Category: Uncategorized

Child Care, It’s a Workforce Issue!

Posted on by The Progressive Policy Institute

In this episode of the Radically Pragmatic podcast, PPI’s Taylor Maag, the Director of Workforce Development Policy speaks with national and state leaders, Linda Smith from the Bipartisan Policy Center and Ashli Watts from the Kentucky Chamber on child care policy in our nation, how it is affecting women in the workforce and bold new solutions to address child care challenges at scale.

Follow Taylor on Twitter here.

Learn more about the New Skills for a New Economy here.

Learn more about the Progressive Policy Institute here.

Marshall for The Hill: Democrats’ Big Test on Crime

Posted on by The Progressive Policy Institute

By Will Marshall

 

What to do about an upsurge in violent crime has become a burning issue in America’s deep blue urban centers. That’s why Democrats are riveted on the April 4 runoff election that will pick Chicago’s next mayor.

It’s a duel between two Democrats with strikingly different outlooks on law and order. The outcome will go far to determine whether their party will rebuild its credibility on public safety or continue to let Republicans enjoy an unearned advantage on a potent issue.

Read more in The Hill.

PPI’s Trade Fact of the Week: Southeast Asians work the longest hours

Posted on by The Progressive Policy Institute

FACT: Southeast Asians work the longest hours.

THE NUMBERS: Countries with the longest and shortest known working years*

2017                 Cambodia, 2,456 hours; Germany, 1,354 hours
2000                South Korea, 2509 hours; Germany, 1,452 hours            
1980                 South Korea, 2,864 hours; Sweden, 1,517 hours
1950                 Chile, 2,678 hours             
1929                 United States, 2316 hours
1900                 France, 3,115 hours
1870                 Belgium, 3,483 hours; U.K., 2,976 hours

* Our World in Data. Note that data (a) is available for 70 countries in 2017 and fewer in earlier years, (b) covers “non-agricultural workers,” so is less dependable for countries with large rural/farming populations, and (c) applies to formal-sector workers for whom data is reported and available, and misses sometimes very large informal-sector workforces.


WHAT THEY MEAN:

The Washington Post reports on an unusual proposal from the Korean Labor Ministry:

“South Korea’s conservative government has proposed increasing the legal cap on weekly work hours from 52 to 69 … South Koreans already toil more than many of their overseas counterparts. They work an average of 1,915 hours a year, compared with 1,791 hours for Americans and 1,490 hours for the French, who have a 35-hour workweek, according to figures from the Organization for Economic Cooperation and Development. The OECD average is 1,716 hours.”

Comparisons like these are a bit fraught. The OECD, whose data covers 44 middle- and upper-income countries plus averages for the EU and the OECD membership, very responsibly warns that its “data are intended for comparisons of trends over time; they are unsuitable for comparisons of the level of average annual hours of work for a given year, because of differences in their sources and method of calculation.” Broader attempts to add low-income country data (for example the 70-country table published by Our World in Data) are even riskier, (a) low-income country statistical agencies may be less accurate; (b) coverage of informal-sector workers in low- and middle-income countries will be either much spottier than formal-sector work or nonexistent; and these surveys typically exclude farm labor, whose share of total jobs is low in high-income regions but often high in low-income countries. All these cautions noted, the available figures do suggest a couple of conclusions:

1. Southeast Asians spend the most time on the job. Our World in Data, whose figures go through 2017, reports that Cambodians — garment-workers in Phnom Penh, hotel maids and concierges around Siem Reap, truckers, and crane operators on the Phnom Penh-Sihanoukville run – spent an average of 2,456 hours on the job that year.* Also in Our World’s top six: Myanmar at 2,438 hours per year, Malaysia and Singapore at 2,238 hours each, and Bangladesh (“South Asian” by geographic convention but in the same neighborhood) at 2,232 hours.  The non-Asian representative in the longest-hour tier is Mexico, at 2,255 hours per year. ASEAN generally is a long-hour region: Thai workers rank 10th in the Our World table with 2,185 hours per year, Vietnam and the Philippines 12th and 13th, and Indonesia 19th with 2,024. To the west and north, India and Pakistan clock in at about 2,100 hours each, with China at a slightly higher 2,174 hours.

