Category: Uncategorized

Unpacking the JetBlue-Spirit Merger: Why DOJ’s Case for Consumer Choice Will Protect U.S. Flyers

Posted on by Alyssa Brown

Today, Dr. Diana Moss, Vice President and Director of Competition Policy at the Progressive Policy Institute (PPI), provided new analysis on the proposed merger of JetBlue and ultra-low-cost carrier (ULCC) Spirit. The merger raises novel issues for airline competition in the United States and is the first time the U.S. Department of Justice has sought to block an airline merger because it will substantially reduce competition under Section 7 of the Clayton Act.

The merger of U.S. airline carriers JetBlue and Spirit, if it succeeds, will be the seventh major U.S. airline merger in the last two decades. As of mid-2012, the four largest airlines controlled about 57% of the national market, increasing to 68% in mid-2022. This slow hemorrhage of domestic carriers has tightened the Big 4 airline oligopoly, with little meaningful entry of new carriers. Since the last major swath of mergers in the mid-2000s, the entry of new carriers has reverted to levels in the pre-deregulation era.

As with previous airline mergers, the prospect of reduced competition following a JetBlue-Spirit tie-up raises concerns about higher fares and lower quality. But it is also an important case of “first impression.” If the merger goes through, JetBlue will likely dismantle Spirit, cutting budget-conscious travelers’ national ULCC flying options in half. This is a far cry from European passenger airline markets that feature many more low-cost carriers.

“Consumer choice, an important dimension of competition, is highly visible in the airline sector. It is a practical application of the premise that a substantial loss of competition can hurt consumers by taking away their options. If the government prevails, JetBlue-Spirit could open up bandwidth for the idea that a loss of choice is as harmful to consumers as higher prices or lower quality,” said Diana Moss. “Taken together, these harmful effects make a powerful case for why denying the JetBlue-Spirit merger would maintain competition and protect consumers.”

Read PPI’s full analysis here.

 

The Progressive Policy Institute (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. Learn more about PPI by visiting progressivepolicy.org.

Follow the Progressive Policy Institute.

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Media Contact: Amelia Fox – afox@ppionline.org

Consumer Choice And Antitrust Pragmatism: Unpacking The JetBlue-Spirit Merger

Posted on by Alyssa Brown

The merger of JetBlue and Spirit has surfaced novel issues for airline competition in U.S. passenger markets, where concentration is often high and smaller carriers face a high hurdle in getting a foothold. As with previous airline mergers, the prospect of reduced competition following a JetBlue-Spirit merger raises concerns about higher fares and lower quality. But it is also an important case of first impression. If the merger goes through, JetBlue will likely dismantle ultra-low-cost carrier (ULCC) Spirit, cutting budget-conscious travelers’ national U.S. ULCC flying options in half. This is a far cry from European passenger markets that feature many more low-cost carriers. As an important dimension of competition, consumer choice is highly visible in the airline sector. The idea that less choice is bad for consumers does not require the complex fact-finding and analysis that is typical in contested merger proceedings. Rather, it is a practical application of the premise that a substantial loss of competition hurts consumers simply by taking away their options. Viewed through this lens of antitrust “pragmatism,” JetBlue-Spirit could open up bandwidth for new precedent that a loss of choice is as harmful to consumers as higher prices or lower quality. When taken together, these harmful effects make a powerful case for why denying the JetBlue-Spirit merger would maintain competition and protect consumers. To take a deeper dive into how PPI is thinking about consumer choice, antitrust pragmatism, and airline competition, please read on.

AIRLINE MERGERS AND CONSUMER CHOICE

The merger of U.S. airline carriers JetBlue and ultra-low-cost carrier (ULCC) Spirit, if it succeeds, will be the seventh major U.S. airline merger in the last two decades. Put another way, at this pace of consolidation, the U.S. will have lost a domestic airline carrier about every 33 months since the mid-2000s. A merger of JetBlue and Spirit would combine the sixth and seventh largest airlines by market share, leapfrogging Alaska to land in fifth place behind the top four: Delta, American, Southwest, and United.

Despite their positioning as smaller domestic airlines, a merger of JetBlue and Spirit highlights two recent shifts in U.S. airline merger enforcement. It is the first time the U.S. Department of Justice (DOJ) has sought a full-stop injunction for an airline merger on the grounds that it will substantially reduce competition under Section 7 of the Clayton Act This stands in contrast to previous airline mergers where the government settled with remedies, such as slot or gate divestitures. The DOJ’s unwillingness to accept a fix in JetBlue-Spirit is another in a series of moves that reveal the Biden administration’s more aggressive stance on reining in consolidation.

