PPI President Will Marshall breaks down the merits of the Wyden-Ryan plan for Medicare reform in Politico:
An honest debate over Medicare’s future may be too much to hope for in an election year. But candidates should think twice before staking out positions that could tie their hands in next year’s unavoidable showdown over public debts and Medicare spending.
After all, 50 percent will win and actually have to govern. That’s why it’s a big mistake to allow the leading bipartisan proposal for Medicare reform — the Wyden-Ryan plan — to fall victim to election-year Medagoguery.
It’s the brainchild of Democratic Sen. Ron Wyden, a progressive Medicare champion who once led a Gray Panthers chapter in Oregon, and Rep. Paul Ryan (R-Wis.), chairman of the Budget Committee and darling of tea party conservatives. If this political odd couple can agree on a balanced way to slow the unsustainable growth of Medicare costs, there may be hope for real entitlement reform yet.
PPI Chief Economic Strategist Michael Mandel explains to Bloomberg why the recent surge in technology industry hiring is only the beginning of a communications-led economic boom:
A surge in technology-industry hiring is helping to spearhead a jobs-market revival as demand swells for computer-software applications and data.
Online help-wanted advertising for computer and mathematical occupations rose 3.4 percent in January from December to the third-highest since the Conference Board began compiling the data in 2005. Vacancies outnumbered job seekers by more than three to one, according to the New York-based research group. Postings on tech-career website Dice.com are 12 percent higher than a year ago, with openings for workers skilled in mobile applications up more than 100 percent.
“This feels like the beginning of another tech-driven jobs boom,” said Michael Mandel, chief economic strategist at the Progressive Policy Institute in Washington. “The broad communications sector resisted the downward pull” of the recession and “is going to be a leader in the expansion.”
PPI Chief Economic Strategist Michael Mandel brought forward one very important fact yesterday at the Institute for Policy Innovation’s “Creating the Future” Summit: for the first time, the communications sector will shape the economic recovery and drive future economic policy. At the summit, Mandel explained how the sector drove investment in innovation and added jobs over a period where total net investment dropped 50 percent and millions of jobs across other sectors were lost. Mandel’s recent study on the “App Economy” estimates at least 500,000 jobs have been created since 2007 by the explosion of apps.
Mandel argued that the future importance of the communications sector during the next expansion follows historical trends—in previous downturns the sectors that brought the economy back to life also drove the subsequent expansion. And of all the sectors that could be fueling the next economic boom, communications—a sector whose innovations have transformed how we live and our quality of life—is a good sector to have in this position.
PPI President Will Marshall explains the significance of Senator Snowe’s surprise retirement for Politico’s Arena:
“The decisions by Sen. Olympia Snowe and Rep. David Dreier to quit Congress are part of a broader trend: the ideological “purification” of the Republican Party at all levels. Moderates have become persona non grata in the GOP, with a whopping 71 percent of Republicans now identifying as either very conservative or conservative.
“This explains why the avowedly moderate Jon Huntsman never got traction in the GOP nominating race, and why the erstwhile moderate Mitt Romney is now pretending to be “severely” conservative. The absence of moderates’ restraining hand is evident in Virginia, where the GOP-controlled legislature has passed a bill forcing pregnant women to get ultrasound procedures before they can have an abortion.”
This week in housing was an especially busy one; PPI looks at just a few highlights with Case-Shiller numbers, a new government pilot program on housing and a huge announcement from Bank of America. Let’s get to it.
1. S&P Case-Shiller, the leading Index of national housing values, came out on Monday. The December data continued to highlight what is clearly the biggest drag on a recovery that is trying to find its footing, declining home values. Case Shiller’s latest numbers showed the composite of the three indices (national, 10 cities, and 20 cities) was down 3.8 percent for the fourth quarter of 2011 and were the lowest numbers for the popular Index since the crisis began in 2006.
In related “Index” news, PPI released the first edition of the “PPI Battleground Home Values Index” last week. The Index looks at home values since the 2008 election in 16 battleground states.
The Republican presidential nomination contest reached another milestone yesterday with two more major primaries, in Arizona and Michigan.