2. Europeans spend the least time on the job: Relaxed but efficient Europeans show up at the bottom-hour tiers of all three surveys.  Defying all stereotypes, Germans work the fewest hours, at 1,354 per year in Our World’s 2017 table, and 1,349 hours in OECD’s 2021 figures. This is the equivalent of 38 five-day weeks, assuming 8-hour days, with 14 weeks off. Just above the Germans come Danes, Luxembourgers, Dutch, Norwegians, Icelanders, Austrians, Swedes, and French, all working less than 1,500 hours per year.  EU workers score well on productivity figures, though, so they get a lot done in their limited office/plant/lab/shop time. Americans are pretty near a hypothetical world average (1,757 working hours by Our World’s count and 1,791 hours according to the OECD) with Japan’s 1,738 hours and Australia’s 1,731 about the same. The longest high-income work years turn up in the Baltic states and Taiwan at nearly 2,000 hours each — 30 8-hour days more than Americans — with Hong Kong’s 2,186 hours and Singapore’s 2,238 hours the high-income world’s longest working years.

3. Over time, people work less: In the very big picture, even the world’s highest work-hour totals look modest when matched against those of earlier times. The Our World database includes 11 countries whose labor ministries were able to estimate annual work hours in 1870. All reported over 3,000 hours a year on the job, with Belgium’s 3,455 hours — essentially a ten-hour day, every day with a couple of holidays and no weekends off — looking like the longest year ever measured. The U.K.’s 2,755 hours, the lowest in the 1870 records, is still 300 hours more than Cambodia’s modern estimate.  National holidays, 8-hour-day laws, overtime pay rules, and similar legal and regulatory changes brought these remarkable totals down through much of the 20th century. In the U.S.’ case, the 3,096-hour work year of 1870 fell to 2,605 hours by 1913. In 1950, 15 years after the Fair Labor Standards Act, the work year was just above 2,000 hours.

4. No clear recent pattern: Using a more relatable time frame — say, the last generation’s experience since 1990 or 2000 — no clear pattern appears. The U.S.’ total hasn’t changed much — 1,796 hours in 1990, a bump up to 1,845 in 2000, and 1,796 in 2021. On the other hand, work years have lengthened in much of Asia and parts of Latin America — up by 30 to 84 hours in India, Colombia, Cambodia, the Philippines, China, and Indonesia. Elsewhere, though, Thai workers have cut their 2500-hour year by 310 hours since 2000, Taiwanese by 190 hours, Irish by 187 hours, and Chileans and Costa Ricans by 289 and 155. And as the Korean economy has evolved from a heavy-industry center to a services-and-tech “Hallyu Wave” [link: https://www.progressivepolicy.org/blogs/ppis-trade-fact-of-the-week-squid-game-outdrew-the-world-series-this-year-nov-17-2021/], its working year has fallen by a full 600 hours: 2,677 hours in 1990, 2,509 in 2000, 2,063 in 2017, and most recently 1,909 in 2021.  This is still a bit long by high-income country standards, but represents a drop of 600 hours, or 75 8-hour days, in a single generation. Perhaps this suggests why senior Labor Ministry bureaucrats, remembering their weekend-less youth, may feel that 69 hours a week isn’t too much to ask?

* As an example, the 2,456-hour average may reflect the experience of a very limited fraction of Cambodian workers, as ILO figures show 92% of Cambodians are in informal work, and World Bank data report that 75% of Cambodians live in rural areas.  

 

FURTHER READING:

Data and comparisons:
OECD’s working hour data for 44 countries, the EU as a whole, and the OECD membership averages

Our World in Data with working hours per worker in 1870, 1900, 1913, 1929, 1938, and 1951 (for selected countries), and 1980-2017 for 70 countries

The Conference Board has 2021 data for 41 countries (Americas, Europe, wealthy Asia) in table 9, under “Labor Productivity and Per Capita Income Levels and the Effects of Working Hours and Labor Utilization, 2021”

And the International Labor Organization’s working-hour database

The U.S. Geological Survey’s mineral commodity statistics, covering steel, aluminum, and 130 other substantives from abrasives, aggregates, and aluminum to yttrium and zirconium, with salt, pumice through steel, aluminum, rare earth elements, cement, gold, iridium/osmium/platinum, gemstones, tin, and more.

Korea:
WP’s Andrew Jeong (subs. req.) on work-hour law in Korea

The Labor and Employment Ministry isn’t saying much (at least on its English-language page)

And PPI’s Lisa Ly looks at Squid Game, K-pop, and the “Hallyu Wave” economy

Elsewhere:
Germany’s Federal Ministry of Labor and Social Affairs regulates the shortest working year in the world

Singapore’s Ministry of Manpower (under the maternal-sounding “mom.gov.sg”) handles the wealthy world’s longest working year

Cambodia’s Labor Ministry

… and Cambodia’s Better Factories program, an ILO-launched system operating since 1999, offers independent inspection for hours, union rights, sexual harassment, and other labor rights standards for garment workers in 557 factories

The U.S.’ Department of Labor on work-hours, overtime, holidays and vacation, and more