The DOJ’s challenge of the JetBlue-Spirit merger is also notable for another reason. JetBlue intends to eliminate Spirit, reconfiguring the trademark yellow planes and raising fares. As one of only two national U.S. ULCCs, the merger eliminates about 50% of this market segment. This is a markedly different landscape than in Europe, which features many more low-cost carriers from which consumers can choose. ULCCs are disruptive players, providing a vital source of choice for budget-conscious travelers. These options will be dramatically scaled back when JetBlue retires the Spirit model. The DOJ’s case tees up consumer choice as an essential element of competition, extending traditional concerns that an airline merger can raise fares and degrade service quality.

The court could look askance at the DOJ’s claim that the loss of Spirit will hurt consumers by reducing consumer choice. Or it could widen the antitrust aperture by giving credence to how a loss of competition manifests harmfully in fewer options for consumers. The case for why a loss of choice is bad for consumers does not require voluminous data and complex economic models. As such, it is by far the most practical application of the premise that mergers that substantially reduce competition are illegal. Viewed through the lens of antitrust “pragmatism,” a positive judicial finding for the government in JetBlue-Spirit on the issue of consumer choice could free up bandwidth for advancing stronger merger enforcement.

READ THE FULL ANALYSIS. 

Brown for The Messenger: The Wrong Green Plan Can Mean Climate Disaster

Posted on by Max Sherrill

By Neel Brown

There is wisdom in the words of legendary boxer Mike Tyson, “Everyone has a plan until they get punched in the mouth.”

The ultra-green activists have been punched in the mouth, so to speak. Their plan to keep all fossil fuels in the ground has been bested by a tough opponent: reality.

As a result, their efforts to limit U.S. liquified natural gas (LNG) production and exports in the name of abolishing all fossil fuel use are bringing us closer to a climate disaster.

There is no question that we are in a climate emergency that must be addressed with a determined push for a clean energy transition. That push should be pursued with speed and resolve — but without losing sight of the goal, which is to reduce greenhouse gas emissions. This is vital to the health and prosperity of current and future generations.

Read more in Medium.

Marshall for The Hill: Partisan foreign policy extremists are draining respect for US leadership

Posted on by The Progressive Policy Institute

By Will Marshall

Storm clouds are gathering around the world. In Europe, Asia and the Middle East, tyrants and terrorists are on the march, while the country most able to stand up to them — the United States — is rancorously disunited.

Hamas’s Oct. 7 massacre of 1,200 Israelis was a harrowing display of barbarism cracking through civilization’s fragile veneer. In Europe, Russian “dictator” Vladimir Putin is doubling down on his criminal war to compel Ukraine’s subservience to Moscow.

Keep reading in The Hill.

A New Way to Scale Apprenticeships in America

Posted on by Max Sherrill

Today marks the end of National Apprenticeship Week (NAW). Acknowledged nationally, NAW is a time when apprenticeship partners and providers showcase the success and value of these programs. And it’s no wonder we celebrate these opportunities, apprenticeships are instrumental in building pipelines to good jobs for individuals while also ensuring employers have the talent, they need to remain competitive.

While NAW started nine years ago, apprenticeship has been around for much, much longer. These earn-and-learn models are engrained in America’s history — three of our Founding Fathers started their careers as apprentices. George Washington, for example, apprenticed as a land surveyor. Yet even with this 250-year runway, apprenticeships have not taken off in the United States as they have in other advanced nations.

Today, our country has almost 600,000 registered apprenticeships, mostly in traditional sectors such as building trades and heavy industry. As a share of their labor force, Great Britain, Australia, and Germany have roughly 10 times more opportunities. It is puzzling that the U.S. hasn’t followed its peers in scaling up apprenticeship, a training model that is also a job, allowing people to work and earn while they are learning the critical skills necessary for good jobs and careers. It’s an especially relevant model now, when most U.S. jobs require at least some postsecondary education and training, and when employers, even in our tight labor market, report a serious shortage of skilled workers in their fields.

While many progressives believe a four-year degree is the solution, the reality is that 62% of American adults don’t have one. Additionally, the college earnings premium appears to be declining for the first time in decades, because of soaring college tuition costs, low completion rates, and heavy debt burdens — further pushing the American public to rethink the value proposition of traditional higher education. This change in public opinion was reinforced by a recent PPI poll, which surveyed ~5,000 workers without four-year degrees. 74% believed that public investment in apprenticeship and career pathways to help individuals acquire better skills is the most likely way to help workers get ahead in today’s economy.

Not only is it clear America needs alternatives that are affordable, trusted by employers, and help people learn the technical and digital skills that today’s jobs require but apprenticeships also have strong economic impacts. Individuals who complete an apprenticeship program earn an average annual salary of $77,000, compared to an average national salary of $55,000. Those who complete an apprenticeship program also earn an average of $300,000 more than those who don’t over the course of their career.

