Category: Uncategorized

New PPI Report Debunks Claims That Institutional Investors Drive Housing Crisis

Posted on by Alex Terr

WASHINGTON — In the debate over rising U.S. housing costs, large institutional investors are frequently cast as the primary culprits. Indeed, President Donald Trump is threatening to derail bipartisan legislation unless it includes a ban on institutional investors.  Against this backdrop, a new report from the Progressive Policy Institute (PPI) finds that institutional investors — large entities such as pension funds, insurance companies, and private equity firms — account for just 1% of single-family home purchases and recommends that policymakers improve affordability by other means.

The report, titled “Institutional Investment in Single-Family Housing: Separating Fact from Fiction,” shows that while politicians claim that institutional investors are driving the housing crisis, their footprint in the single-family market remains small. Authored by Richard Kahlenberg, PPI’s Director of Housing Policy and the American Identity Project, and Colin Mortimer, PPI’s Senior Director of Partnerships, the report calls on lawmakers to address the real issues impacting the housing crisis, including zoning reform, expanding housing supply, and reducing restrictive “Not In My Backyard” (NIMBY) barriers.

“Housing is unaffordable because we haven’t built enough homes, not because institutional investors are buying them up and pricing out Americans,” said Kahlenberg. “Blaming Wall Street may be politically convenient, but it distracts from the real problem: decades of restrictive zoning and supply constraints.”

To address the housing crisis effectively, the report recommends lawmakers enact legislation that:

  1. Streamlines permitting requirements in order to increase housing supply
  2. Loosens exclusionary zoning restrictions in order to build more multifamily housing
  3. Modernizes manufactured and modular housing rules in order to lower construction material costs

The report also assesses that institutional investors can play a constructive role in expanding housing opportunities for working class families. Unlike many small landlords, institutional investors bring professional management, renovate older homes, and add new single-family rental homes to the market.

“Institutional investors, in their small capacity, provide working Americans opportunities to live in better neighborhoods that they couldn’t access before, including better schools, safer streets, and greater economic opportunity,” said Mortimer. “Lawmakers cannot ignore those very real benefits in favor of political posturing.”

Read and download the report here.

Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @PPI.

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Media Contact: Ian O’Keefe – iokeefe@ppionline.org

What’s Going on with Credit Scoring Rules?

Posted on by Alyssa Brown

Newly released documents from a Freedom of Information Act (FOIA) filing by the Housing Policy Council show that in 2022, Fannie Mae and Freddie Mac were resistant to adding VantageScore 4.0 and skeptical about shifting to a single credit report (because it is less predictive of creditworthiness than requiring two or three). 

PPI has long argued that competition in credit scoring is a good thing. But because VantageScore is owned by the three credit reporting agencies, there is potential for a conflict of interest, and these agencies could use their collective influence to the use of a less accurate credit score.

The FOIA requested documents highlight that Fannie and Freddie recommended that the Federal Housing Finance Agency (FHFA) only approve FICO 10T for use. They also asked that three other FICO scores, as well as VantageScore 4.0, be rejected. Furthermore, the documents indicate that Fannie Mae and Freddie Mac reported that a single-file report was less accurate than a tri- or bi- merge report. 

Despite these objections, President Biden’s director of the FFHA chose to ignore the GSE’s recommendation. The Trump administration temporarily halted the rule, but after a delay, FHFA Director Bill Pulte pushed forward with a plan that also contradicts the GSE’s advice — to allow VantageScore 4.0 as an approved model for Fannie Mae and Freddie Mac loans.

If true, the FHFA’s decision is reckless and potentially costly to consumers and should therefore be revisited by the agency. Furthermore, Congress should hold hearings on why the agency would ignore Fannie and Freddie’s warnings.

Manno for AEI: Reconnecting Opportunity Youth to Work and a Future

Posted on by Alex Terr

Introduction

Imagine a 19-year-old—let’s call her Jasmine—who is neither in school nor working. She left high school after a family health crisis and picked up shifts where she could—in a warehouse, food service, and day labor—but nothing stuck.

She hears the same mixed messages everyone hears. College costs too much. Artificial intelligence is coming for entry-level jobs. Employers want experience that no newcomer can have. Meanwhile, rent is due now, not after a pathway finally pays off. She needs a credential that leads to a real profession, not another dead-end training course with a glossy flyer and a thin job pipeline.

Jasmine is fictional, but the situation is not. America has millions of young people like her.

Often called opportunity youth, these young people, age 16–24, are full of potential but disconnected from the two institutions that typically launch a successful life: education and work. A widely cited estimate puts the number of young people who are neither in school nor working at roughly 5.5 million,1 though this number fails to include young people who are only marginally attached—working a few hours a week or taking a single class.

A RAND Corporation longitudinal analysis that followed middle and high school students into young adulthood found that those who became disconnected showed signs of struggling socially and academically in middle and high school. They reported more symptoms of depression, experienced higher rates of substance use and delinquency, and had weaker social support structures.

To understand why the school-to-work pipeline feels broken—even to teenagers still in school—we should start with opportunity youth. They are the clearest signal that our systems don’t just have leaks. In too many communities, the on-ramp to good jobs is missing altogether. The response can’t be another scatter of short-term programs or one more credential with an unclear payoff.

We need clearer routes from learning to earning: training tied to real demand, paid work-based opportunities that build experience, and practical supports—such as coaching, transportation, childcare, and trusted adults—that keep young people connected long enough to build momentum. In short, preventing disconnection requires rebuilding the pathway itself, so the next step is visible, affordable, and worth taking.

Read more in AEI. 

Institutional Investment in Single-Family Housing: Separating Fact from Fiction

Posted on by Alyssa Brown

INTRODUCTION

Housing in the United States is too expensive. For most Americans, it is their single biggest expense, and today, it is less affordable than at any time in the last 40 years: The median household needs to devote a whopping 40% of its income to afford the median-priced home.