And for those with some extra time:
Juliet Schor’s The Overworked American: The Unexpected Decline of Leisure (1993) wonders why, somewhere in the late 1970s, American workers stopped demanding more time off

 

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 Progressive Economy 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

Weighing the risks of right to repair for consumer tech products

Posted on by Alyssa Brown

Who has the “right to repair” a product after it’s been purchased? The intuitive answer would be the person or business that purchased it, but in the case of products with sophisticated technology and software — an increasingly common characteristic for just about any product — this becomes more complicated. In these cases, repairs likely require specialized equipment or software programs from the manufacturers, which in turn runs a higher risk of exposing trade secrets or reducing the security built into the product by requiring backdoor entry for repairs or diagnostics.

Legislators have grappled with trying to find this balance for some time. For example, take the case of cars, which now have complex onboard computers. Massachusetts passed a comprehensive right to repair bill in 2013. It required that manufacturers allow independent mechanics access to the same diagnostic and repair information provided to franchised dealerships. Similar issues have arisen around repairs for other complex technologies such as medical and agricultural equipment, for which 11 states have introduced legislation creating a general right to repair.

But consumer tech, such as smartphones, raises the issue of security to a new level. Opening any device to repair by third parties increases its vulnerability to unauthorized, unwanted software such as malware or spyware. It also gives third-parties access to sensitive user data which, without proper vetting of the third party, may put consumers at risk. Things like phones, tablets, and laptops store an enormous amount of personal data, and by ensuring third parties can access devices, backdoor security risks are inevitable.

Device makers have legitimate concerns about brand integrity and proprietary information. Consumers may blame manufacturers if unauthorized repairs damage products in ways that may not be immediately obvious, either because of software issues or incorrect assembly. In these cases, there is also the risk that any third party looking to get into the repair business will have access to technology and potential trade secrets, which would otherwise be the property of the manufacturer.

In an attempt to balance the benefits of third-party repair with potential business and consumer harms, New York has passed the Digital Fair Repair Act, which will go into effect this summer. A sort of compromise legislation, the New York approach will require manufacturers to provide manuals and parts to both consumers and independent repair providers, but with a few significant limitations.

Notably, the bill does not require any sort of backdoor access to bypass locks on a device. This provision ensures that third parties, and even consumers themselves, will be able to make repairs, but does not give up control entirely in a way that compromises the basic level of data security offered by the device. The bill also shields the original manufacturer from legal liability for damages to a product by a third-party during repair, while allowing the manufacturer to supply assemblies of parts rather than individual pieces.

Nonetheless, state efforts to address repairs for consumer tech goods point to the larger question of the need for right to repair legislation at the federal level. As is true in most cases which impact national industry, a national framework would be better than a patchwork of state legislation. However, as we observe the impacts of the legislation in New York, careful consideration must be given to the ways in which consumers may be harmed by regulatory action. It also must be considered how these fit into existing competition law with regard to aftermarkets, and the impacts to businesses outside of the consumer tech space.

Though the momentum currently lies in the states, Congress will ultimately have to act to create a national standard for right to repair. In the meantime, states should heed New York’s example and ensure any bill has the safety provisions necessary to ensure consumer protections, in contrast with bills currently moving in states like Washington and Minnesota, which both take a looser approach to repair where third parties are allowed more full access to devices for repair. Until Congress is ready to address this issue for both consumer tech products and other high-tech devices, states should take a cautious approach to legislation that will impact the national market.

 

 

 

 

PPI Statement on President Biden’s FY 2024 Budget Proposal

Posted on by The Progressive Policy Institute

Ben Ritz, Director of the Progressive Policy Institute’s Center for Funding America’s Future, released the following statement on President Biden’s new budget proposal:

“With inflation still running high and the national debt on track to break its historical record as a share of economic output three years sooner than projected last year, both parties should be working together to improve our nation’s finances. We thus applaud President Biden’s decision to call for nearly $3 trillion of deficit reduction over the next decade in his Fiscal Year 2024 budget proposal to Congress — a target that’s three times as ambitious as the one he set in his proposal last year.

“However, we are concerned that this budget does not really tackle the financial challenges facing Social Security and Medicare. The budget’s proposed reforms are largely limited to improving the solvency of Medicare Part A Hospital Insurance, which only finances about 40% of Medicare spending. They do so in part by diverting savings from the other components of Medicare, such as Part D prescription drug benefits, thereby making the broader budget’s financial problems harder to solve. And the proposal makes no meaningful attempt to improve the solvency of Social Security, which faces automatic benefit cuts of over 20% when its trust funds are exhausted in roughly a decade.