On the employer side, apprenticeships help businesses boost recruitment; increase the diversity of their workforce; improve retention (94% of apprentices stay with their company after the apprenticeship wrap); preserve institutional knowledge; and leverage skilled, experienced workers close to retirement to serve as mentors and instructors. For roughly every dollar spent on apprenticeship, employers get an average of $1.47 back in increased productivity, reduced waste of time and cost, and greater front-line innovation.

To ensure more American workers and businesses benefit from these opportunities and keep pace with other partner nations, our country must dramatically scale up apprenticeship. To do this, it will require not only a major boost in public investment, but also a new policy architecture in which public, nonprofit, and private intermediaries play a catalytic role in training and placing apprenticeships in companies.

This week as we recognize the promise of these opportunities, PPI is re-elevating our recent report “Strengthening America’s Workforce: The Path to 4 Million Apprenticeships” which offers a fresh take on Apprenticeships for America’s pay-per-apprenticeship proposal. This proposal would create one million apprenticeships a year through: increased federal investment, funding tied to performance, a shift from lottery-style grants to formula funding, and for resources to be drawn down by all types of intermediaries, from nonprofits like CareerWise, to for-profit apprenticeship service providers like Multiverse, to sell employers on apprenticeship and help them organize programs.

If the federal government were to adopt this proposal, a $4 billion investment would create 1 million new apprenticeships a year. And while $4 billion sounds expensive, compare it to what the government spends annually on higher education. In Ryan Craig’s recent book “Apprenticeship Nation: How the Earn and Learn Alternative to Higher Education Will Create a Stronger and Fairer America.” He finds that federal, state, and local governments continue to pour over $400 billion each year into college while total spending on apprenticeship is under $400 million – that’s a ratio of 1,000:1. And that spending is done willingly without the same job guarantee

As the U.S. wraps up National Apprenticeship Week, PPI wants to remind today’s policymakers to take a page from our history books and, like our Founding Fathers, commit to apprenticeship. But rather than go back in time, PPI encourages U.S. policymakers to adopt this novel approach, so we achieve a roughly 10-fold increase in American apprentices. With such an effort, the U.S. will follow other countries and remain competitive through gains in workforce quality and improved productivity while simultaneously increasing earnings, widening access to rewarding careers, and expanding the middle class for workers. Now that is something worth celebrating.

Ritz for Forbes: New Poll Shows Working-Class Voters Want Lower Prices And Public Debt

Posted on by Max Sherrill

By Ben Ritz

In the past two presidential elections, working-class voters have proven to be a decisive swing vote in the pivotal states that determine the winner. A new comprehensive survey of working-class voters from the Progressive Policy Institute reveals how and why these voters, who once formed the backbone of the Democratic Party, have become estranged from it. The poll also points to the serious reorientation of both policy and messaging that will be necessary to build durable majorities.

In partnership with YouGov, PPI surveyed a representative national sample of voters without a four-year college degree and oversampled in seven key battleground states. The poll found these voters see the Democratic Party as out of sync with not only their cultural values but also their economic priorities.

When asked what the greatest economic challenge is facing the United States today, a whopping 69% of respondents said the high cost of living and inflation outpacing economic growth. Among these voters, 55% believe recent inflation is primarily driven by excessive stimulus spending rather than the COVID pandemic or supply chain bottlenecks. Notably, another 11% said high deficits and debt are the greatest challenge, while all other potential challenges registered single digits.

Read more in Forbes.

Can Democrats Win Back America’s Working Class? New PPI/YouGov Poll Sheds Light on Key Challenges

Posted on by Max Sherrill

Washington, D.C. — Working Americans believe the last 40 years have not been kind to them. When surveyed in a new poll, a majority of working-class voters believe they are worse off. When asked which President from the past 30 years has done the most for average working families, voters choose Donald Trump by a wide margin (44% to Biden’s 12%). While the result is mainly driven by partisan divides, 51% of independents chose Trump.

Working-class voters are a crucial demographic in competitive districts across the country and Democrats must make further inroads with working-class voters in order to build on recent election victories and assemble a winning coalition for 2024.

Today, the Progressive Policy Institute’s (PPI) Project on Center-Left Renewal released a new poll commissioned by YouGov to help Democrats understand and frame more effective appeals to working-class voters. PPI President Will Marshall provides a summary and analysis of the results in the report “Winning Back Working America: A PPI/YouGov Survey of Working Class Attitudes.”