Policymakers at the local, state, and federal levels have become acutely aware of this crisis. But in their search for solutions, lawmakers across the political spectrum have converged on a politically unsympathetic scapegoat: institutional investors — often described interchangeably as “hedge funds” or “Wall Street.” President Trump recently announced he is “immediately taking steps to ban large institutional investors from buying more single-family homes,” promising to call on Congress to codify the measure. Similar legislation has been introduced in at least 28 states over the past two years.

It is worthwhile to take seriously how frustrated Americans are about housing affordability, but it is also necessary to point out how badly targeted this solution would be. Institutional investors — defined as entities owning 1,000 or more properties — own less than 1% of all single-family homes nationwide.5 Even when examining metro areas with the highest concentrations of institutional ownership, there is no evidence that prices have increased more rapidly in these markets compared to areas with minimal institutional presence. This isn’t to say that market concentration can never be an issue in the housing market. But at the present moment, the proposed bans represent a misapplication of political capital, and a fundamental misdiagnosis of the housing crisis.

If policymakers are genuinely concerned about housing costs, they should pursue a diverse set of policies, including loosening exclusionary zoning restrictions and streamlining permitting requirements. Working-class Americans recognize this. A Progressive Policy Institute/YouGov poll of non-college-educated voters in 2024 found that 64% agreed that “we should cut unnecessary zoning regulations so we can build more multifamily housing and drive down the costs of housing for working families.”6 Targeting institutional investors may be politically expedient, but it will do little to address the underlying regulation-induced supply constraints that are the true drivers of housing unaffordability.

Read the full report. 

 

Manno for The 74: Career and Technical Ed Benefits All Students. 4 Ways to Expand This Opportunity

Posted on by Alex Terr

Each February, National Career and Technical Education Month spotlights the growing reality of Americans rethinking the connection between education and work. The old education-to-opportunity pipeline is increasingly under strain.

Employers struggle to find skilled workers. Families increasingly question the cost and payoff of a traditional college education. And young people are entering a labor market reshaped by artificial intelligence and rising credential requirements. Entry-level jobs that once served as stepping stones now demand prior experience, and skills grow obsolete faster than ever.

For much of the past half-century, education policy rested on a simple promise: Prepare students for college, and opportunity will follow. That formula has weakened. College completion remains uneven, student debt burdens are widespread and too many graduates leave school without clear routes into stable, well-paying work.

Read more in The 74. 

U.S. manufacturing employment is down 108,000 in 2025

Posted on by Alex Terr

FACT: U.S. manufacturing employment is down 108,000 in 2025

THE NUMBERS: U.S. pop-up toaster tariffs and employment–

Tariff rate Employment
2025  15.3% – ~80.0%  0 jobs
2024  5.3%  0 jobs

* Rates now include the 5.3% MFN tariff, plus a series of “emergency decree” rates including (i) a 10% worldwide tariff, (ii) country-by-country rates varying from 15% to 30%, (iii) frequently shifting tariffs on Chinese-made toasters, and (iv) a “national security” tariff of 50% on the value of any copper, steel, or aluminum parts and components. The (iv) part makes actual rates vary by model as well as country, and are hard even for CBP line officers to assess.

WHAT THEY MEAN: 

Why did manufacturing employment turn down last year? An illustrative snapshot-in-miniature –

Then-Senator J.D. Vance in July of 2024: “We believe that a million cheap knockoff toasters aren’t worth the price of a single U.S. manufacturing job.” Putting an arithmetical gloss on this a few months later, DC-based tariff proponent Oren Cass used a hypothetical 10% tariff on Chinese-made toasters and a consequent price increase from $30 to $33 to argue that (a) higher tariffs would only modestly raise toaster prices, and (b) a large social and economic benefit would offset this extra cost:

“Damage is done when a consumer who would have benefited from a $30 toaster chooses not to buy one for $33. A second cost appears as consumers switch to domestic options that are more expensive. The consumer who buys the $32 toaster made in America pays the extra $2, but the government collects no extra revenue. Still, the share of the $32 purchase price that would once have gone to a Chinese factory and its workers now goes to an American firm and its workers instead. It pays American taxes and supports American families in American communities.”

Our own look in September had taken a different view. Setting aside the cost – across the full range of consumer spending on physical goods, the $2-per-toaster price increase would reduce average family purchasing power by about $2,000 – the claim that a 10% tariff would mean more U.S. toaster-manufacturing didn’t look realistic.  At that time, no U.S. companies were making home pop-ups at all back then, though some were making large mass-production toasters for hotels and restaurants. The example of successful high-end pop-up makers in three peer countries — Dualit in the U.K., Italy’s Milantoast, and Japan’s Mitsubishi TO-ST1-T — suggested that a 10% tariff wouldn’t change that, and toaster prices would likely have to go somewhere around $300 before U.S. firms would go back to making pop-ups.

More fundamentally, the premise of a “10% tariff increase on toasters” wasn’t right, since what the Trump/Vance campaign was pitching at the time (and its administration successors have implemented since) was not a toaster or appliance-specific policy, but a general tariff increase also applying to the metals, heating elements, screws, plastic buttons, electrical wiring, etc., manufacturers need to make them. Our conclusion then:

“To get the spectacular ten-fold price-hike that sustains super-toaster making in Japan, Italy, and the UK, you’d need a 900% tariff or some equivalent policy. (Or, if you need only a five-fold price jump to make less impressive appliances profitable, 400%.)  In fact, the additional Trump/Vance tariffs on metals, wiring, buttons, plastics, and other inputs would make U.S.-based toaster-making — including for currently successful producers like Holman Star — harder, not easier. The differentially higher tariff on Chinese-made pop-ups might push some into Vietnam or the Philippines, or possibly Mexico, but that would be the end of it.”