“If the president’s preferred approach — one on which he hasn’t even had to try to compromise with Republicans yet — can only close part of the projected funding shortfall for 40% of the smaller of our two biggest underfunded entitlement programs, that’s a clear sign more options must be put on the table. To strengthen the foundation of American retirement security and put our budget on a more sustainable trajectory, we urge the president to reconsider his blanket opposition to benefit reforms and tax increases that may hit some folks earning under $400,000 per year.

“We also challenge House Republicans to counter the president’s proposed budget with their own vision for our fiscal future. If they continue to rule out reasonable revenue increases and heed Donald Trump’s calls to take Social Security and Medicare off the table, Republicans will have no way to produce a plausible plan for reining in the growth of our national debt. Combined with their threats for debt-limit brinkmanship, such an approach would prove the GOP to be far more fiscally irresponsible than the administration.”

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.

Launched in 2018, PPI’s Center for Funding America’s Future  works to promote a fiscally responsible public investment agenda that fosters robust and inclusive economic growth. We tackle issues of public finance in the United States and offer innovative proposals to strengthen public investments in the foundation of our economy, modernize health and retirement programs to reflect an aging society, and transform our tax code to reward work over wealth.

Follow the Progressive Policy Institute.

###

Media Contact: Tommy Kaelin – tkaelin@ppionline.org

Statement from PPI’s Mosaic Project on International Women’s Day

Posted on by The Progressive Policy Institute

Jasmine Stoughton, Project Director of the Mosaic Project at the Progressive Policy Institute (PPI), released the following statement in recognition of International Women’s Day:

“For years, women of all backgrounds have been continually underrepresented and unheard. In today’s world, the fight for diversity and equality has never been more important. On International Women’s Day, it’s imperative we recognize the steps we have made, while also keeping in mind the strides that still need to come.

“The Mosaic Project is proud of its work to uplift and promote women from all backgrounds in their respective policy fields. While policy conversations in the past have lacked essential voices, Mosaic is committed to continuing the fight for a seat at a male-dominated table.”

The Mosaic Project is a network of diverse women with expertise in the fields of economics and technology. Mosaic programming aims to bring new voices to the policy arena by connecting cohort members with opportunities to engage with top industry leaders, lawmakers, and the media.

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.

Follow the Mosaic Project.

###

Media Contact: Tommy Kaelin – tkaelin@ppionline.org

An Overview of Global AI Regulation and What’s Next

Posted on by The Progressive Policy Institute

Artificial intelligence (AI) is the new subject of large-scale regulation by governments around the world. While AI has many benefits, such as increased productivity and cost savings, it also presents some risks and challenges. For example, AI systems can sometimes be biased or discriminatory, leading to unfair outcomes. They can also raise concerns about privacy and data security, as these systems often rely on large amounts of personal data.

As a result, governments around the world are starting to introduce regulations to ensure that AI is developed and used in a safe, responsible, and ethical manner. These regulations cover a range of issues, from data privacy and security to algorithmic transparency and accountability.

This piece will unpack the novel AI regulation in the U.S., EU, Canada, and China and how each country approaches the technology as they seek to balance economic, social, and public priorities with innovation.

European Union: Artificial Intelligence Act (AIA)
The European Union introduced the Artificial Intelligence Act (AIA) on April 21, 2021. The current text proposes a risk-based approach to guide the use of AI in both the private and public sectors. The approach defines three risk categories: unacceptable risk applications, high-risk applications, and applications not explicitly banned. The regulation prohibits the use of AI in critical services that could threaten livelihoods or encourage destructive behavior but allows the technology to be used in other sensitive sectors, such as health, with maximum safety and efficacy checks by regulators. The legislation is still under review in the European Parliament.

The AI Act is a type of legislation that regulates all automated technology rather than specific areas of concern. It defines AI systems to include a wide range of automated decision-makers, such as algorithms, machine learning tools, and logic tools, even though some of these technologies are not considered AI.

Canada: The Artificial Intelligence and Data Act (AIDA)
In June of 2022, Canadian Parliament introduced a draft regulatory framework for Artificial Intelligence using a modified risk-based approach. The bill has three pillars, but this piece will just examine the section dealing with AI, the Artificial Intelligence and Data Act (AIDA). The goal of Canada’s AI rules are to standardize private companies’ design and development of AI across the provinces and territories.

The modified risk-based approach is different from the EU’s approach as it does not ban the use of automated decision-making tools, even in critical areas. Instead, under the AIDA regulation, developers must create a mitigation plan to reduce risks and increase transparency when using AI in high-risk systems. The plan should ensure that the tools do not violate anti-discrimination laws. These mitigation plans or impact assessments aim to decrease risk and increase transparency in the use of AI in social, business, and political systems.