The delegate “haul” in both states was reduced by half, since they violated the RNC’s calendar rules by holding their primaries before March 1. But since these primaries were the first events to occur after Rick Santorum’s three-state sweep on Feb. 7, and because Santorum had risen rapidly in both national and Michigan polls since then, they became something of an existential threat to the Romney campaign. Indeed, prior to the results the air was full of panic-stricken, if largely anonymous, claims that party leaders would have to recruit a late-entry candidate if Romney failed to win in Michigan, his native state.
PPI President Will Marshall, explains why the U.S. must lead on Syria over at CNN’s Global Public Square:
“Syrians are making an obstinate and brave stand against Bashar al Assad, who is pulling out all stops to crush popular resistance to his regime. They deserve more help from the international community – with America in the lead.”
“The Obama administration sympathizes with the uprising, of course, but its policy toward Syria is defined mainly in the negative. The White House has been emphatically clear about what it won’t do: join in a Libya-style military intervention aimed at toppling Assad. In light of recent history, it’s understandable that Obama wants to extricate the United States from Middle East mayhem, not get stuck in yet another conflict there.”
In these 16 states, home prices are down an average of 16 percent since October 2008—from a median of $160,596 to a median of $131,191 in December 2011.
The states included in the PPI analysis are among those hardest-hit by the housing crisis: Nevada, New Mexico, Arizona, Virginia, Ohio, Wisconsin, Michigan, Iowa, New Hampshire, Indiana, Colorado, Florida, Missouri, North Carolina and Pennsylvania.
PPI’s analysis is based on data derived from Zillow and the U.S. Census Bureau. The overall median home value for the battleground states is a weighted average based on the proportion of housing units in that state.
China may look like an unstoppable economic juggernaut, but it is increasingly beset at home by worker protests and strikes. Last June, for example, security officials in Zengcheng, a manufacturing city in southern China, fired tear gas at hundreds of migrant workers who smashed windows and overturned police cars after hearing the rumor that authorities had pushed a pregnant migrant street vendor to the ground.
Spreading labor unrest in China has large economic as well as political implications for Sino-American relations. Put simply, stronger rights for Chinese workers is good for America’s bottom line. By explaining our economic interest in empowering China’s workers, U.S. leaders could galvanize broad public support behind a more insistent push for individual and civil liberties in China. Too often, however, they fail to make that connection. They may deplore the way China arbitrarily limits speech and imprisons lawyers,
human rights watchdogs, religious leaders, and worker advocates. But they rarely note that empowering China’s workers would likely lead to higher wages and benefits, and therefore a shrinking labor cost advantage over U.S. competitors.
In this paper, I explore the vital link between the rights of Chinese workers and the competitive health of the American economy. If a nation has lax labor laws, or has good ones but doesn’t enforce them, local employers can keep wages down and produce goods at much cheaper cost. Moreover, if workers are unable to strike or effectively petition their employers because the legal system doesn’t guarantee freedom of speech and association, then their country is essentially subsidizing its companies, giving them an unfair advantage in the global economy.
Indeed, inconsistent labor law enforcement, inattention to workplace safety, and violations of binding legal contracts (such as wage agreements) have enabled Chinese manufacturers to hold down the price of Chinese labor. The labor cost differential, of course, is the main reason Chinese goods are significantly cheaper, even after they have been shipped to the United States. Raising labor standards in China will inevitably lead to raising the price of Chinese-produced goods, making goods produced by U.S. workers more competitive. That’s why strong U.S. support for the rights of China’s workers should be an integral part of Washington’s strategy of constructive engagement with Beijing. Not only is it the right thing to do from a human rights standpoint, it is also clearly in America’s economic interests as we seek a more balanced commercial relationship
with China.
More specifically, let me offer seven recommendations for U.S. policymakers:
Put human and worker rights at the center of U.S. diplomacy toward China.
Raise public awareness of the link between workers’ rights in China, and economic benefits for Americans.
Work closely with other liberal democracies to demand China’s adherence to its own labor laws and international standards.
Expand bilateral working groups on labor rights, so that these issues come up routinely in Sino-American relations.
Fund civil society groups that promote and defend workers’ rights.
Use trade as leverage to achieve progress on workers’ rights.
