PPI President Will Marshall explains why the U.S. should stop temporizing on Syria at Real Clear World:
“The tenuous ceasefire in Syria is a relief, but it also carries the risk that Bashar al Assad will manipulate the UN-sponsored truce to extend his lease on power. Russia, China and Iran favor that outcome; America shouldn’t. ”
“Yet Washington seems mired in ambivalence. On one hand, the Obama administration has called on Assad to step down. On the other, it has ruled out U.S. intervention and backed Kofi Annan’s UN-Arab League plan, which does not envision Assad’s departure, calling instead for regime-led negotiations with the resistance.”
“While Assad’s forces have stopped firing, they haven’t pulled back from population centers, as the Annan plan also demands. Resistance groups are planning street protests to test Assad’s supposed conversion to talks and reconciliation.”
In just the latest sign of how gridlocked Washington has become, Congress is currently failing to pass even the most reliable of legislative standbys: naming post offices and federal buildings.
For each of the last several Congresses, naming post-offices has been a staple of Congress’s work. In the 109th Congress, for example, 98 of the 482 laws passed by Congress—or 1 in 5—were post-office naming bills.
But so far, the current Congress has managed to name just 17 post offices and federal buildings, plus one national refuge (the “Sam D. Hamilton Noxubee National Wildlife Refuge”).
Rick Santorum’s withdrawal from the presidential race on Tuesday saved Mitt Romney and his friends many millions of dollars and additional heartburn from charges that he’s not a “true conservative,” and gave his campaign much more time to plan the convention and the general election. Even though Romney had the nomination all but locked, and might have knocked Santorum out of the race on April 24 with a big win in Pennsylvania, Santorum had a lot of incentive to stay in the race until May, when a bunch of primaries in states with large evangelical populations were to vote. One theory holds that the cold water the RNC poured on an effort by Rick’s allies in Texas to change that state’s delegate allocation from a proportional to a winner-take-all system was the clincher, since that was the only scenario under which Santorum might have denied Romney a majority of delegates.
The 2012 Retirement Confidence Survey recently released by the Employee Benefit Research Institute (EBRI) confirms that many U.S. workers know that they are not saving enough for retirement. Two-thirds of workers say they are behind schedule in saving for retirement and only 14 percent of workers are very confident that they are saving enough.
Moderate and lower-income Americans make up a disproportionate share of the workers who are “under-saving” for retirement or not saving at all. While 93 percent of Americans with annual household income above $75,000 report having some savings for retirement, just 35 percent of households with income below $35,000 have any retirement savings. Moreover, the EBRI survey shows that higher-income households are more likely to consult with professional financial advisers, more likely to have determined how much savings they need to accumulate, and more likely to use online technologies to help manage their financial accounts.
PPI President Will Marshall examines whether the Marlins caved to political pressure in Politico’s Arena:
“Baseball managers are entitled to the same Constitutional rights as anyone else. Period, full stop.”
“In fact, we ought to call an end to the all-too-common ritual of public humiliation, confession and absolution that follows whenever some celebrity says something stupid or offensive. It’s the closest thing our supposedly free society has to a totalitarian show trial.”
“To profess admiration for a tyrant like Castro – or a tyrant’s groupie like Hugo Chavez – is certainly obnoxious. But so is the idea that protecting people against “hurtful” speech, insults or foolish ideas should take precedence over free speech.”
Tuesday’s primaries in Wisconsin, Maryland and D.C. were a clean sweep for Mitt Romney, who also won 86 of the 95 pledged delegates at stake in the three states.
According to everybody’s estimates (other than those of the Santorum campaign), Romney is now well over half-way to the goal of the 1144 delegates needed to win the GOP nomination. An especially credible estimate made by Ryan Lizza, Josh Putnam and Andrew Prokop for The New Yorker even before Tuesday’s votes were counted showed Romney as certain to get very close to the magic number at the end of the contested primaries, needing only a tiny sliver of the unpledged delegates to get over the top. At worst, Mitt’s in the situation Barack Obama faced late in the 2008 Democratic contest, when the only scenario that could have prevented his nomination was an unlikely and almost unanimous revolt among unpledged super-delegates. But any such comparison suggests that Rick Santorum could have Hillary Clinton’s staying power and ability to win heavily in late primaries, and that’s more than a stretch.