“In the last century, we’ve seen a populist revolt against dominant political parties rooted in working-class voters’ discontent with sweeping economic and cultural changes. Working Americans believe the last 40 years have been hard for them and do not believe that either party will handle the issues they care most about. Ahead of 2024, Democrats must reconnect with their historical working-class base,” said Will Marshall. “The recent PPI/YouGov poll on working-class Americans can give Democrats a blueprint for winning back working America and offering pragmatic, common-sense solutions to our country’s biggest problems.”

The poll contains two parts: a national survey of 860 non-college voters and oversamples of working-class opinions in seven 2024 presidential or Senate battleground states: Michigan, Montana, New Hampshire, Arizona, Georgia, Pennsylvania, and Nevada. The poll surveyed registered voters without a four-year degree (voters with a two-year degree, high school diploma, or less). Results from swing state polls are available upon request.

Key findings from the national poll:

•  Two-thirds of voters say they are worse off and only 21% believe their lives have improved. White non-college voters are especially likely to say things have gotten worse (70%). Pessimism is even higher in many swing states: Arizona (74%), Michigan (74%), and Pennsylvania (75%).

• When presented with a list of reasons why life is harder today, respondents put illegal immigration and automation at the top.

•  When it comes to the economy, voters polled overwhelmingly (69%) name the high cost of living as their top worry. In distant but still significant second place (11%) is the concern that government deficits and debt are too high.

•  When asked why prices have risen so much, 55% of working-class voters picked “government went overboard with stimulus spending, overheating the economy” over the impact of the COVID recession and supply chain bottlenecks as the economy recovered. More than half of voters in each of the swing states agreed.

•  When asked where they think their children will find the best jobs and careers, most voters (44%) chose the communications/digital economy over manufacturing (13%).

•  When asked about student loan forgiveness, 56% of voters (including 59% of Independents) say “paying off this debt is not fair to the majority of Americans who don’t get college degrees…” Democrats were outliers, with only 28% calling loan forgiveness unfair.

•  What the voters do support, enthusiastically and across political fault lines, is “more public investment in apprenticeships and career pathways to help non-college workers acquire better skills” (74%) as well as “affordable, short-term training programs that combine work and learning.”

•  Overall, 41% of voters say climate change is an “existential” problem that demands action, while 34% expressed skepticism. 42% think clean energy incentives will create good jobs and boost the economy, while 37% fear they will raise energy bills and the costs of goods.

•  When asked about education and whom public schools served most, they said political activists (31%), unions (30%) and students (29%), with only 10% choosing parents.

•  When asked on views of the Federal Trade Commission’s lawsuit against Amazon and whether or not voters support ending Amazon Prime’s two-day prime shipping, 47% of voters strongly oppose.

•  And when asked about protecting consumer’s personal data, 80% prefer the government to pass a privacy and data security bill and ensure all companies abide by these regulations instead of the 20% of voters who think the government should break up big tech companies.

Read the full poll and analysis here.

In October, PPI released the companion poll in a report from Claire Ainsley, Director of the Center-Left Renewal Project at PPI, titled “Roadmap to Hope: How to Bring Back Hope to Working-Class Voters in an Age of Insecurity” on opinions of the working class in the U.K.

 

The Progressive Policy Institute (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. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.

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Media Contact: Amelia Fox – afox@ppionline.org

PPI’s Trade Fact of the Week: U.S. Internet policy is suddenly uncertain

Posted on by Max Sherrill

FACT: U.S. Internet policy is suddenly uncertain.

THE NUMBERS: U.S. export growth, 2012-2022*-
Energy 176%
Information & “potentially digitally-enabled” services: 59%
All goods and services: 34%
Agriculture 34%
Manufactured goods: 19%
Other (non-digitally deliverable) services -10%

*Sources: WTO for all goods and apparel; UN Food and Agricultural Organization for fish; Stockholm International Peace Research Institute (SIPRI) for arms sales. SIPRI data covers known transfers of “major conventional weapons.”

WHAT THEY MEAN:

A cryptic late-October comment from the American delegation to the World Trade Organization in Geneva quietly withdraws a set of long-held U.S. “digital trade” policy goals — and in doing so raises questions about whether the U.S.’ traditional “open internet,” “pro-consumer,” “internet freedom,” and “public-interest regulation” approach has changed. The brief and impressively opaque comment:

“Many countries, including the United States, are examining their approaches to data and source code, and the impact of trade rules in these areas. In order to provide enough policy space for those debates to unfold, the United States has removed its support for proposals that might prejudice or hinder those domestic policy considerations. The JSI [“Joint Statement Initiative”, the WTO’s name for the relevant discussion] continues to be an important initiative and the United States intends to remain an active participant in those talks.”