Ratify two key International Labour Organization protocols: the Freedom of Association and Protection of the Right to Organise Convention (1948), and the Right to Organise and Collective Bargaining Convention (1949). In advocating rights and liberties around the world, the U.S. must also lead by example.
PPI Chief Economic Strategist Michael Mandel, explains in The Atlantic how innovative developments in the App Economy provide important lessons for the whole economy:
“Android, apps, iPhones, Angry Birds, iPads, FarmVille, data contracts: It’s a bit jarring to realize that these terms, so familiar today, only date back five years. The introduction of the iPhone in 2007, and the initial distribution of Android the same year, marked the birth of the App Economy.
“But the App Economy didn’t just mean more fun games and more ways to do work on the go — it meant more jobs as well. Based on research I did for Technet, the association of high-tech innovative companies, the App Economy has generated nearly 500,000 jobs since 2007. This is an impressive total, especially during the worst labor market downturn since the Great Depression. It’s also an indication of the growing macroeconomic impact of the App Economy.
“We can draw three lessons from the success of the App economy to help us understand how we can drive prosperity forward.”
A February 2012 paper by PPI Chief Economic Strategist Michael Mandel estimated that the App Economy has generated almost 500,000 new jobs since 2007. Mandel wrote:
“The incredibly rapid rise of smartphones, tablets, and social media, and the applications—‘apps’—that run on them, is perhaps the biggest economic and technological phenomenon today…On an economic level, each app represents jobs—for programmers, for user interface designers, for marketers, for managers, for support staff….
…App Economy employment also includes app-related jobs at large companies such as Electronic Arts, Amazon, and AT&T, as well as app ‘infrastructure’ jobs at core firms such as Google, Apple, and Facebook. In addition, the App Economy total includes employment spillovers to the rest of the economy.”
The growth of App Economy employment is a bright spot in an otherwise sluggish labor market, showing how innovation is still the best job creator.
So how then can Washington best encourage the continued growth of the App Economy? The absolutely essential ingredient for the App Economy is spectrum. By spectrum, we are referring to the radio frequencies which carry the streams of data to our smartphones and tablets. And as apps get more and more sophisticated and indispensable, our mobile data needs grow rapidly, and we face the danger of a spectrum crunch.
That means there’s a great need for the Government, which controls spectrum licenses, to free up additional spectrum if App Economy employment – and future mobile service innovation – is to grow. Last week, Congress authorized the Federal Communications Commission (FCC) to organize a “voluntary incentive auction” for unused, or underused, spectrum. The FCC is working with TV broadcasters to sell their unused and underused spectrum in an auction format to commercial wireless broadband providers that need more spectrum for wireless network and capacity extension. The winning bidders are likely to be mobile service providers and the current broadcast license owners will receive a share of the selling price. This auction is part of a plan by the Obama Administration to sell 500 megahertz of spectrum over the next 10 years.
However, as part of last week’s legislation, Congress also gave the FCC the authority to establish general applicability rules for the auction regarding the amount of spectrum any one company can hold. In other words, the FCC has the ability to restrict which companies can participate in the auction, if the participant owns more spectrum than the FCC deems eligible. Unfortunately, the FCC appears to be working under the assumption that only the larger mobile service providers will obtain spectrum at auction, out-bidding smaller rivals.
But at a time when the App Economy is creating jobs at a rapid pace, the FCC should not try to dictate who should or should not be allowed to buy spectrum. The key to making the voluntary auction a success is ensuring that spectrum is awarded to the companies who can get it to consumers as quickly and efficiently as possible, who have the resources now to invest in new innovations, creating jobs and boosting the economy in the process. And the economic potential of spectrum innovation is great. A recent study by Robert Shapiro and Kevin Hassett calculates that over 1.5 million jobs were created over 2007-2011 from wireless providers’ switch from 2G to 3G.
Which companies are best suited to get spectrum innovations to market quickly and effectively? A December 2011 policy brief from PPI, “Scale and Innovation in Today’s Economy,” shows that larger companies with a national reach may be the best placed to quickly move innovations through development into the hands of consumers. Larger companies have the resources readily available and the platforms needed to implement large-scale innovations to a national wireless network. What’s more, smaller carriers increasingly depend on the ability of larger companies to effectively move wireless network innovations to scale to provide their customers with better service.