Sixteen months later, abstract arguments on hypothetical policies have been joined by real-world data and experience. Here’s what they say:

Policy: The 5.3% toaster tariff in the Congressionally authorized “MFN” tariff system (HTS 851672) still exists, but the Trump administration tariff decrees have put a sort of carousel of shifting rates on top of it. A rundown:

  • Three Feb. 1st, 2025, decrees added 10% tariffs for Chinese-made toasters, plus 25% on hypothetical Mexican and Canadian alternatives. The Mexican and Canadian ones went away.
  • An April 2nd decree created a new 10% worldwide rate for most goods, including all home appliances, plus country-by-country rates varying from 15% to 50%.

Note: At this point in early April, Howard Lutnick, the Commerce Secretary, predicted an “army of  millions and millions” of Americans would be taking assembly-line jobs turning screws in appliance and consumer electronics factories.

  • An up-and-down set of U.S.-China tariff retaliations in April and May spiked the extra China-toaster tariff rate to 125%, then reduced it to 20%.
  • The July amendment to the April 2 decree set rates of 19% and 20% rates for Southeast Asian and Taiwanese toaster-producers.
  • The Commerce Department’s August 19th decree, defining toasters as a “steel or aluminum derivative product,” put a 50% worldwide tariff on the value of steel and aluminum included in toasters. If you can’t figure out the metal value, it’s a flat 50%.

Extremely complicated, but the basics are a higher worldwide tariff and an especially high one on Chinese-made stuff. What’s happened since? At least so far, our mid-2024 guess at what the real-world impact might be looks extremely close to the real-life experience.  Here’s the data:

1. Higher costs for families: A Cleveland Fed study of tariff impacts suggests that the various decrees have hiked the prices of tariffed goods by about 6.6%, and that the price of locally produced substitutes has gone up by about 3.8%. So, in Mr. Cass’s case of a toaster previously costing $30, the family will very likely pay $2 more.

2. Small toaster production shift: The spikes and volatility in China policy have encouraged some production shifts, with a few toaster-makers moving assembly from China to Malaysia last summer. By November, imports of toasters had dropped a bit, but China still accounted for 95% of toaster sourcing, with Malaysia at 4%. We were slightly off, having guessed at Vietnam and the Philippines as the likely beneficiaries. Not terrible guesses – the differential China tariff has pushed a lot of microwave and personal computer assembly to Vietnam, and the Philippines has picked up some vacuum cleaners – but Malaysia seems to have the toaster-making advantage.

3. No change in U.S. industry and manufacturing employment trending down: No U.S. firm is making pop-ups, so Mr. Vance’s hypothetical guy hasn’t found a toaster job. Nor, on a larger scale, has anyone enlisted in Mr. Lutnick’s ghostly screw-turning army.  To the contrary, with higher tariffs on industrial inputs like the metals and wiring, fewer Americans are turning screws on production lines now than were a year ago. Per the Bureau of Labor Statistics, overall U.S. manufacturing employment dropped by 108,000 last year, with home appliance production shedding 2,600 jobs and consumer electronics shedding 800 more.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

  • Defend the Constitution and oppose rule by decree;
  • Connect tariff policy to growth, work, prices and family budgets, and living standards;
  • Stand by America’s neighbors and allies;
  • Offer a positive alternative.

Data:

Lending Tree’s chocolate-price survey.

And NRF’s Valentine forecast.

Then:

Then-Sen. Vance’s toaster dream.

PPI on the $300-per-toaster cost it likely implies.

… and Mr. Cass’s rosier view.

Now:

Harvard Price Lab tracks the prices of consumer goods subject to new tariffs.

And per the Financial Times (subs. req.), tariff carousel continues to turn, as Trump administration officials scramble to dial back the August 19 rules on “steel and aluminum derivative products”:

“Donald Trump is planning to scale back some tariffs on steel and aluminium goods as he battles an affordability crisis that has sapped his approval ratings … [Anonymous FT sources] said trade officials in the commerce department and US trade representative’s office believed the tariffs were hurting consumers by raising prices for goods such as pie tins and food and drink cans.”

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

Ainsley for The Mirror: Nigel Farage’s Reform are not the workers’ champions – look at their policies

Posted on by Alex Terr

Reform UK are eyeing up a big win in Greater Manchester at this month’s Gorton & Denton by-election.

Nigel Farage and his band of ex-Tories are hoping to persuade voters disillusioned with Labour in Government that they are the workers’ champions. But actions speak louder than words, and the actions of Reform and their populist allies show they are not to be trusted as the workers’ friend.

Just take a look at America, where millions of workers who were fed up of the status quo voted for Donald Trump. Yet one year on, his policies of slapping tariffs on foreign goods and chopping and changing is pushing up prices for American workers.

Meanwhile, his wealthy cronies are raking it in for themselves, with the Trump family fortune ballooning by $1billion since he was elected for the second time, and 30 Trump donors have received benefits or advantages. No wonder his poll ratings are taking a dive as ordinary Americans who were promised change start to doubt he can deliver on what matters to them.

Read more in The Mirror. 

Marshall for The Hill: The Midterms Aren’t Enough — Democrats Must Campaign for the White House

Posted on by Alex Terr

George Washington’s tenacity in winning our war of independence (with French help), after losing many battles, forms the dramatic arc of Ken Burn’s gripping documentary, “The American Revolution.”

Looking ahead to this year’s midterm elections, Democrats should take the long view like Washington. As important as it is to win the House and possibly the Senate in November, it’s even more crucial for Democrats to take back the White House in 2028.

Taking control of the House would give heretofore impotent Democrats some ability to check President Trump’s flagrant abuses of presidential power. They could freeze funding for his outlandish decrees and probe his brazen politicization of federal law enforcement agencies and meddling in state elections.

The party out of power usually makes gains in midterm elections, and Democrats need only flip three seats to control the House. They are also riding a tailwind from Trump’s unpopular policies. By large margins, the public disapproves of his handling the economy, inflation and his signature issue, immigration.

