PPI Chief Economic Strategist, Michael Mandel, explains why the government should invest now to take advantage of historically low interest rates on treasury bonds over at CNBC:
Click HERE to watch.
Category: Uncategorized
Election Watch: The Republicans Gain Momentum
Mitt Romney crossed the 1,144 delegate threshold to officially claim the GOP presidential nomination via Texas’ May 29 primary. As planned, his campaign launched an attack on the president’s fiscal and economic policies, focusing initially on “failed stimulus projects” and then featuring a surprise visit by the candidate to the site of the bankrupt Solyndra facility, which received a $535 million “clean energy” loan guarantee from the DoE.
But the Romney “pivot” was overshadowed by bad publicity from his strangely timed, May 29 Las Vegas fundraiser, starring Donald Trump (at Trump’s Vegas hotel). The “Trump” made it vastly worse by releasing a barrage of statements reopening the Obama birth certificate “issue.” The big question today is whether the latest not-so-good news on the economic front—a BLS May “jobs report” showing a downward revision of the last two months’ jobs gains and an underwhelming 69,000 new jobs for May—will dominate the presidential campaign for the period just ahead.
Continue reading “Election Watch: The Republicans Gain Momentum”
Keep Drug Bill Pro-Innovation
PPI believes in the importance of smart regulation as part of a well-functioning economy. But we’ve also repeatedly advocated that regulation and legislation should aim to boost innovation, not get in its way.
Unfortunately, not all politicians in DC have gotten the message. Over the next couple of days Congress will be voting to reauthorize the Prescription Drug User Fee Act (PDUFA), which speeds up the process of reviewing new drugs by using fees collected from manufacturers.
On net, this is a pro-innovation bill which is strongly worth supporting. But it’s worth noting that one amendment, submitted by Senator Bernie Sanders (I-VT), would gratuitously undercut the incentives for innovation. The amendment, as I read it, would take away marketing exclusivity for a drug if a company was found guilty of any one of a long list of criminal or civil violations related to the drug, including illegal marketing.
Start-up 2.0: Another Welcome Boost for Entrepreneurs
Last month, Congress and the president passed major legislation (the Jumpstart Our Business Startups (JOBS) Act) aimed at making it easier for start-ups and small businesses to gain better access to capital. It was one of the few bills passed in the last year that wasn’t born out of crisis or in the shadow of a looming government shutdown.
This week, a bipartisan group of Senators has introduced a summer sequel worth watching in what they’ve dubbed “Startup Act 2.0.” This legislation would take one more big step in giving young businesses three crucial ingredients for success: talent, time and money.
Talent. Perhaps the most ambitious and creative proposal put forward by this group—Sens. Jerry Moran (R-Kan.), Mark Warner (D-VA.), Marco Rubio (R-Fla.) and Chris Coons (D-Del.)—is the creation of “STEM visas” for foreign students who come to America and earn advanced degrees in math or science, and “entrepreneur visas” for legal immigrants who start their own companies.
Continue reading “Start-up 2.0: Another Welcome Boost for Entrepreneurs”
Republican War On Economic Data is Anti-Business and Anti-Growth
The House Republicans appear to be conducting a war on economic data. They seem to think that defunding data collection is all gain and no loss.
In fact, the anti-data Republicans are really anti-business and anti-growth. Government spending on economic data collection should be thought of as fully equivalent to investment in long-lasting infrastructure. When we build highways or airports, we expect them to be used by the private sector for economically-valuable activities. Highways facilitate the sale and use of automobiles, the construction of homes, the transportation of goods. Airports make air transportation possible, fostering all sorts of jobs and growth.
Just like spending on highways and airports, government investment in economic data collection provides a long-lasting boost to private sector economic activity and to private sector growth. To give one very simple example: Political polling would be much more expensive and less accurate if the pollsters did not have access to government economic and demographic data. The government data enables the pollers to make sure their sample correctly represents the actual population.