How to interpret this? Background first on the big picture, then the “data and source code” in trade policy more specifically; and finally, lacking anything more to go on than the three-sentence comment above, some questions about what this actually means:

1.  Larger context: “Digital trade” issues are part of a larger U.S. policy pretty consistently pursued since the launch of the World Wide Web, meant to encourage the preservation and future development of an open, universal Internet, with a foundation in user rights and liberty, impartial public-interest regulation, and due process. Several digital trade issues get mentioned, for example, in the “Declaration for the Future of the Internet,” posted in August 2022 by the U.S. and 64 other Internet- and speech-friendly countries in the Western Hemisphere, Europe, Asia, Africa, and the Pacific and still up on the White House and State Department websites. This is a 3-page set of principles and goals for next-generation Internet governance, which along with promoting universal access, privacy, consumer protection, common programs to fight electoral disinformation and online bigotry, and other valuable ideas involves commitments to “ensure that government and relevant authorities’ access to personal data is based in law”, “promote our work to realize the benefits of data free flows with trust,” and “refrain from blocking or degrading access to lawful content, services, and applications.” These are, incidentally, contested ideas which have opponents: other governments, inter alia and perhaps most prominently China’s, envision a quite different future with more rights for surveillance and service interruption, less multistakeholder-ism, and fewer limits on government rights to limit access, data transfers, and privacy.

2.  Nature of issues: The now-‘paused’ “data and source code” proposals refers to four topics, which the U.S. until last month had been discussing with 76 other WTO members in a venue called the “Joint Statement Initiative on Electronic Commerce.” They include (a) cross-border flows of digital data in the course of business, shopping, gaming, email, etc.; (b) guidelines for the circumstances in which governments can require local storage of data and when they shouldn’t; (c) cases when governments can direct businesses to disclose their software codes; and (d) ensuring that trade rules don’t discriminate against digital products.

If one were to look for an analogy in “trade policies for goods” like cars or wine, a useful though not exact comparison would be to “trade facilitation” and agreements on Customs procedures.  Typical U.S. trade agreements require Customs agencies to provide online access to import and export forms, accommodate express delivery shipments, and ensure that other governments don’t use different inspection procedures for containers carried by different shipping lines or cars delivered to different ports. These sorts of rules reduce costs and delays, help toys and flowers move through airports and seaports rapidly and easily, encourage the countries and businesses that make or grow them to compete on quality and price as opposed to hidden policy favoritism, and help port officers focus on law enforcement and public health inspections. In the same way, rules encouraging free flows of data, or discouraging mandatory in-country storage and server construction, help make legitimate services trade — say, email connections, exchange of architectural planning, news and entertainment streams, etc. — easier and cheaper while helping government officials focus their work on cyber-security violations, spam prevention, and other threats.

3.  Economics and trade flows: Digitally delivered services arriving via submarine cable or satellite — software, entertainment, computer technologies, professional stuff such as architecture, new earners like telemedicine and distance education — have a plausible claim to be the fastest-growing form of trade. In the U.S. case, they totaled $720 billion in 2022. By various metrics this was (a) up about 60% in the past decade, roughly twice the growth rate of overall U.S. exports; (b) a quarter of the $3 trillion in total U.S. exports in 2022, and a few hundred billion dollars more than the $380 billion for energy and $195 billion for agriculture, (c) easily the largest digital export figure for any country in the world, and (d) a thirtieth of the U.S.’ $26 trillion GDP. More subtly, digital data flows underpin lots of high-end manufacturing sales.  Examples include cars that notify owners of the need for brake repair or oil change; medical devices providing diagnoses and filling prescriptions for rural clinics, agricultural machinery planting rice when the weather is right, etc. So by whatever measurement, digital trade flows support a large and highly remunerative part of the American economy and it’s quite logical for the government to care about them.

4.  Current Agreements and Rules: The U.S. “digital trade” ideas are not actually experimental, but are live parts of several currently active U.S. agreements as well as the WTO’s incomplete “Joint Statement” discussions. These are Chapter 15 of the U.S.-Korea FTA, which “entered into force” as the jargon puts it in 2012; Chapter 19 of the “U.S.-Mexico-Canada Agreement” which revised the North American Free Trade Agreement in 2020; and a 19-page U.S.-Japan digital trade agreement signed in 2019. Their substance:

(a) People and businesses in participating countries have the right to move data across borders freely (e.g. for an online shopper ordering a set of toothbrushes, or an auto manufacturer whose car corresponds digitally with the home office to request software updates or notify police about an accident), with an exception for any government action “necessary to achieve a legitimate public policy objective” (e.g. anti-spam, cyber-security, protection against disinformation campaigns, etc.).

(b) Government power to require companies to turn over software code to agencies (or, often more the point, to local competing firms) is limited to public-policy regulation and good-faith investigations as opposed to arbitrary and/or discriminatory rules.