From a more practical perspective, the question going into the April 2 primaries was whether Santorum could somehow survive until May, when a string of southern and midwestern primaries could provide him with the sort of demographic landscape in which he has done well so far. But even if that happens, the June calendar represents a Romney firewall of delegate-rich primaries in New Jersey, California and Utah that now look likely to officially put the front-runner over the top–that is, even if Santorum fights on to the bitter end.
PPI President Will Marshall and PPI Senior Fellow Jason Gold critique the Republican candidates failure to address the country’s lingering housing crisis at the Las Vegas Sun:
If the Republican presidential candidates have any ideas for solving America’s housing crisis, they aren’t sharing them with the voters. Since leaving behind February primaries in Nevada, Florida and Arizona, the GOP’s final four have virtually dropped the subject.
That’s puzzling, because housing remains a top concern for U.S. voters. Some 12 million homeowners remain underwater and 4 million are delinquent on their loans or in foreclosure. The ongoing drop in home prices is the single biggest drag on economic recovery. As catastrophic as it is to lose a job, the percentage of Americans who are unemployed is actually exceeded by the percentage of Americans who have either lost significant wealth from their homes or are drowning in “negative equity.”
Yet the primary debate has fixated on such evidently more urgent issues as contraception, Obamacare, gas prices, Obamacare, porn, and, of course, Obamacare (which doesn’t actually take effect until 2014). Why have the Republicans clammed up on housing?
The late economist Mancur Olson would have been a fan of Jonathan Ames. Ames is the creator of the HBO series Bored to Death as well as the eponymous protagonist, an aspiring novelist who moonlights as a private investigator. Olson may have enjoyed the ensuing hijinks, but he would have seen a larger economic lesson in the show.
In his classic book, The Logic of Collective Action, Olson demonstrated that small groups are usually more efficient and effective at achieving collective ends than large groups. Despite the narrower interests they represent, small groups find it easier to engage in coordinated behavior and achieve group ends, even when those ends may work against the interests of the larger society. Today, this “logic of collective action” can be seen in the spread of professional and occupational licensing. Whereas in the 1950s only five percent of the American workforce was subject to such licensing, it currently stands at nearly one-third. What this means is that, to enter certain professions and occupations, individuals must attain minimum levels of education and training and, often, pass exams to demonstrate their competency to practice.
PPI’s executive director Lindsay Lewis, and PPI Fellow Jim Arkedis, explain how conservative super PACs will likely wage a voter suppression war in November over at the New York Times:
The grip of the super PAC on the Republican primary season has been well-documented. They are wrecking balls operating outside the candidates’ direct control, fueled by massive influxes of cash from a handful of wealthy patrons. The millions spent by the pro-Santorum Red, White and Blue Fund and the pro-Gingrich super PAC, Winning Our Future, have prolonged their respective candidates’ rivalry with the front-runner, Mitt Romney, whose own Restore Our Future has bludgeoned the competition from Iowa to Florida to Michigan.
And that’s just the start. In the general election, super PACs will evolve into full-blown shadow campaigns. This transition is already underway, with the super PACs supporting Republican candidates beginning to take on voter persuasion operations — like sending direct mail and making phone calls — that have traditionally been reserved for a campaign operation or party committee.
The phenomenon won’t be isolated on the right. President Obama recently embraced the outside groups that he had rejected, saying that he would not unilaterally disarm. The president has dispatched one of his most trusted aides to run Priorities USA, the White House’s super PAC of choice.
On one level, Rick Santorum’s campaign got a desperately needed boost from his win in Louisiana’s primary last Saturday. But all the other signs about the campaign indicate a party ready to end the primary season.
Santorum got his ideal electorate in Louisiana, a low-turnout affair in which half the voters were self-identified “very conservative” voters, and half called themselves “strong supporters” of the Tea Party movement. Two-thirds say they attend worship services weekly or more.
Just as importantly, Newt Gingrich, who was running very well in Louisiana polls not that long ago, saw his support-levels shrink along with his campaign budget.