It may be at least a year or more before the FCC implements the new legislation, and many more years before an auction takes place. Until then, mobile service providers will be forced to work within their existing spectrum, and hopefully will continue to find new ways to make spectrum more efficient. Indeed, mobile providers have already invested billions to increase the data-carrying capacity of existing spectrum. For example, in 2011, AT&T introduced 4G, the fourth generation of high-speed wireless communication, to its mobile services which is 50 percent more efficient than its 3G predecessor.
While such efficiency-boosting advancements are very important to the future of spectrum, and to the future of the App Economy, the only long-term solution is to get as much spectrum to market as possible, as quickly as possible. And given the clear importance of the App Economy for driving growth, making sure the FCC conducts spectrum auctions the right way – by not restricting eligible participants – is critical for creating tomorrow’s jobs and ensuring a strong economic recovery.
The GOP nomination contest has entered its most critical two-week period yet, with primaries in Michigan and Arizona on February 28; the Washington caucuses on March 3, and then the eleven-state extravaganza of Super Tuesday, March 6.
With Rick Santorum now holding a steady lead over Mitt Romney in national polls of Republicans, it is crucial for Romney that he win his native state of Michigan to regain momentum, reassure party elites, and replenish his diminished financial coffers.
Romney and his Super-PAC are reportedly outspending Santorum’s forces in Michigan by about a 3-1 margin, and are fielding a mix of positive and negative ads. An early PPP poll showing Santorum sprinting out to a 15-point lead in Michigan now looks to be an outlier; PPP’s latest survey in the state shows Santorum only up by three points, and at least one other poll shows Romney regaining a small lead. Everyone agrees the contest is very close, with support patterns indicating Santorum holding his customary leads among evangelicals and “very conservative” voters, and Romney doing well with “moderates” and Tea Party skeptics. Polling of Arizona (where Romney benefits from a sizable LDS vote) is also becoming available, uniformly giving Romney a single-digit lead. A wild-card in Arizona is that Newt Gingrich is doing relatively well there (unlike Michigan, where he’s running fourth behind Ron Paul); one theory is that his supporters could break to Santorum on primary day.
All of these dynamics make tonight’s CNN candidate debate in Arizona very important. It could, in fact, be the last televised debate of the entire contest. One possibility is that both panelists and the other candidates could gang up on Santorum, who’s been under attack as a “fiscal liberal” by his rivals, and as an erratic religious extremist by many news media observers. (In a potentially significant, and certainly unprecedented development, two conservative opinion-leaders considered supportive of Romney, Matt Drudge and Washington Post blogger Jennifer Rubin, have suddenly begun attacking Santorum’s religion-based views on cultural issues). Santorum, who’s been a relatively strong debater, could try to duplicate Gingrich’s successful tactic of turning attacks on his tormenters. And of course Gingrich himself, not to mention Ron Paul (who’s shown recent interest in going after Santorum) will be factors as well. It would be a particularly poor moment for any candidate to commit a gaffe.
If February 28 produces anything less than a dual Romney win in Michigan and Arizona, Super Tuesday could become dicey for Mitt (it is generally assumed Santorum is likely to win the March 3 caucuses in Washington). He’s beginning to experience money troubles thanks to his heavy spending and his lack of an ideologically-driven small donor base. Romney does have some Super Tuesday advantages: his home state of Massachusetts votes then, and he and Ron Paul are the only candidates on the ballot in Virginia.
The most alarming threat to Romney would be a divide-and-conquer strategy where Santorum concentrates on the biggest prize, Ohio, while Gingrich’s Super-PAC spends the fresh $10 million it has reportedly received from casino mogul, Sheldon Adelson, to focus on Georgia, Tennessee and perhaps Oklahoma. Additionally, Paul is expected to concentrate on small-state caucuses where he could do additional damage to Romney’s delegate count.