United States: AI Bill of Rights and State Initiatives
The United States has yet to pass federal legislation governing AI applications. Instead, the Biden Administration and the National Institute of Standards and Technology (NIST) have published broad AI guidance for the safe use of AI. In addition, state and city governments are pursuing their own regulations and task forces for AI use. In a break from the EU model, regulation thus far targets specific use cases rather than seeking to regulate AI technology as a whole.

At the federal level, the Biden Administration recently released the AI Bill of Rights, which addresses concerns about AI misuse and provides recommendations for safely using AI tools in both the public and private sectors. This AI strategy would not be legally binding. Instead, the Bill of Rights calls for key safety strategies such as greater data privacy, protections against algorithmic discrimination, and guidance on how to prioritize safe and effective AI tools. While the blueprint is not legally binding, it serves as a guide for lawmakers at all levels of government who are considering AI regulation.

In addition, NIST, which is an agency in the Department of Commerce that develops technology standards, published standards for managing AI bias. NIST also tracks how the public sector integrates AI tools across the federal government.

In 2022, 15 states and localities proposed or passed legislation concerning AI. Some bills focus on regulating AI tools in the private sector, while others set standards for public-sector AI use. New York City introduced one of the first AI laws in the U.S., effective from January 2023, which aims to prevent AI bias in the employment process. Colorado and Vermont created task forces to study AI applications, such as facial recognition, at the state level.

China: Algorithm Transparency and Promoting AI Industry Development
China has set a goal for the private AI industry to make $154 billion annually by 2030. China has yet to pass rules on AI technology at large. Recently, however, the country introduced a law that regulates how private companies use online algorithms for consumer marketing. The law requires companies to inform users of AI for marketing purposes and bans the use of customer financial data to advertise the same product at different prices. However, not surprisingly, the law does not apply to the Chinese government’s use of AI.

Along with China’s federal regulation, in September of 2022, Shanghai became the first province to pass a law focused on private-sector AI development. The law titled Shanghai Regulations on Promoting the Development of the AI Industry provides a framework for companies in the region to develop their AI products in line with non-Chinese AI regulations.

Next Steps for Global Regulation:
Artificial intelligence is a promising tool that is stimulating global growth and driving the future of innovation. Despite the positive impacts of AI, there is no question that some regulation is needed to combat the misuse of AI and to protect consumers.

The different approaches summed in this piece offer methodologies for how policymakers around the world are approaching specific harms from AI, as well as AI as a whole. The EU’s approach regulates the use of any automated decision-making tools and outlines the sectors where they can and cannot be used. The U.S. offers voluntary recommendations and standards at the federal level, with states and cities pursuing their own targeted studies and rules based on specific harms. The modified risk-based approach in Canada regulates all AI tools but stops short of banning the technology in certain spheres by allowing companies to define their own risk-mitigation strategies. And the Chinese approach seeks to increase transparency for consumers and become a global power in AI standards.

To prepare, companies will need to further develop global stances on AI ethics and compliance for their products in order to meet transforming regulations. In addition, legislators should focus on legitimate harms to consumers and keep apprised of how stricter regulatory regimes affect AI innovation.

PPI’s Trade Fact of the Week: U.S. steel and aluminum output have changed little since 2017

Posted on by The Progressive Policy Institute

FACT: U.S. steel and aluminum output have changed little since 2017.

THE NUMBERS: Steel production in the United States –

2000                                   102 million tons
2001-2010 average            95 million tons       
2011-2017 average             84 million tons
2017 total                           81.6 million tons
2018-2022 average            83 million tons
2022 total                           82 million tons (first estimate)

 

WHAT THEY MEAN:

A passage from the Commerce Department’s January 2018 “Section 232” report on the national security implications of steel trade argues for a tariff or global quota, on the grounds that this would (a) reduce imports, (b) thus allow U.S. mills to run at 80% capacity instead of the 74% measured in 2017, and so finally (c) secure a U.S. national security need for long-term sources of locally cast metal.  Note in particular the leap of faith in the third sentence: “If a reduction in imports can be combined with an increase in domestic steel demand, as can be reasonably expected …”:

“By reducing import penetration rates to approximately 21 percent, U.S. industry would be able to operate at 80 percent of their capacity utilization. Achieving this level of capacity utilization based on the projected 2017 import levels will require reducing imports from 36 million metric tons to about 23 million metric tons. If a reduction in imports can be combined with an increase in domestic steel demand, as can be reasonably expected [with] rising economic growth rates combined with the increased military spending and infrastructure proposals that the Trump Administration has planned, then U.S. steel mills can be expected to reach a capacity utilization level of 80 percent or greater. This increase in U.S. capacity utilization will enable U.S. steel mills to increase operations significantly in the short-term and improve the financial viability of the industry over the long-term.”