In the last six months, President Obama has rolled out a series of proposals to address America’s still ailing housing markets. Elevating housing on the White House priority list is a welcome if belated development—one PPI called for in a major conference on new housing solutions we cosponsored last fall.
To assess the administration’s new proposals, we should start by clearly defining the central problem that must be solved. Contrary to media accounts, it’s not foreclosures, abandoned homes or underwater borrowers. These are all symptoms of a deeper malady: declining home prices. So the question we should ask is whether the President’s new flurry of ideas will move the needle on prices.
When it comes to manufacturing, most politicians, economists, and journalists agree: the millions of manufacturing jobs lost in recent years are mostly not coming back. Looking at the official data, it’s easy to understand why. Productivity in the sector has continued to climb even as jobs dwindled, so it must be the case that these jobs were lost to good old human ingenuity.
But this conclusion is derived from faulty official data. Indeed, a closer look at the numbers reveals an entirely different history on what happened to U.S. manufacturing.
Specifically, this paper shows that rising imports play a much larger role in the loss of jobs since 2007 than official data suggests. In fact, we estimate that rising real imports are responsible for approximately 1.3 million of the jobs lost between 2007 and 2011, or almost one-third of total private non-construction job loss.
We reached the estimate of 1.3 million jobs through a process that adjusts for for measurement problems in the official statistics. This adjustment is based on a concept called the “import price bias,” which causes the government to undercount the growth of low-cost imports from countries such as China. After adjusting for the import price bias, our analysis suggests that the import growth of goods, adjusted for price changes, have been underestimated by roughly $117 billion since 2007 (in 2011 dollars).
Moreover, we find undercounting real imports leads to a distortion in most of the official statistics that keep track of economic activity, including real GDP, which was overstated during the Great Recession and subsequent recovery by 0.8%. Our analysis suggests imports of low-cost goods continued to expand their presence in U.S. markets during this period, a phenomenon that likely started in the early 2000’s when developing countries such as China significantly boosted their exporting presence.
In this paper we also discuss how these revised statistics might affect the economic and political landscape going into the 2012 election. Specifically, President Obama’s recently announced “insourcing” initiative has the potential to recover some portion of the 1.3 million jobs lost to rising imports. By comparison, current policies like the payroll tax break are more likely to leak overseas than we realize instead of stimulating demand at home.
Understanding the true effect of rising imports on jobs better explains the everyday reality of Americans who are struggling through a weak job market and stagnant real wages. This is especially true in key states such as Ohio, North Carolina and Pennsylvania, where voters know that jobs have been lost to foreign competition.
In the end, sustainable economic growth and the creation of tomorrow’s jobs cannot be achieved through the consumption, debt driven economy of the past few decades. Instead, we advocate more of the pro-investment, pro-manufacturing policies recently introduced by the Obama Administration, such policies shift America toward a “Production Economy” which emphasizes investment in physical, human, and knowledge capital. Understanding the true role of imports in the U.S. economy, we can design better, more targeted economic policies.
“We have a huge opportunity, at this moment, to bring manufacturing back…but we have to seize it.” With these words in his State of the Union address, President Obama signaled that he is getting serious about recapturing factory jobs that have been lost to imports. Since the speech, the White House has outlined a series of policy measures intended to encourage companies to ‘insource’ jobs from overseas, including changes in the tax code and increasing domestic investment.
True, many economists, both liberal and conservative, are skeptical that much can be done to bring back manufacturing jobs. They argue that American factories have become so efficient that they no longer need to hire many workers. “It’s totally implausible to think that there’s going to be a surge in manufacturing jobs,” Lawrence F. Katz, an economist at Harvard who served in the Clinton Administration, told the New York Times. Christina Romer, former head of Obama’s Council of Economic Advisors, recently wrote in the New York Times that “a persuasive case for a manufacturing policy remains to be made.”
But this skepticism about President Obama’s manufacturing initiative relies on faulty official data. In fact, government statisticians are dramatically undercounting the economic impact of imports from low-cost countries such as China, as we will explain, in this paper and the accompanying policy memo, “Trade-related Jobs Lost During the Great Recession.” The reason for this statistical problem is an important economic concept known as “import price bias.”