There are also new rumblings of discontent from elite Republican circles where a Santorum (or Gingrich) nomination is considered potentially catastrophic, while Romney’s perpetual inability to win over conservative voters or show much appeal to independents is perpetually troubling. One “prominent Republican senator” informed a reporter last week that if Romney loses Michigan, he will go public with a call for a draft of Jeb Bush. While there’s zero evidence Republican voters are interested in a late entry or a “brokered convention,” or that any particular “white knight” could avoid the pitfalls that have snared the actual candidates, it is obvious Romney would suffer from major defections of elite party support, if only among his funding sources.
All in all, it would be very prudent for Romney to win Arizona and Michigan next Tuesday. If he loses both, the craziness will really intensify and almost anything could happen. Alas, it just keeps getting better and better for President Obama.
PPI’s executive director and former DNC finance director, Lindsay Lewis proposes that the best way to reform campaign financing might be to repeal the McCain-Feingold campaign finance reform law. As Lindsay argues, McCain-Feingold inadvertently led to the creation and now dominance of super PACs.
PRESIDENT OBAMA’s recent endorsement of a Democratic “super PAC” — Priorities USA — that will support his re-election campaign makes one thing clear: money will dominate this year’s election like no other in history. Already, Restore Our Future, the super PAC supporting Mitt Romney, has hauled in over $17 million from just 60 donors.
Big money has always played a role in politics, but the advent of super PACs means that America’s presidential candidates have effectively outsourced their campaigns to the megarich. The wealthy turn over big bucks to super PACs, which in turn make whatever arguments they want, often much dirtier than anything a candidate would want to attach his or her name to.
The Republican presidential nominating contest continues to produce endless surprises.
A week ago, the key question was whether victories in two low-turnout caucuses and a “beauty contest” primary would vault Rick Santorum past Newt Gingrich as the latest aspirant to the conservative-alternative-to-Romney mantle. Now, cascading evidence from polls suggest Santorum has become a serious threat to Romney’s status as front-runner, and is a couple more primary wins away from becoming what might be called an existential threat to Mitt’s candidacy.
National polls are now consistently showing Santorum leading, or essentially tied with, Romney among Republican voters. More alarmingly for Romney, the three latest polls taken in Michigan—whose primary will be held on February 28—show Santorum leading there, too, despite a longstanding assumption that Mitt would romp to an easy win in his native state.
While there has been no recent public polling in Arizona, which also holds its primary on February 28, the Santorum Surge has clearly spread to the Super Tuesday (March 6) states. A Quinnipiac poll, for instance, now shows him leading in that day’s biggest state, Ohio, and another survey indicates he’s threatening Newt Gingrich in his own home state of Georgia. An especially dangerous development for Romney is that Santorum is now running ahead of Mitt in at least one major general election poll, calling his longstanding “electability” advantage into question.
All the polls indicate that a key ingredient of the Santorum Surge is relatively high favorable/unfavorable ratios, reflecting his ability to escape significant questioning while Romney and Gingrich (and their super PACs) have pounded each other with negative ads. That is very likely to change, even though conservative opinion-leaders are far more protective of Santorum than of either Romney or Gingrich, and most will not join the fun the way they so often have with the other candidates.
Just today, reports have come out suggesting that Team Romney might execute a multi-state air war against Santorum, attacking him from the Right for votes in the Senate favoring No Child Left Behind and Medicare Rx Drugs. Despite the fact that both were Bush administration initiatives, supported by many Republicans at the time, these programs have now become symbols of big-spending heresy. That line of attack, however, is not all that’s on the horizon. There’s also at least one report that Gingrich’s main super PAC donor, casino mogul Sheldon Adelson, is on the brink of reopening his check book to finance attacks on Santorum, apparently in part because Adelson wouldn’t mind helping Mitt as well as Newt.
All this warlike activity on the GOP side is clearly good news to Democrats. It also comes at an opportune time, just as better economic news and a sharper Obama message has emerged to lift the incumbent’s re-election prospects notably. Obama has led Romney in eight consecutive major general election polls by at least five points. Even more significantly, according to an analysis yesterday by Ron Brownstein based on the latest Pew survey, Obama is now matching his 2008 performance very closely among nearly every key demographic category.