Yet Trump’s fall doesn’t signal Democrats’ rise. Voters still trust Republicans more to address most of their top concerns. That’s why even a House and Senate sweep wouldn’t stop today’s realignment of U.S. politics along educational lines. It’s given Republicans a structural advantage because their base — non-college voters — constitute a supermajority (nearly 60 percent) and are spread more evenly across the country.

Read more in The Hill

Trump’s Failing Fiscal Report Card

Posted on by Alex Terr

The newest fiscal forecast from the Congressional Budget Office (CBO), released this Wednesday, amounts to a damning report card on the Trump administration’s first-year tax and economic policies. It projects staggering deficits, a deteriorating debt path, and rising interest costs. But what makes the assessment especially striking is how much worse these numbers  are compared to just a year ago, before the White House’s profligate, short-sighted agenda was put into effect.

The report’s topline numbers are sobering. Annual deficits are projected to exceed $3 trillion by the end of the decade, up from $1.9 trillion this year and nearly $500 billion higher than last year’s forecast. Over the longer term, the picture is equally troubling. The CBO now projects that over the next three decades, our deficit-to-GDP ratio will increase roughly four times faster than it previously anticipated. As a result, federal debt held by the public is expected to rise to 172% of GDP by 2055, well above last year’s 156% estimate.

This deterioration from previous projections is not coincidental. It reflects deliberate choices made by the Trump administration over the past year. Take the One Big Beautiful Budget Act (OBBBA), the administration’s domestic policy centerpiece. The law’s extension and expansion of trillions of dollars in unpaid-for tax cuts is projected to add roughly $4.7 trillion to the deficit over the next decade. This large cost was no secret during the legislative process, yet many supporters argued that rapid growth would cover the gap. CBO’s analysis tells a different story, pointing to a modest and temporary boost to GDP, with long-run economic growth largely unchanged from a year ago.

The administration’s immigration agenda has also taken a toll on America’s fiscal outlook. By ramping up deportations — while also sharply cutting legal immigration — the administration is precipitously shrinking the labor force, constraining long-term economic output, and eroding the future tax base. CBO projects that overall, the administration’s immigration policies will cumulatively increase the deficit by roughly $500 billion over the next decade.

Even more worrisome is that CBO projections are likely overestimating the government’s only major new source of revenue. It credits the Trump administration with roughly $3 trillion in new tariff revenue, which, despite tariffs’ many other damaging economic effects, has partially offset the impact of their deficit-fueling policies elsewhere. But the bulk of this new tariff revenue is built on legally dubious emergency declarations currently being litigated in the Supreme Court. If the justices strike down the tariffs, America’s fiscal trajectory could soon look even worse than CBO’s already somber projections. 

This lack of fiscal discipline in Washington is especially reckless given the nation already pays more than $1 trillion annually for debt servicing, which reached its all-time high as a percent of GDP in 2025. Now should be the time for lawmakers to reduce the deficit and bring interest payments down to a manageable level. But instead, the CBO projects that debt servicing costs will continuously break new records going forward. By 2047, interest costs are expected to eclipse Social Security to become the largest federal expenditure. By 2055, they will constitute a whopping 6.8% of GDP, more than double what they are today and 25% higher than last year’s projections. 

Beneath these interest projections lies an equally troubling structural shift. When the government’s average interest rate rises above the economy’s nominal growth rate, debt begins to compound faster than the economy can grow its way out of it, setting up a dangerous spiral. In that environment, even modest deficits can cause the debt-to-GDP ratio to climb, forcing policymakers to embrace extreme austerity measures and run sustained primary surpluses just to stabilize the fiscal outlook. The CBO projects that this will be the case within the next few years — far earlier than its previous forecast of 2045 — making today’s deficit binge even more perilous than it may appear. 

A worsening fiscal outlook ultimately means lower living standards. Americans face the prospect of  higher interest rates across the economy, appearing as higher mortgage payments, auto loans, and small business financing costs. Persistent deficits can also crowd out private or public investments, dampening productivity and wage growth over time. And for the millions of people that rely on government programs, rapidly increasing interest costs will force more and more revenue just to pay for yesterday’s consumption, leaving less available for critical public services and programs. 

This administration remains wholly uninterested in fiscal discipline, choosing to embrace fantastical promises about cost-cutting and growth rather than confront the dismal reality its policies are ushering in. But to prevent the biggest consequences of runaway debt, Washington must act as soon as possible to reverse course and confront our nation’s fiscal challenges. Bringing the deficit down to 3% of GDP, as one recent bipartisan resolution proposes, would be a sensible step in the right direction. But words alone won’t be enough. Lawmakers must deliver a comprehensive, balanced package to do so, including pro-growth tax reform that raises adequate revenue, sensible entitlement adjustments that reflect demographic realities, and a retreat from this administration’s economically damaging trade and immigration policies. 

Valentine’s Day boxed chocolate prices are up 11.8% this year 💝📈😡💔

Posted on by Alex Terr

FACT: Valentine’s Day boxed chocolate prices are up 11.8% this year.

THE NUMBERS: Tariff increases on cacao and chocolate, Jan.-November 2025*

 

Total $544 million
Cacao beans, paste, and cocoa butter $313 million
Chocolates & cocoa powder $231 million

*Most recent data available.