After doing a preliminary adjustment for import price bias, we find that 1.3 million jobs have been lost to rising imports since the recession started in 2007, accounting for one-third of the private nonconstruction job loss. Many of these are jobs that could potentially be brought back to this country by appropriate incentives that encourage investment and job creation in the U.S. We therefore conclude that President Obama’s manufacturing initiative, combined with other “pro-production” policies, can potentially be a significant source of domestic jobs.
We arrive at this hefty figure by adjusting the official data on trade and domestic production for low-cost imports, which are incorrectly treated in the national income accounts. Correcting for this import price bias, we find that nonpetroleum imports rose by $131 billion from 2007 to 2011, adjusted for price changes, rather than the meager $14 billion rise in imports that the official data shows (measured in 2011$).
This uncounted import growth helps explain why federal stimulus measures did not generate as many jobs as expected. In fact, a hefty slice of fiscal stimulus—both tax cuts and spending increases—leaked overseas, boosting imports rather than domestic production. This leakage, in turn, explains why Obama’s manufacturing strategy is so necessary. We need to reinforce domestic production in order to reaffirm the strength of the economy.
Let’s be clear here: We are not saying that manufacturing is the only form of production, or that globalization is bad. For example, the immense flowering of the creativity in the wireless/social media/communication sectors are clearly a form of 21st century production. The App Economy—the development and use of apps designed for smartphones and social media—has created nearly 500,000 jobs since the first iPhone came out, and will continue to create more.
Second, we’re also not saying that trade is the only cause of job loss. Clearly one impact of information technology has been to massively transform industries such as retailing, reducing the number of workers needed.
However, the U.S. cannot afford to be in a position of perpetually consuming more than it produces. We need to make the shift from a consumption economy to a production economy in order to assure long-term prosperity.
Advances in drilling and recovery technologies for shale gas have reshaped our assumptions about America’s natural gas resources and our future energy options. Expanded development of shale gas and its associated liquids offer the potential for turning energy scarcity into plenty, fostering a renaissance in our petrochemical and manufacturing sectors, and offering a cleaner option for power generation.
If shale gas production realizes its potential of providing reliable supplies of natural gas for decades at affordable prices, it will lower utility bills for households and, by driving down feedstock and production costs, boost American manufacturing. In addition, greater use of natural gas in electricity generation is already providing environmental and climate benefits as a cleaner, market-friendly substitute for coal and as a complement to intermittent renewable resources like wind and solar.
In his 2012 State of the Union address, President Obama gave his strongest endorsement yet to shale gas. “The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don’t have to choose between our environment and our economy,” he said, adding that his administration “will take every possible action to safely develop this energy.”
But as the president’s remarks suggest, safety, and sustainability are key. For as gas production rises, so too does controversy over the environmental impact of shale gas development. Amid claims and counterclaims about its dangers from environmentalists and gas producers, hydraulic fracturing (“fracking”) has be-come a household word. The public is being bombarded with negative images of shale production, from media reports of an earthquake in Ohio attributed to hydraulic fracturing, to flaming water faucets in the movie Gasland.
In response to real and imagined dangers, there is growing political pressure to regulate production at both the state and federal levels. Some states, including New York, Maryland, and New Jersey, already have limited shale development. Environmental concerns also have inspired proposed legislation in Congress and prompted federal agencies to take tentative steps toward new regulations.
Mitt Romney’s solid win in Illinois on Tuesday placed him in an arguably unstoppable position for the GOP presidential nomination. He could claim formal victory perhaps as early as next month, and certainly, barring major mistakes, by June.
Along with his sweep of delegates in Puerto Rico, and the majority of delegates he claimed the previous Tuesday even as Rick Santorum got the headlines, Romney’s prize of 43 (out of 54) delegates in Illinois gives him a grand total (according to CNN’s estimates) of 562 out of 1019 delegates awarded so far; Santorum is more than 300 delegates behind. The “magic number” to clinch the nomination formally is 1144. Louisiana holds its primary this Saturday, and Santorum is a slight favorite; a loss could boost Romney’s sense of “inevitability” considerably. But in any event Romney seems certain to enjoy a big April, with very likely wins in DC, Maryland, Rhode Island, New York and Connecticut, and at least even odds in Wisconsin. Santorum’s home state of Pennsylvania is also on the April calendar, but he’s hardly a cinch there, and the proportional allocation rules will limit his gains.