(c) Governments can’t be required to store data and build servers within a country, so as to reduce costs (and along with this, the power consumption and consequent carbon emissions) of constructing redundant servers and data centers in numerous countries.

5.  What’s going on? What, finally, does the withdrawal of these ideas at the WTO mean?  The three-sentence statement quoted above doesn’t explain. So rather than speculating, we offer a few questions that pretty badly need an answer:

* Does the administration want “policy space,” so as to be able to limit Americans’ data flows or require exposure of source codes for reasons that go beyond “measure[s] needed to achieve a legitimate public policy objective.”  If so, what sort of things are they thinking about, and what law would authorize it?

* If the data and source code ideas are out of favor at the WTO, are the USMCA, Korea-FTA, and U.S.-Japan Digital Agreement provisions now insufficient? If so, is the administration thinking about changes to them?

* Or is the concern more about foreign governments’ “policy space”?  If so, what are these governments hoping to do that Mexico and Canada (and Japan and Korea) are managing to do without?

* And how do any of these concerns relate to the larger hopes for the next-generation digital world — access and technical interoperability, innovation and economic growth arising from future rises in data flow, public-interest regulation, user privacy, and liberty — set out in the Declaration for the Future of the Internet?

Answers awaited, here and in lots of other places.

FURTHER READING

The Declaration for the Future of the Internet.

The WTO’s Joint Statement Initiative on e-commerce.

The U.S. Trade Representative Office’s brief statement.

Highly displeased response from Sen. Ron Wyden (D-Ore. and Finance Committee Chair).

And similar reaction from Digital Trade Caucus Chairs Suzanne DelBene (D-Wash.) and Darin LaHood (R-Ill.).

Current agreements:

USMCA text (see Chapter 19, “Digital Trade”).

U.S.-Japan digital trade agreement text.

Korea-U.S. Free Trade Agreement, see Chapter 15 on “Electronic Commerce.”

And some PPI background on Internet and digital trade policy: 

Gresser on digital trade policy.

Chief Economist Mandel on regulation of digital platforms.

And Technology Policy Analyst Malena Dailey on transatlantic data flows.

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.

Winning Back Working America: A PPI/YouGov Survey of Working-Class Attitudes

Posted on by Alyssa Brown
SUMMARY AND HIGHLIGHTS BY WILL MARSHALL

INTRODUCTION

This century has witnessed a populist revolt against long-dominant political parties across the democratic world. It’s rooted in working-class discontent with sweeping economic and cultural changes that have bred a profound sense of social dislocation and insecurity.

This phenomenon challenges governing parties of the left and right. But it poses a special test to the U.S. Democrats and other center-left and progressive parties that have traditionally championed the economic prospects and moral outlook of traditional working people.

The new populists offer working-class voters a refuge in old ideas: ethnic nationalism, nativism and protectionism. Conservative parties have tried to compete by co-opting these themes. Liberal and progressive parties have deplored the populists’ illiberal and antidemocratic tendencies while failing to grasp their valid concerns and fears of not being heard.

The Progressive Policy Institute believes America and other liberal democracies need a reinvigorated center-left to turn back the tide of reactionary nationalism that has swept much of the world over the past decade. In January 2023, we launched a new Center-Left Renewal Project headed by Claire Ainsley, formerly a top policy advisor to UK Labour Party leader Keir Starmer.

As it happens, both Labour and the Democrats face crucial national elections next year. While allowing for significant differences in political structure and culture, reconnecting with their historical working-class base is an electoral and moral imperative for both parties.

To help them frame more effective appeals to working-class voters (broadly defined as those without four-year college degrees) the Project commissioned from YouGov public opinion surveys in the United Kingdom and the United States. The former is found in Claire Ainsley’s report, Roadmap to Hope, which was released in October at the Labour Party Conference in Liverpool.

This U.S.-focused companion report, Winning Back Working America, has two parts: a national survey of 860 non-college voters and oversamples of working-class opinion in seven 2024 presidential or Senate battleground states: Michigan, Montana, New Hampshire, Arizona, Georgia, Pennsylvania and Nevada. The interviews were conducted between Oct. 17 and Nov. 6.

Here are some of the key findings of our poll, followed by the national sample. The state oversamples and crosstabs are available on request.

READ THE POLL RESULTS.

 

The Opportunity Cost of Maintaining Copper Networks in California

Posted on by Alyssa Brown

Standards for connectivity have evolved to reflect the transition to the online world, where fast internet connection is now a prerequisite for integral services such as education, healthcare, and access to the global economy. It is more important than ever that Americans have access to reliable, updated broadband options, and that both federal and state policy support the availability of these services. Yet, in California, outdated regulatory requirements may be holding the state back from widespread updates to network infrastructure needed to connect underserved communities to the benefits that come with high speed internet access.