WHAT THEY MEAN: 

Why does your V-Day box of assorted cremes, darks, truffles, and ganache cost so much? Partly it’s an unavoidable natural consequence of last year’s bad weather in West Africa, and partly it’s self-inflicted via tariffs. A look at the chocolate world — trees and farmers, shippers and chocolatiers, retailers and lovers — and the impact of eccentric and ill-judged policy:

Sources, Trade, and Production: Chocolate comes from the cacao tree, a shade-loving evergreen native to the Amazon. About 20 feet high when mature, the tree produces a few dozen green, red, or purple “pods” annually, each weighing about a half kilo and containing 20 to 50 beans. It’s not quite true to say that no chocolate originates in the United States — artisanal Hawaiian and Puerto Rican farmers produce about 100 tons of beans a year —but that’s a tiny fraction of the quarter-million tons American chocolatiers use annually. Most come from West Africa: Cote d’Ivoire grows nearly half of the world’s annual 5.6 million tons of cacao beans and neighboring Ghana adds 0.6 million more, with Ecuador third and Indonesia fourth.

Cacao farmers pluck the pods twice a year, then extract, ferment, and dry the beans to prepare them for sale. The New York Botanical Gardens explain:

“The fruits are cut from the tree and split open with machetes to extract the seeds surrounded by the white pulp. Next, the seeds are put into wooden boxes to ferment for usually three to six days. The fermentation causes the development of the characteristic aroma and flavor of chocolate, and in the breakdown of the white pulp surrounding the seeds. The beans are dried, either in the sun or in ovens, and the remaining pulp is removed.”

American chocolatiers are the world’s fourth-largest buyers (Europeans do more), purchasing 235,000 tons last year, with 82,000 tons from Cote d’Ivoire, another 84,000 tons from Ghana and Ecuador combined, and the rest divided among about 15 other producers around the world. Along with this came 311,000 tons of semi-processed cocoa paste and cocoa butter, with Côte d’Ivoire, Indonesia, Malaysia, and Ghana the main sources. All are duty-free under the normal, Congressionally authorized U.S. tariff system. Next step:

“In the chocolate factory, the beans are roasted to further enhance the flavor [ed. note: turning them from “cacao” into “cocoa” beans] and then the seed husk is broken and blown away in a process called winnowing, which leaves only pieces of the embryo called nibs. The nibs are ground into chocolate liquor, which is run through a hydraulic press to yield cocoa butter on one side and cocoa powder (which also contains some cocoa butter) on the other side of the press.” 

The powder goes to drinks, and the “butter” (mixed in various degrees with milk, sugar, etc.) to confections. Compressing the whole tree-to-tongue supply chain, one or two pods go into a chocolate bar (roughly one pod for milk, and two for dark), and a 14-piece assortment needs about five pods. U.S. chocolatiers produce about 2.1 million tons annually, while grocers and retailers import another 755,000 tons, mainly from Canada and Europe.

Prices, Weather, and Tariffs: If this Saturday’s Valentine gift seems especially expensive, you’re not wrong. A Lending Tree study this month found that prices for boxed assortments have jumped by 11.8% on average since last February, and in some cases nearly doubled.

One reason for the spike is natural and unavoidable. Drought and unusual heat in West Africa last year meant trees produced fewer beans. This pushed prices up from $2,000 to $3,000 per ton of beans to above $10,000. The other reason is artificial and self-inflicted: the Trump administration’s April 2 tariff decree imposed 21% tariffs on Ivorian beans, 10% on Ghanaian beans, 32% on Indonesian beans, and 10% on beans from Ecuador. (Again, all were previously duty-free.) On top of this, they added 20% tariffs on European Union confectionery and 31% on Swiss confectionery. Rates have shifted around a lot — a July rewrite of the decree reset them at 15% for the West African and Ecuadoran beans, 19% on the Indonesian butter and paste, and 15% for European and Swiss confectionery — but have been raising costs all year long.

Altogether, from April to November the tariffs put over half a billion dollars’ worth of new expenses into the U.S.’ chocolate supply chain. Averaging by month, that’s an extra $25 million in tariffs on $250 million in cacao and chocolate imports. About three-fifths of the cost fell on U.S. chocolatiers buying beans, paste, and butter to turn into bars, truffles, and kisses. (And on their workers: BLS’s most recent data showed confectionery employment down by 3,500 jobs since January.) Grocers and retailers buying finished confections and powder paid the rest. The financials:

2024 2025 Extra payments
Total $71 million $615 million $544 million
Cacao beans   $0 million $111 million $111 million
Cocoa paste and butter   $0 million $202 million $202 million
Cocoa powder   $0.4 million   $59 million   $59 million
Chocolate confectionery $71.million $243 million $172 million

The administration backed off on the beans, paste, and butter tariffs in mid-November, so Ghirardelli and Hershey got some year-end relief. But your Cadbury, Valrhona, Nestle or Lindt box still comes with 15% tacked on.

In sum, the tariff experiment has had some clear results — more costs for chocolatiers, fewer jobs for confectionery workers, and higher prices for couples. To the extent there’s a bright spot: the National Retail Federation’s V-Day forecast — spending up $1.4 billion this year — suggests that couples, if with some regret, have mostly decided to absorb the extra expense rather than scale back. If so, tariffs have imposed a clear cost, but lovers haven’t let it kill the mood.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

  • Defend the Constitution and oppose rule by decree;
  • Connect tariff policy to growth, work, prices and family budgets, and living standards;
  • Stand by America’s neighbors and allies;
  • Offer a positive alternative.

Data:

Lending Tree’s chocolate-price survey.

And NRF’s Valentine forecast.

Growers & chocolatiers:

The New York Botanical Garden summarizes the trail, from pod on tree to candy in box.

The World Cocoa Foundation (a non-profit consortium of producers, confectioners, governments, and transport firms) has material on development and sustainability, trade and prices, small-farmer support, and more.

The Ghana Cocoa Board explains Ghana’s cacao industry.

The European Union-funded Sustainable Cocoa program supports labor law and reforestation in Cote d’Ivoire, Ghana, and Cameroon.

The Hawaii Chocolate and Cacao Growers Association introduces the U.S. cacao-growing industry.

And San Francisco-based Ghirardelli has chocolate-tasting pro tips.