The Department eventually recommended a 25% tariff on most imported steel, and a similar 10% tariff on most imported aluminum, and received these in March 2018. The tariffs are mostly still in place (along with intense controversies between the U.S. and its allies, and at the WTO), though modified by Biden administration agreements with the U.K., EU, and Japan for duty-free imports up to a particular annual quota level.

How do the results look five years later, when compared with the report’s 2018 predictions? Useful figures come from the U.S. Geological Survey, which each year produces concise 2-page reports on mining, smelting, proven reserves, shares of world production, and other stats for 138 metals and minerals, from abrasives and aggregates to yttrium and zirconium, with salt, talc, tin, crushed rocks, gemstones, gold, rare earth elements, platinum group metals, steel, and aluminum in between. This year’s steel section, out January 31, reports the following:

(1) Output: U.S. raw steel production, at 82 million tons in 2022, was about the same as the 81.6 million tons in pre-tariff 2017, after ticking up to 87.8 million tons in 2019 and then dropped during and since the COVID pandemic. The total is more or less the same as the average output over the last decade or in the five pre-232 years.

(2) Capacity utilization: The Federal Reserve’s “FRED” database reports U.S. steel capacity utilization at 72.6% in December 2022, slightly below the 74.0% reported in December 2017. Full-year average figures were 73.5% in 2017 and 74.7% in 2022.

(3) Domestic demand: USGS’ calculates U.S. ‘apparent consumption’ of steel at 96 million tons in 2022, down a bit from 99 million tons in 2017. The 2022 figure is essentially equal to the 2007-2017 average of 95.5 million tons per year (and far below the 104 million-ton average from 1996-2006).

By these measures, the U.S. steel industry looks about the same in 2022 as it did in 2017. Thus the Commerce Department’s prediction that growth plus public policy would create “an increase in domestic demand” for steel, and long-term higher capacity utilization despite the higher prices tariffs would create, didn’t pan out. Two other measures, though, do show some changes:

(4) Trade: U.S. imports of steel were 30 million tons in 2022, well below the 42.4 million tons reported for 2017 and slightly below the 32 million-ton average from 2008 to 2017. U.S. steel exports are also down, though, from 9.6 million tons in 2017 to 8.0 million tons. In effect, since the tariffs U.S. producers have gained some market share within the United States, but lost a bit worldwide.

(5) Employment: USGS finds blast furnaces and steel mill employment down from 80,600 in 2017 to 75,000 in 2022, and foundry employment from 65,000 to 50,000. (More recent Bureau of Labor Statistics shows smaller declines, from 82,000 to 80,000 in mills and from 117,000 to 108,000 in foundries.) Either way, this isn’t a great industrial measure, since lower employment with identical output can easily reflect investment in technologies and higher productivity.

The aluminum story seems pretty similar. USGS’ aluminum survey reports 741,000 tons of primary aluminum output in 2017, rising to 1.09 million tons in 2019 and then falling back to 860,000 tons in 2022. As with steel, 2022 aluminum imports and exports were both below their 2017 levels, with imports down from 6.2 million tons in 2017 to 5.9 million tons in 2022, and exports from 1.3 million tons to 1.0 million tons. Their figure for aluminum import market share has oscillated more violently than that for steel, having risen from 33% in 2014 to 59% in pre-tariff 2017, falling to 38% in 2020 during the COVID pandemic and 41% in 2021, and then jumping back up to 54% in 2022.

In sum, imports of both metals did in fact drop after the tariffs; but the Commerce Department’s anticipation of higher output and higher capacity utilization rates didn’t materialize, and its expectation that tariffs would be consistent with rising domestic use of these metals looks a bit optimistic.

 

FURTHER READING:

The “Section 232” site for the Commerce Department’s Bureau of Industry and Security, with links to the 2018 reports on steel and aluminum.

… or direct to the 2018 steel report.

… and direct to the 2018 aluminum report.

FRED (“Federal Reserve Economic Data”) has steel capacity utilization trends back to 1970.

The U.S. Geological Survey’s mineral commodity statistics, covering 132 substantives from abrasives, aggregates, and aluminum to yttrium and zirconium, with salt, pumice through steel, aluminum, rare earth elements, cement, gold, iridium/osmium/platinum, gemstones, tin, and more in between.