Obama’s stretch of good luck is also extending into individual controversies with the GOP. So far, at least, he seems to have regained an advantage in the battle with Republican politicians and the U.S. Conference of Catholic Bishops over a proposed employer insurance mandate for contraception coverage. A relatively small modification of the original mandate to require insurers rather than religiously-affiliated institutional employers won the administration praise from an array of Catholic hospital, social-services, and higher-education leaders, frustrating the efforts of the Bishops to speak for Catholic institutions in demanding a complete repeal of the mandate.
And while polling on the subject has varied significantly according to the timing and wording of surveys, it’s reasonably clear Catholic voters’ attitudes on the subject closely track public opinion generally. Meanwhile, as the controversy beings to focus less on broad claims of endangered “religious liberty” and more on attitudes towards the more specific issues of health insurance coverage, Republicans are running the risk of identifying themselves too closely with the Catholic hierarchy’s very unpopular views on contraception.
The current prominence of a presidential candidate, Rick Santorum, who has not been shy about proclaiming his own hostility to contraception, probably does not help – well, at least not the Republicans.
In 2010, the Supreme Court’s landmark decision in Citizens United v. Federal Election Commission forever changed the landscape of political spending.
The Court’s ruling to allow virtually unlimited contributions to outside political groups1 unleashed a record $290 million in outside spending in 2010 (not counting spending by party committees).2 According to the Center for Responsive Politics, total outside spending in 2010 on congressional races was more than four times the total outside spending in the last mid-term elections in 2006. And as the torrents of super PAC spending in the GOP presidential primaries attest, outside spending in 2012 is on track to break all records.
But does outside spending really “work” to put a favored candidate in power? With the jury still out on 2012, this memo looks to the Senate races in 2010 for some clues.
The answer? Maybe.
Because 2010 was a “wave” election that rode on Tea Party rage, it’s almost impossible to disaggregate the impact of outside spending from prevailing electoral trends. In addition, many other factors—such as the strength of a particular candidate’s appeal and organization—cloud the picture.
Nevertheless, in some campaigns, a big unmatched advantage in outside spending seemed to help tip the balance in a candidate’s favor. In 2010, this worked to the advantage of Republicans—conservative outside groups spent about twice as much on Senate races as liberal groups. Even though conservative groups spent millions of dollars more on losing races than on winning ones (e.g., in Nevada and Colorado), the sheer volume of conservative outside spending meant that their overall “batting average” was nearly twice that of liberal outside groups.
Given this mixed record, there’s only one real certainty about the impact of outside money on Senate races in 2010: Running for Senate is a lot more expensive than it used to be.
PPI President Will Marshall, explains the dire need to free American hostages being held in Cairo over at CNN’s Global Public Square:
“With deadly soccer riots, popular unrest and a tricky political transition to manage, you’d think that Egypt’s military rulers would have enough on their hands without provoking a confrontation with the United States. Evidently not.
“Everyone knows the generals call the shots in Egypt, but they profess to be powerless to stop Egypt’s courts for trying 19 Americans on trumped up charges of funneling “foreign funding” to anti-government protesters. This outrage demands a calm but resolute response from President Obama. While avoiding public statements that further inflame Egyptian nationalism, Obama should quietly make it clear to the Supreme Military Council that persisting in this folly will lead to a cut-off of U.S. aid.
PPI President Will Marshall breaks down the merits of the Wyden-Ryan plan for Medicare reform in Politico:
PPI President Will Marshall explains the significance of Senator Snowe’s surprise retirement for 
This week in housing was an especially busy one; PPI looks at just a few highlights with Case-Shiller numbers, a new government pilot program on housing and a huge announcement from Bank of America. Let’s get to it.
The Republican presidential nomination contest reached another milestone yesterday with two more major primaries, in Arizona and Michigan.
PPI President Will Marshall, explains why the U.S. must lead on Syria over at 
A February 2012 
The GOP nomination contest has entered its most critical two-week period yet, with primaries in Michigan and Arizona on February 28; the Washington caucuses on March 3, and then the eleven-state extravaganza of Super Tuesday, March 6.
The Republican presidential nominating contest continues to produce endless surprises.
PPI President Will Marshall, explains the dire need to free American hostages being held in Cairo over at