Some V-Day Chocolate History

Chocolate’s association with sensuality and romance, and the accompanying hints of possible aphrodisiac effects, are old and very durable. The specific tie to Valentine’s Day is originally British. Chocolate-bar inventor and marketing pioneer Richard Cadbury came up with the heart-shaped box as a romantic gift in the 1860s. Cadbury was taking advantage of a much older tradition, which seems to have originated in the Aztec Empire. Here’s Bernal Diaz del Castillo’s account of a banquet with the Aztec emperor Moctezuma in 1521:

“De cuando en cuando le traian en unas copas de oro fino con cierta bebidea del mismo cacao, que decian era para tener accesso con mujeres.”

English translations seem a little euphemistic — one reads “from time to time they brought him a certain drink made from cacao in cups of pure gold, which they said he took when he was going to visit his wives” — but Diaz del Castillo’s original Spanish doesn’t leave many doubts.

As a trade policy sidenote, cacao trees didn’t grow in the Aztec heartland — too dry — and the emperors, a bit like Americans today, got the cacao beans through a picturesque state trading enterprise.  The Florentine Codex (Book 9) says they financed annual merchant expeditions to Maya principalities in modern-day Chiapas and Guatemala, carrying woven cotton clothes, rock crystal earrings, and gold jewelry to exchange for jade, quetzal and spoonbill feathers, and cacao beans.

For the big picture, The True History of Chocolate (Sophia and Michael Coe, 2013) takes you from Aztec nobles — they liked chocolate as a whipped drink, like a cappuccino — through 19th-century innovators Cadbury and Fry to modern mass markets and high-end tasting.

And some science:

Is chocolate really an aphrodisiac? Italian researchers in 2006, having done a sex-life survey of two groups of women in 2006 — one eating a lot of chocolate and the other not — bleakly concluded that “no differences between the two groups were observed.” A more recent look in Southern California, this one with both male and female subjects, got the same result.

But via an earlier PPI Trade Fact, some other scientists reported in 2012 that it might actually, maybe, hold up for supposedly boring vanilla. This study used male lab rodents rather than human subjects, though.

PPI wishes friends and readers a romantic and happy Valentine’s Day, even if it’s a little harder to afford this year.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Ainsley for Fabian Society: The Democrats’ recent success across the Atlantic show that a dogged focus on affordability can defeat the right

Posted on by Max Sherrill

November’s US elections were Donald Trump’s first real electoral test since he swept to victory for the second time a year ago, and they produced plenty of results for the Republicans to be concerned about. The Democratic party did about as well as it could hope for, especially so given the party is without a central figure who could lead the opposition to Trump and crystallise to voters what the Democrats stand for.

The dynamic Zohran Mamdani attracted most of the attention this side of the Atlantic with his stunning win to become the new mayor of New York City, gaining plaudits from prominent Labour politicians including his London counterpart Sadiq Khan and members of the parliamentary Labour party. Mamdani’s campaign has been admired for its ground and social media mobilisation, especially when centre-left parties seem to be behind the populist right when it comes to commanding online attention.

The elections of two new Democrat governors in Virginia and New Jersey, however, may tell us more about what is happening in America than winning the mayoralty in a state that hasn’t voted Republican for 40 years. Abigail Spanberger took back the Virginia governorship from the Republicans, winning by 15 points, and Rep. Mikie Sherrill won by 13 points in New Jersey. At the 2024 presidential election, Kamala Harris won Virginia by just 5 points and New Jersey by 6 points. She won New York City by nearly 40 points.

Keep reading in Fabian Society’s Bottom Line.

PPI’s New Directions Michigan

Posted on by Max Sherrill

On February 6-7, PPI brought New Directions to Lansing, Michigan, convening elected leaders, policy experts, and political strategists from across the country to continue a candid conversation about the future of the Democratic Party.

As a Midwest battleground with deep manufacturing roots, Michigan reflects both the economic pressures facing working Americans and the kind of pragmatic leadership needed to rebuild trust and deliver results.

The convening began Friday evening with a fireside conversation with Governor Gretchen Whitmer and continued Saturday with discussions on lowering costs, expanding energy abundance, strengthening workforce skills, reforming public education, reimagining Democrats’ approach to national security, and positioning the economy for growth in an AI-driven world.

What emerged over two days was a shared recognition that party renewal will require clearer priorities, practical solutions, and a renewed focus on upward mobility for working Americans.

See below for highlights and key takeaways from New Directions in Lansing. Click the hyperlinks or photos for a clip of each discussion panel, or watch the full event here.

To kick off the weekend, PPI hosted a dinner featuring a fireside chat with Michigan Governor Gretchen Whitmer and former Congressman and PPI Senior Advisor Tim Ryan. The conversation focused on governing in a competitive state and learning from Michigan’s recent successes, including the governor’s “Fix the Damn Roads” initiative, which grew directly out of voter feedback. Governor Whitmer emphasized the importance of economic security, education reform, and a balanced approach to energy policy, while underscoring the need for Democrats to better understand voter concerns and deliver a clearer message rooted in results for working families.

View the full highlights here.

Ainsley in ABC Australia: UK political crisis deepens after PM’s chief of staff quits

Posted on by Alex Terr

Buckingham Palace says King Charles is ready to support any police investigation into his brother Andrew Mountbatten-Windsor.

British police have confirmed they are assessing information provided to them, allegedly showing that the former prince Andrew had passed confidential reports to the late sex offender Jeffrey Epstein while the former royal was British trade envoy more than a decade ago.

Meanwhile, pressure is mounting on the British Prime Minister Sir Keir Starmer to resign over a decision to hire Lord Peter Mandelson as the UK’s ambassador to Washington.

The former ambassador’s name appears thousands of times in the files.

  • Guest: Claire Ainsley, Former Director of Policy to Keir Starmer, now Director of the Project on Center-Left Renewal at the Progressive Policy Institute

Listen to the interview here. 

