that would encourage domestic manufacturing.

In this spirit, we undertake an audacious question: In this era of apps and social media, what is a reasonable long-term goal for manufacturing employment?

We first show that manufacturing has larger job spillovers than commonly thought, based on new calculations. Next, we estimate the employment consequences of eliminating the trade gap in manufactured non-oil goods, a desirable long-term goal, without reducing our standard of living.

Assuming such a balancing, we find that the U.S. should aim to add roughly 3.5-4 million direct and indirect manufacturing jobs over the long run, raising total manufacturing employment to about 15.5-16 million, or 2001 levels. This bold effort would ease the job drought and offer millions of Americans a path to the middle class. What’s more, we would be producing more at home, while borrowing less from the rest of the world.

Achieving this admittedly aspirational goal would come at a relatively small price: we calculate that overall economy-wide prices would have a one-time rise of only 1.8-2.0%, spread out over the time it takes to close the trade gap. To put this in context, the inflation rate for gross domestic purchases has averaged well over 2% annually over the past ten years. So closing the trade gap would raise prices by less than one-year’s inflation.

Read the entire report here

Good News for College Grads (and the Economy)

Posted on by The Progressive Policy Institute

Finally, there is some good news for college grads. New data from the National Association of Colleges and Employers (NACE) shows the median starting salary for the class of 2012 is 4.5% higher than their peers grading just a year earlier. That translates into a starting annual salary of $42,569, compared to $40,735 for the class of 2011. And since inflation (minus food and energy) increased 2.4% over the last year, the benefit to college grads in the class of 2012 is real.

A lot has been said about the growing pile of student debt college grads are facing, and how policymakers can find ways to alleviate the burden. But that’s just part of the struggle college grads are facing – as PPI  noted in a study released earlier this year, the fact grads are becoming less able to repay this debt is just as important as the debt itself. What’s missing from the discussion on college grads is a solution that addresses this double whammy: right as the cost of going to college and debt per student is rising, real earnings have been falling. In fact, PPI found real earnings of young college grads aged 25-34 working full-time declined 15% over 2000-2010.

Continue reading “Good News for College Grads (and the Economy)” →

Will Marshall on the French Presidential Election

Posted on by The Progressive Policy Institute

PPI President Will Marshall argues that the Socialist presidential candidate, Francois Holland, is unlikely to offer France what it really needs-a credible program of deep structural reforms-over at Real Clear World:

When Republicans call President Obama a ‘socialist,’ it says more about their lunge to the right than Obama’s policies. Besides, if they want to see what a real socialist looks like, they should turn to a country they love to hate: France.

Francois Hollande, the Socialist Party leader, has a substantial lead over incumbent Nicolas Sarkozy heading toward their second round showdown on May 6, and stands a good chance of becoming France’s first Socialist President in 17 years.

As Reds go, Hollande is not especially menacing – ‘bland’ is how he’s usually described. Sen. Bernie Sanders, the gruff socialist from Vermont, is scarier.

But bland is what the French seem to want after Sarkozy, who is widely reviled as a vain and vulgar celebrity-president with a trophy wife – a Gallic Donald Trump. Hollande promises to be ‘Mr. Normal’ and restore dignity in the Elysée Palace.

Read the entire article here

The Government Investment Drought Continues

Posted on by The Progressive Policy Institute

Sometimes things are not what we think they are. The conventional notion is that government has become more important under President Obama, while the private sector has stagnated. Yet in some ways the data tell a different story. Take a look at this chart:

The top (blue) line shows that private nonresidential investment has rebounded smartly since early 2009, when President Obama took office. Residential investment first dropped, and then mostly came back.

Continue reading “The Government Investment Drought Continues” →

Why Bash Innovative Google?

Posted on by The Progressive Policy Institute

Let me get this straight.  The communications boom is finally reviving the U.S. economy. There’s an incredible wave of startup activity and excitement around smartphones, mobile apps, broadband wireless. Jobs are being created, and the economy feels alive again.  Sounds like a great time to be celebrating our success, doesn’t it?

Yet the Federal Trade Commission has apparently decided that it’s a good time to go after Google, one of the key leaders of the communications revolution. And, oh yes, incidentally one of the most  innovative companies in the world.  Are these guys serious?

According to a front page story in the NYT this morning, “[f]ederal regulators escalated their antitrust investigation of Google on Thursday by hiring a prominent litigator, sending a strong signal that they are prepared to take the Internet giant to court.”  The story went on to say “the core question is whether power was abused.”

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Election Watch: Upcoming Political Obstacles

Posted on by The Progressive Policy Institute

It appeared that the 2012 Republican presidential nominating process would come to a formal close this week (given Ron Paul’s lack of interest in officially withdrawing until the Convention), and after Newt Gingrich broadly hinted he needed an upset win in Delaware to stay in the race. He subsequently lost by 29 points, and indicated he intended to withdraw quite soon. Instead, he decamped to North Carolina, and for all the world looked like he was continuing the campaign, albeit in a desultory manner. But now comes word that his Secret Service Protection has been withdrawn, making his continued campaigning look even more absurd, so he’ll probably pull the plug before running up even more debts.

Speaking of North Carolina, the president was in Chapel Hill this week in an appearance (subsequently attacked by Republican groups, in what was probably just a shot across the bow, that he was misusing official resources for a de facto campaign appearance) that illustrated the interaction of various issues in potentially close states this year. He spoke to a receptive campus crowd about his proposal to retain a freeze on student loan interest rates, currently the subject of complex partisan maneuvering in Congress. But he did not speak of an issue on the minds of many college students in the state: Amendment One, the draconian constitutional amendment banning not only same-sex marriage but legal recognition of all same-sex relationships, which will appear on the North Carolina primary ballot on May 8.

Continue reading “Election Watch: Upcoming Political Obstacles” →