 

 

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 Progressive Economy 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

PPI Announces Hiring of Sam Knapke as New Congressional Policy Fellow, Supporting the New Democrat Coalition

Posted on by The Progressive Policy Institute

Today, the Progressive Policy Institute (PPI) announced Sam Knapke has been hired as its new Congressional Policy Fellow to be placed in the office of the New Democrat Coalition (NDC). This fellowship program is designed to support the NDC’s policy staff as they craft pragmatic policy solutions to address the nation’s toughest challenges.

“I am beyond excited to partner with PPI and join the New Dem team. Working to advance the legislative priorities of communities across the country has long been a career goal of mine and I look forward to enhancing the coalition’s policy staff,” said Sam Knapke.

PPI’s Congressional Fellowship program provides fellows with a unique opportunity to gain valuable Capitol Hill experience and learn more about the legislative process by working within the NDC. As a Policy Fellow, Knapke will report directly to NDC staff and support its legislative team by analyzing legislative issues and proposals, developing and coordinating staff and Member briefings, and managing NDC and stakeholder relationships.

Knapke is currently finishing up his master’s degree in International Affairs from the Johns Hopkins School of Advanced International Studies. Knapke comes to PPI with experience working in the State Department and the Embassy of the United Arab Emirates.

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.

As one of the largest ideological caucuses in the House of Representatives, the New Democrat Coalition is solutions oriented caucus seeking to bridge the gap between left and right by challenging outmoded partisan approaches to governing. Its Members are committed to pro-economic growth, pro-innovation, and fiscally responsible policies. Learn more about the NDC and its members by visiting newdemocratcoalition.house.gov.

###

Media Contact: Tommy Kaelin; tkaelin@ppionline.org

PHOTO RELEASE: Senator Ben Cardin Joins PPI for Briefing on New Report Encouraging Entrepreneurial Opportunities for Returning Citizens

Posted on by The Progressive Policy Institute

 

 

This week, Senator Ben Cardin (D-MD) joined the Progressive Policy Institute for a Capitol Hill briefing on the PPI Metro Federalism Caucus’s new report titled, “From Prison to Business: Entrepreneurship as a Reentry Strategy.” Senator Cardin, Chair of the Senate Small Business Committee, was joined by three panelists, Manu Delgado-Medrano, Research Director at Association for Enterprise Opportunity, Kristi C. Whitfield, Director of DC Department of Small & Local Business Development, and Maurice “Chef Reese” Dixon, Business owner who has participated in the DSLBD program. The discussion was moderated by New Democracy’s Matti Miranda.

In tandem with this week’s event, Senator Cardin introduced the Necessary Entrepreneurship Workshops via the SBA to Transform and Assist Re-Entry Training Act (NEW START) Act, which awards grants to provide entrepreneurial training and opportunities for returning citizens — previously incarcerated individuals — through a new reentry program within the U.S. Small Business Department (SBA).

“Entrepreneurship can be a critical lifeline for justice impacted individuals, and it can provide inherent benefits for their families and their communities. These entrepreneurs are less likely to recidivate and more likely to employ other justice impacted individuals, creating a positive multiplier effect,” said Chair Cardin. “I applaud the PPI report and appreciate their support for my NEW START legislation. The NEW START Act will help organizations that are on the ground administering entrepreneurial development programs and training to this community. The time has come to identify additional areas where we can come to a bipartisan consensus on how to produce meaningful change for the more than 70 million Americans with a criminal history,” said Senator Cardin, Chairman of the Small Business and Entrepreneurship Committee.

“Second chances are part of the American dream. Providing returning citizens the tools to turn their lives around through entrepreneurship is both a win for our national economy and our local economies. As our new report outlines, entrepreneurship is key in breaking the cycle of recidivism for returning citizens, and — with supports from federal and local policymakers — can be a method in overcoming major barriers to economic security. PPI applauds Chairman Cardin for his leadership in sponsoring the NEW START Act, and thanks the Senator for joining PPI for this timely Capitol Hill briefing on a critically important legislative priority,” said Will Marshall, President of the Progressive Policy Institute.

“Reform of our justice system must include reintegration support for those who were previously incarcerated as this report makes abundantly clear,” said Congresswoman Marilyn Strickland (WA-10), Co-Chair of PPI’s Metro Federalism Caucus.“We must do more to support critical training programs which allow returning citizens to build valuable skills and achieve economic security.”

“It’s important to understand there are two things that every human being has in common. One of them is that we all make mistakes. The other one is that mistake does not characterize who you are today. I say that because that’s the life of a returning citizen. Everyone that makes a mistake, is not who they are today. … What I’m thankful for is that I did not allow the stigma or the mistake to stop me from achieving,” said Maurice “Chef Reese” Dixon.

The U.S. has the highest incarceration rate in the world, and those who have a history of involvement with the justice system face barriers to economic security and reintegration into their communities. Entrepreneurship can be a way out of this cycle, but local and federal support is vital for success.