The U.S. public’s view of Trump tariffs was negative at the start. Few if any minds have changed since.

Posted on by Alex Terr

FACT: Most Americans disliked higher tariffs a year ago, and few minds have changed since.

THE NUMBERS: CNN/SSRS surveys on Trump tariffs –

“Disapprove” “Approve”
January 2026 62% 37%
July 2025 61% 39%
March 2025 61% 39%

CNN/SSRS surveys in March 2025, July 2025, and January 2026.  

WHAT THEY MEAN: 

Pollsters have been pestering Americans about trade and tariffs since the 1950s, but probably never as much as last year. Since the Trump administration’s first tariff decrees — last February 1, a year ago last Sunday — our probably incomplete count finds CNN/SSRS and Washington Post/ABC asking about tariffs three times each, the Pew Center twice, Fox News six times, NYT/Siena three times, the Wall Street Journal four, with Gallup, AP, the Economist and Reuters adding lots more. With their national data has come a gush of previously rare polling on tariff attitudes in individual states. The resulting mass of stats conveys a pretty simple message: Most Americans disliked higher tariffs a year ago, and few minds have changed since.

A summary with national averages, crosstabs, and states –

1. National: National polls suggest that (a) more than 60% of Americans disapprove of Mr. Trump’s tariffs, (b) a bit fewer than 40% support them, and (c) the most recent results look like the earliest ones. The CNN/SSRS figures above are pretty close to the overall average, but see below (“Further Reading”) to compare them with Washington Post/ABC, Fox News, and New York Times/Siena.

2. Crosstabs: Within this broad opposition, polling finds some consistent divisions of opinion. Three especially striking ones (and see “Further Reading” for two more):

Red v. Blue: Democrats nearly unanimously opposes, Republicans strongly but less enthusiastically support, and independents pretty decisively take the “blue” side. Fox News’ January survey, for example, reports opposition at 92%-8% among Democrats and 82%-18% among political independents, while Republicans approve by 71%-28%. At the state level, Bowling Green State’s October Ohio poll has an exceptionally sharp partisan split: within Ohioans’ overall 60%-40% disapproval, Democrats oppose the tariffs 97%-3%, and their independent neighbors oppose 83%-16%, while Republicans support 77%-23%.

Race & Ethnicity: African Americans are most opposed to tariffs, white Americans are most closely divided (though with anti-tariff majorities), and Hispanics are in between. For example, this January’s NYT/Siena poll (which seems to get the friendliest results for the administration) found white Americans opposing tariffs 51%-43%, African Americans 66%-25%, Hispanics 50%-29%, and “others” 63%-32%. Fox, meanwhile, had white Americans “disapproving” 61%-39%, African Americans 74%-26%, and Hispanics 67%-33%. Data on Asian American views is scarcer, but an AP poll last July showed Asian Americans and Pacific Islanders significantly more likely than Americans as a whole to believe tariffs would likely reduce job opportunities and raise prices, and the Pew Center’s April poll found 70%-28% Asian American “disapproval” of tariff increases. (We haven’t found a Native American survey, but try Native Voice One‘s in-depth radio discussion.)

Education: The education gap is a bit narrower, but socially illuminating. January’s NYT/Siena poll finds Americans with college degrees opposing tariffs by a very wide 65%-31% margin, and non-college Americans by a much narrower 48%-42%. The widest gulf is among white Americans: a 50%-43% plurality of non-college white respondents support the administration’s tariffs, while white Americans with college degrees oppose them by 63%-34%. NYT’s (very aggregated) “non-white” respondents are less sharply divided, with “non-college non-white” respondents opposing tariffs by 53%-30% and college degree holders by 72%-20%.

3. States: State polls add depth on regional opinion, and often ask distinctive questions that yield unexpected insights. Three examples (and more below):

New Hampshire: Relative importance of tariffs – The University of New Hampshire’s November poll provides a sense of the priority the public gives tariffs as an economic issue. Overall, 45% of their respondents approved of Mr. Trump’s economic management, while 54% disapproved. Among the “approving” minority, 27% cited tariffs as the most important reason for their good review. This was a higher share than any other issue got, and another 3% added “trade.” But an even larger 38% of the majority “disapprovers” cited tariffs as the most important factor in their opinion. So the New Hampshire public appears to agree that tariffs are very important, but on balance feels they’re important in a bad way.

Ohio: Tariff effects by economic class, business type, and unions – Bowling Green State University has polled Ohio twice, first in April and then in October. This went beyond broad approve/disapprove totals (60% disapproving and 40% approving in October, with 44% “strongly” disapproving and 18% “strongly” approving) to ask about the sort of people, institutions, and businesses who might benefit from tariffs. The answers suggest Ohioans developed an increasingly “un-populist” view of tariff impacts over the year. In April, 42% of respondents thought tariffs would help labor unions; by October, the share had fallen to 34. The share feeling tariffs might help small businesses likewise dropped from 41% to 35%, and those believing tariffs would help “the middle class” dropped from 42% to 36%. Meanwhile, the shares believing tariffs would benefit “the wealthy” and “large corporations” rose from 66% to 73% and from 60% to 67%

Texas: Levels of consensus on family finances, prices, and jobs – A December 2025 poll by the UT/Austin’s Texas Policy Project reports that 52% of respondents believe tariffs “will hurt my family,” while 20% think they will help, and 28% aren’t sure. Perceptions on price impacts were near-consensus: 67% believe tariffs are raising prices for “everyday goods,” while 9% think they’re lowering prices, and 25% weren’t sure. Guesses about job impact were most divided, with 42% feeling that tariffs mean fewer jobs for U.S. workers, while 29% predicted more jobs, and 29% didn’t know.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

  • Defend the Constitution and oppose rule by decree;
  • Connect tariff policy to growth, work, prices and family budgets, and living standards;
  • Stand by America’s neighbors and allies;
  • Offer a positive alternative.