Continue reading “Republican War On Economic Data is Anti-Business and Anti-Growth”
Election Watch: The Growing Impact of Super-PACS
This week’s major down-ballot contest was in Nebraska’s Republican Senate primary, where State Senator Deb Fischer came from far behind to beat the long-time front-runner, Attorney General Jon Bruning, along with “movement conservative” favorite, State Treasurer Don Stenberg.
Despite some media treatment of the outcome as another “conservative insurgent” victory over an “establishment moderate,” it’s not at all clear that ideology had much to do with Fischer’s victory. A late PPP survey (which very accurately predicted the outcome) showed Fischer drawing support from all ideological elements of the GOP, and benefitting from a loud and expensive Bruning-Stenberg slugfest that mainly focused on Bruning’s ethics and possible vulnerability against Democrat Bob Kerrey.
Continue reading “Election Watch: The Growing Impact of Super-PACS”
PPI Battleground Home Values Index: Home Values Tick Upward
We have had a bevy of economic and political “events” in the last six months that have focused on stabilizing home prices. The President’s efforts on refinancing are starting to pay dividends, and the major settlement between the attorneys general with five of the biggest mortgage servicers offered some order to a market process that previously bordered on chaos. Money from the settlement has started to flow to the states, even though there is a looming concern that some of those funds are being used to close budgetary holes instead of helping families.
This past week, the National Association of Realtors held their Mid-Year Legislative Meetings and on Tuesday, PPI helped to assemble a panel of experts to discuss on-the-ground issues and upcoming housing issues.
The government’s role in the future of housing and current regulatory uncertainty was the most discussed topic. All panelists agreed that Fannie Mae and Freddie Mac aren’t going anywhere anytime soon and their future existence, in whatever version they take, would be necessary for a 30-year fixed rate mortgage, which is currently 95% of all loans being made.
Continue reading “PPI Battleground Home Values Index: Home Values Tick Upward”
Stop the Uncertainty Surrounding Ex-Im Bank
Late yesterday marked a formal end to the two-year debate on whether the Export-Import Bank (Ex-Im), the U.S. export credit agency, deserves to live to see another day. (It does.) What was once a routine process for Ex-Im reauthorization was held back by congressional charges of corporate welfare by the Tea Party. But while the decision to reauthorize the Bank for another two and a half years is good, the fact that it took so long is not: at this rate negotiations for the next round will have to begin before this legislation is finalized. That is a heavy drain on congressional and Ex-Im Bank resources. One has to ask, is there a way to avoid the same extended debate next time around?
Yes, with a little more clarity on why two-year long ideological attacks on Ex-Im creates uncertainty that hurts U.S. companies and detracts from Ex-Im’s effectiveness. As someone who worked at the Bank for almost three years, I’d like to offer some of that clarity.
Continue reading “Stop the Uncertainty Surrounding Ex-Im Bank”
Dropbox, Google Drive, and the Consumer Price Index
I was looking at the April CPI this morning, and I got to thinking about Dropbox. I use Dropbox literally 25-50 times a day. I’m working on a file on my Apple laptop, save it to the Dropbox folder, and I can be sure that the same file will show up on my PC when I get home.
Dropbox costs me nothing for 2.5 GB worth of storage. More important, I’m getting a valuable service for nothing.
Now comes along Google Drive, which supposedly functions much the same way, and offers 5 GB of storage. Now, I’m not going to switch any time soon because Dropbox is working fine for me. But a reasonable interpretation here is that the “price” of seamless online storage has fallen.
Continue reading “Dropbox, Google Drive, and the Consumer Price Index”
Election Watch: Obama Makes History
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.
The Fine Art of Cabinet-Making: Five Ways to Build a Stronger Executive Team
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.
Choose-Your-Benefit: Can Citizens Help Save Social Security?
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
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
PPI 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
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).
Election Watch: The Political Cycle Heats Up
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”