Today, the Progressive Policy Institute (PPI) released a new policy brief titled “The Opportunity Cost of Maintaining Copper Networks in California,” analyzing the challenges and costs posed by regulatory requirements to maintain outdated copper networks in California. Report author Malena Dailey, PPI’s Technology Policy Analyst, quantifies these costs in her brief and highlights the importance of updating policy to ensure that California can efficiently allocate available resources to expand broadband connection across the state.

Companies designated as Carriers of Last Resort in California are required to maintain the copper wires that carry voice traffic to certain customers, an expensive and arduous process which prioritizes legacy technology over modern network infrastructure. Though it is critical that connections are maintained in places where there are no alternatives, requiring maintenance of these networks may prevent reallocation of investment towards connecting rural communities to updated broadband.

“California can advance its broadband goals by allowing the replacement of copper networks, empowering access to the next generation of technology for those who have previously lacked access to the benefits of online services,” said Malena Dailey. “For California to reap the full benefits of private and public investment in telecommunications infrastructure, it is critical that state policies enable service providers to invest in new technology rather than sink resources into maintaining legacy copper networks.”

Download the policy brief here.

The Progressive Policy Institute (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. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.

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Media Contact: Amelia Fox, afox@ppionline.org

The Opportunity Cost of Maintaining Copper Networks in California

Posted on by Max Sherrill

INTRODUCTION

Standards for connectivity have evolved to reflect the transition to the online world, where fast internet connection is a prerequisite for integral services such as education, health care, and access to the global economy. As such, it has become more important than ever that Americans have access to reliable, updated broadband options, and that both federal and state policy support the availability of these services.

In California, these priorities have been recognized by Governor Newsom, who signed legislation directing $6 billion to expand broadband coverage for all Californians in 2021. “Delivering broadband to all is essential to California’s success,” says Newsom. “Access to high-speed internet can mean the difference between launching a successful career and being without work.”

Meanwhile, the Biden administration has made a federal commitment to expanded service, with $65 billion being allocated for broadband deployment as part of the infrastructure Investment and Jobs Act in 2021. Of this funding, at least $1.86 billion is being directed to California through the Broadband Equity, Access, and Deployment (BEAD) program, directed specifically towards underserved and high-cost areas.

The influx of government support and rising consumer demand have enabled internet service providers to invest heavily in highspeed, high-capacity wireless and fiber cable connections. However, in the face of California’s ambitious goals for widespread coverage, the transition needed to enable the modernization of network infrastructure may be hampered by longstanding regulatory requirements.

By designating certain service providers as “carriers of last resort,” some states impose requirements to provide basic telephone service to all customers within a designated service area. The intention is to ensure all consumers have access to voice services, especially in rural and underserved locations. Today, companies are required to continue to
maintain the copper wires that carry voice traffic, rather than working to replace legacy networks with updated technologies that provide modern internet services. Though the FCC addressed this at a federal level through a 2019 order, California is one of at least 38 states that continue to impose such requirements on carriers.

Now, with rapidly improving standards for connectivity in an ISP market that has proved more competitive over time, the monetary and opportunity costs associated with the state requirement to maintain deteriorating copper networks are mounting. This policy brief quantifies these costs and highlights the importance of updating policy for network infrastructure to ensure that California can efficiently allocate available resources to expand broadband connection across the state.

Read the full report.

Ritz for Peter G. Peterson Foundation: Setting Up A Fiscal Commission For Success

Posted on by Max Sherrill

By Ben Ritz

The federal government is in desperate need of a fiscal correction. In just the last year, the annual budget deficit more than doubled from $933 billion to $2 trillion. Such explosive growth in federal borrowing might be warranted to combat an economic emergency such as the COVID pandemic, when the unemployment rate soared to 13%. But unemployment in both 2022 and 2023 has consistently been under 4% — a level not seen for such a prolonged period since the 1950s. Among economists, it’s axiomatic that in boom times such as these the government should be paying down its debts, not running them up.

The problem is only set to get worse in the coming years as deficits continue to grow with no end in sight. This borrowing comes at an enormous cost: annual interest payments on the national debt are at their highest level as percent of economic output since they peaked in the 1990s. By 2028, the government is projected to spend more than $1 trillion each year just to service our ballooning debts — more than it spends on national defense. The United States is potentially entering a vicious cycle whereby higher deficits lead to both a larger stock of debt and higher inflation, which the Federal Reserve must combat by raising the rate of interest paid on both public and private debts. These skyrocketing borrowing costs threaten to crowd out other critical public investments and slow economic growth.