Some specialty polls:

AP’s July survey of Asian American views.

Also in July, Equis surveys Hispanic America; 58% “oppose” tariff increases and 31% “support.”

The Chicago Council on Global Affairs has public views on America’s broader role in the world — foreign policy, national security and military alliances, and humanitarian work, as well as trade and finance. The survey overall finds a public mood far removed from the Trump administration’s protectionism and confrontational approach to America’s historic allies, and the trade material meshes with the more political polls in showing Democrats and independents moving away from support for trade barriers.

Not a poll, but still illuminating: A Native Voice One radio call-in show features fabric designer Denise Hill (Wahpeton), Montana State Senator Susan Webber (Blackfeet), North Carolina economist Larry Chavis (Lumbee), and business owner Jeff St. Louis (Chippewa) on Native community and business experience with tariffs, including Sen. Webber’s role as lead plaintiff in the Blackfeet Nation’s case against ’emergency’ tariffs on Canadian goods as a treaty violation.

More nationals:

The Washington Post/ABC survey found 64% “disapproving” of Mr. Trump’s tariffs last April, and 34% “approving.” A September follow-up got the same 64%-34% split, and October’s 65%-33% was a little worse.

Fox News’ first survey last April found 58%-33% disapproval. September’s, their third, got 63%-36%, and the sixth, out last week, a statistically identical 63%-37%. To the extent this poll shows some shifting over time, it looks more like “hardening opinion” than “changing views”: 9% were “uncertain” or “don’t know” last April, and none — 0% — this January.

New York Times/Siena uses slightly different words — “support or oppose,” rather than “approve or disapprove.” Their results are modestly friendlier for the administration, but just as stable: in last July’s survey, 55% “opposed” and 40% “supported” tariffs; this January’s split was 55%-38%.

More States

Arizona: Phoenix surveyors Noble Predictive Insights in May found 51% of Arizonans saying tariffs hurt the economy, and 37% that they help.

California: The Public Policy Institute of California (PPIC, in San Francisco) reports 72% of Californians oppose new tariffs on imported goods, while 25% support them. This is about the same as the 73%-26% disapproval of Trump’s job performance.

Maine: In April, the University of New Hampshire found a 52%-41% negative result in Maine. The gap wasn’t huge, but disapprovers were much more strongly “con” than approvers were “pro”: 48% of respondents “strongly” disapproved while only 20% “strongly” approved.

Michigan: Tariffs on Canadian goods – In a September poll for the Detroit Regional Chamber of Commerce, 48% of Michiganders thought tariff increases had been bad for the Michigan economy, 28% thought they were good, and 23% weren’t sure or thought there hadn’t been any significant impact. Respondents were particularly alarmed by potential tariffs on Canadian products, with 57% believing this would be bad for the Michigan economy and 19% good.

North Carolina: Personal v. national impact – Elon University’s September poll asked North Carolinians whether they have “experienced a personal positive or negative impact from the Trump administration’s tariffs.” Among their respondents, 46% reported negative impacts and 14% positive, while 40% didn’t notice much either way. Adding to this, a November poll by the John Locke Foundation (an against-the-tide small-government Raleigh think tank) found North Carolinians generally negative, but with more division on potential “national” benefit from tariffs than on personal impact. By 54%-38%, they thought tariffs hurt rather than help the U.S. economy; at home, by 56%-19%, they thought tariffs hurt rather than help their family finances.

South Dakota: An unusual exception, as a November poll done by Mason-Dixon found 49%-44% plurality support for tariffs. South Dakota is a youth-v.-age exception too, as the poll found younger South Dakotans more pro-tariff (50%) than the over-50s (44%).

Wisconsin: Marquette Law School gets 63% disapproving and 37% approving of Mr. Trump’s tariffs in November. This is very close to the 64%-36% disapproval majority of his economic policy in general, and worse than the 57%-43% disapproval of his presidency.

More crosstabs:

Youth v. Age: Polling for decades has found younger Americans more enthusiastic about trade, and less supportive of tariffs than their elders. Mr. Trump’s experiment hasn’t changed this. In CNN/SSRS’s January poll, for example, 18-34-year-olds disapproved of it by 71%-29%. In the grayer tiers, late-career respondents from 50 to 64 disapproved by a smaller 54%-46% margin, and retirement-eligible over-65s by a statistically identical 54%-45%.

Gender: Polling doesn’t indicate a very wide “gender gap” on tariffs, though women generally disapprove more than men. CNN/SSRS, for example, found men disapproving by 59% to 40%, and women by 64%-35%.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

Jacoby on Joan Esposito: Live, Local & Progressive

Posted on by Max Sherrill

Tamar Jacoby, contributor to Washington Monthly and the Kyiv-based director of the Progressive Policy Institute’s New Ukraine Project and the author of “Displaced: The Ukrainian Refugee Experience.” Her latest article for Washington Monthly is “Putin’s Energy Blitzkrieg is Backfiring.”

Marshall in Politico: ‘Comeback Kid’ no more: Dems aren’t protecting the Clintons from Epstein scrutiny

Posted on by Alex Terr

[…]

Will Marshall, another Clinton cohort, concurred. “It would have been nice to see Dems not take part in an obvious attempt to pressure a former Democratic president to come to a MAGA show trial,” said Marshall, the founder of the Progressive Policy Institute, a center-left think tank that served as a policy incubator during the Clinton years.

[…]

Marshall, the PPI founder, said the new cohort of Democrats steering the party to the left are asking the wrong questions.

“If you’re a Democrat today, you have to be asking yourself why we’re in the minority, why do we lack the tools to stop Trump from criminalizing our political differences? And the answer is the party is shrinking,” he said. “The dilemma isn’t how to keep moving left. It’s how to get back the voters Clinton won twice in the ‘90s.”

[…]