President Obama has proposed a National Infrastructure Bank, a simple declarative sentence that left most listeners wondering what he meant. The confusion arises partly because the administration did not follow up the president’s remarks with a specific proposal, but also because the operations of such a bank have never been fully fleshed out. Felix Rohatyn and I have elsewhere laid out the broad outline of how such a bank would function,1 and that description serves as a good starting point for our expectations regarding the president’s proposal and what Bank-type proposals generally ought to do.
As many writers have noted, American infrastructure is depreciating rapidly – we are likely well below the replacement rate of investment in roads, mass transit, airports, ports, rail, and water assets. The logical implication is that we need to invest more. But more investment in and of itself will not move us towards having the right mix of infrastructure assets in place.
The current mix results from one of two selection processes. The first is devolution to the states (for example the cost-sharing grants delivered by the Highway Trust Fund), and the second is selection by Federal agencies (e.g., the Corps of Engineers). At worst, these processes lead to politically motivated outcomes, either because state governments favor some projects for wholly non-economic reasons, or because the Congress can muscle the selection process from the federal agencies. The most recent transportation authorization bill, passed in 2005, made the word “earmark” famous by incorporating a stunning $24 billion of them – the price of having a law passed. Insofar as we have given the task of project selection to the political process, it would be surprising if this kind of event didn’t happen, not that it sometimes does.
Politicized project selection is one of several problems associated with the current process. But it is one of the reasons why a National Infrastructure Bank is so important and so urgently needed: not just because a bank might be able to lever federal dollars, but because it can use the existing dollars more wisely and obtain a higher public return.
What follows, then, is a description of the role a National Infrastructure Bank could play, taken from the perspective of the specific problems in the current process it might solve. This perspective also allows us to evaluate the administration’s proposal.
In a nutshell, Rohatyn and I propose that we collapse all of the federal “modal” transportation programs into the Bank. Any entity – whether state, local, or federal – would have standing to come to the Bank with a proposal requiring federal assistance. The Bank would be able to negotiate the level and form of such assistance based on the particulars of each project proposal. It could offer cash participation or loan guarantees, underwriting or credit subsidies, or financing for a subordinated fund to assure creditors. Any project requiring federal resources above some dollar threshold (on a credit scoring basis) would have to be approved by the Bank. Additionally, we imagine that some part of the funding for existing modal programs would be converted into block grants sent directly to the states and large cities to be spent on projects too small for the Bank’s oversight. Such grants could also be used for those programs desired by the states that do not pass muster on terms proposed by the Bank.
This is more a vision of infrastructure policy than a blueprint for the immediate future. Admittedly, it will take years and a meticulous reorganization to produce this configuration. But the best way to measure our progress in infrastructure policy (and the merits of the administration’s proposal) is not to see how quickly we adopt the Bank’s specific features, but to see how the Bank addresses the underlying infrastructure policy flaws it is designed to fix.
PPI President Will Marshall explains why the U.S. should stop temporizing on Syria at Real Clear World:
In just the latest sign of how gridlocked Washington has become, Congress is currently failing to pass even the most reliable of legislative standbys: naming post offices and federal buildings.
So it’s finally, incontrovertibly over.
PPI President Will Marshall examines whether the Marlins caved to political pressure in 
Tuesday’s primaries in Wisconsin, Maryland and D.C. were a clean sweep for Mitt Romney, who also won 86 of the 95 pledged delegates at stake in the three states.
On one level, Rick Santorum’s campaign got a desperately needed boost from his win in Louisiana’s primary last Saturday. But all the other signs about the campaign indicate a party ready to end the primary season.
In the last six months, President Obama has rolled out a
Mitt Romney’s solid win in Illinois on Tuesday placed him in an 