For the Peter G. Peterson Foundation’s “Fiscal Commission” essay series

 

Read more on the PGPF website.

Jacoby for Los Angeles Times: Kyiv’s dark moment and America’s fateful choice

Posted on by Max Sherrill

What a difference a few weeks makes. When I left Kyiv in September for a short trip to the U.S., the late summer weather was perfect and the mood in Ukraine was upbeat and determined. There had been heavy fighting on the southern and eastern fronts — the long-awaited counteroffensive was going more slowly than many had hoped.

But by and large, the country I left was the Ukraine the world had been rooting for since February 2022: Little David pushing back against the Russian Goliath — plucky, resourceful, resilient and still surprising us with successes on the battlefield.

By the time I returned to Kyiv, the world had turned upside down. Hamas terrorists had launched a 21st century pogrom in southern Israel. Israelis were retaliating with overwhelming force in Gaza. Worst of all for Ukraine, the U.S. aid Kyiv relies on to prosecute the war was in jeopardy, with a largely friendly Senate and far less supportive House on a collision course as they debated President Biden’s request for another $61.4 billion in military and humanitarian support.

The mood in the city was subdued — as one of my friends put it, this is a “dark moment.” An early burst of support for Israel — huge blue and white flags projected on landmarks and billboards across Ukraine — had subsided into worry. Would the fighting in the Middle East steal the world’s attention? With winter approaching and more of last year’s brutal blackouts looming, stores were filled with shoppers buying bottled water and canned goods. The residents of my apartment building chipped in for an industrial generator.

Read more in The Los Angeles Times.

Jacoby for The Messenger: Why Are Europe and America Taking Opposite Approaches to Ukraine?

Posted on by Max Sherrill

A good movie director would use a split screen: on one side, Washington, D.C., bitterly divided and uncertain about continuing aid to Ukraine and, on the other, Brussels, where both the legislative and executive arms of the European Union (EU) are standing firm in their support for Ukraine. Last month, members of European Parliament voted overwhelmingly in favor of €50 billion ($53.4 billion USD) in continued aid, and this week, the European Commission recommended that talks about Ukrainian membership in the EU should begin early next year.

Many Americans are skeptical of the EU and loath to admit it might know something we don’t know. Yet, Washington should take a page from Brussels’ book — not just its support of Ukraine’s fight to defeat Russian aggression, but also its understanding of what’s at stake for Europe — and the U.S. — as Ukraine evolves toward a fully democratic market economy aligned with the West.

Ukraine’s long, hard road toward joining the EU began in earnest exactly 10 years ago, in autumn 2013, when a million people took to the streets to support the Maidan Revolution. Crowds brandished EU flags and hand-printed signs declaring, “We are Europe,” “We choose Europe, not Russia.” Then, in early 2014, 100 protesters died in brutal street clashes defending Western values against pro-Russian militants. That year, Russia invaded and annexed the Ukrainian region of Crimea.

Read more.

This story was originally published in The Messenger on November 11, 2023.

Jacoby for Washington Monthly: Not So Quiet on Ukraine’s Southern Front

Posted on by Max Sherrill

Living in Kyiv, you learn to put up with air-raid alerts. Sirens wail over the city, and an app blares from your phone, warning you to shelter from incoming missiles. In the industrial city of Zaporizhzhia, 25 miles from the front line of the Ukrainian counteroffensive, people shrug off the sirens, which sound a half dozen times a day and often more. “It’s just Russian music,” one local official joked when I visited recently, “bad Russian music.”

What matters in Zaporizhzhia: not warnings but actual explosions, which have left ugly scars across the city, including many boarded-up buildings on the main street. Yet few people take shelter even when they hear a nearby blast or see a plume of dark smoke on the horizon. “I used to be afraid,” explained one young woman who runs an online business. “But you get used to it. Everyone is used to it. Now we just get on with our lives.”

For many, “the front” evokes World War I trenches at Verdun and the Somme or the carnage a generation later at Stalingrad and the Battle of the Bulge. Zaporizhzhia isn’t on the line of contact; there are no trenches or firefights in the streets. But the fighting outside town hangs over the city, ever-present and menacing in a way you don’t feel in Kyiv.

I’d been to Zaporizhzhia before—two trips last spring before the start of the counteroffensive—and I returned this fall full of apprehension. It’s a city with a long history of warfare: first, as the home of the 17th-century Cossack fighters who defended the territory that is now Ukraine from Russian, Polish, and Crimean invaders and then, later, the site of bitter battles between the Nazis and the Red Army. What I wondered now: How was the city holding up as the grinding counteroffensive dragged into its fourth month?

Read more in Washington Monthly.