The briefing covered key themes and policy recommendations from the report, highlighting the need for significant reform to remove barriers that prevent those exiting the criminal justice system from achieving economic security and reintegration into their communities.

View the livestream from the event here and see photos here:

Read the Full Report Here:

The Progressive Policy Institute, in partnership with the Kauffman Foundation, has launched the Metro Federalism Caucus to advocate for a more direct and empowering relationship between national and local government leaders. The Caucus consists of former local officials who now serve in Congress, as well as accomplished mayors and former mayors from around the country, whose governing experience and insights can help U.S. policymakers reimagine the division of labor among national, state, and local governments. Its mission is to open a direct channel of communication that does not run through state governments, aimed at forging a stronger partnership between Washington and metro leaders. Organized and supported by PPI and Co-Chaired by Representative Marilyn Strickland (WA-10) and former Mayor of Kansas City Sly James, the Caucus will champion a new approach to federalism that channels resources and decision making directly to metro leaders. PPI calls this decentralizing dynamic “Metro Federalism.”

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.

For more than 30 years, Association for Enterprise Opportunity (AEO) and its over 2,700 member and partner organizations have helped millions of underserved entrepreneurs in starting, sustaining, and growing their businesses. Together, AEO is working to change the way that capital and services flow to underserved entrepreneurs so that they can create jobs and opportunities for all.

Follow the Progressive Policy Institute.

 

###

Media Contact: Tommy Kaelin; tkaelin@ppionline.org

Marshall for The Hill: Dictators stalk the free world again

Posted on by The Progressive Policy Institute

Almost exactly a century ago, Benito Mussolini seized power in Italy and Joseph Stalin took control of the Soviet Union. These events marked the origins of fascist and communist totalitarianism, which soon gave rise to Adolf Hitler in Germany and lit the fuse for both World War II and the Cold War.

That era seemed to come to an end in 1989, when the Berlin Wall came down and the Soviet Union started to implode. Popular uprisings toppled tyrants, and liberalizing winds swept the globe.

But the totalitarian idea is making a comeback today thanks to Russia’s Vladimir Putin and China’s Xi Jinping. Like their predecessors, these dictators are dangerous because they have designs on others’ territory, few domestic checks on their power and contempt for the resilience and resolve of free societies.

Read more in The Hill.

Jacoby for American Purpose: Safeguarding Ukraine’s Civil Society

Posted on by The Progressive Policy Institute

By Tamar Jacoby, Director of the New Ukraine Project

Following a wave of Russian attacks, there was no electricity in Kyiv’s Obolonskyi district administration building—essentially a neighborhood town hall—on the day the local council was formed. I had come to Kyiv to explore how the democratic reforms and nation-building so vibrant in Ukraine before the Russian invasion were faring in wartime; this was my first stop. Some three dozen nonprofit volunteers, legal aid lawyers, municipal officials, and people displaced from their homes in other parts of Ukraine—what experts call internally displaced persons or IDPs—sat in the dark in the ornate Soviet-era meeting hall. The wan winter sunshine filtering in past brocade curtains barely cast enough light to see by, but the activists didn’t seem to notice—they were so excited to be moving forward.

This ad hoc coalition of city officials and civil society advocates had gathered to talk about the needs of the estimated 30,000 IDPs who had settled in Obolon in the year since the Russian invasion. Their vision for the “IDP Council” they were launching: that activists would collect information about the migrants’ needs, and government would use it to tailor more effective services. The nonprofit organization spearheading the project, Charity Foundation Stabilization Support Services, was providing humanitarian aid to displaced people across Ukraine. The group says that it has distributed food and other basic supplies to more than 300,000 internal migrants since last February. But this was different, a step up the food chain—humanitarian help combined with grassroots democracy building. The new council’s motto: “Nothing about IDPs without IDPs.”

Read more In American Purpose

PPI, AEO, and Senator Cardin join forces to promote entrepreneurship for returning citizens

Posted on by The Progressive Policy Institute

Today, the Progressive Policy Institute’s Metro Federalism Caucus and the Association for Enterprise Opportunity (AEO) released a new report highlighting the supports United States federal and local policymakers can implement to help returning citizens — those who were previously incarcerated — find new opportunities through entrepreneurship.  The release of the report will be highlighted at a Capitol Hill briefing, featuring Senator Ben Cardin, who has been a longtime leader of entrepreneurship opportunities for returning citizens.

The report is titled “From Prison to Business: Entrepreneurship as a Reentry Strategy” and is authored by Ann Nguyen, Sidney Gavel, and Manu Delgado-Medrano of AEO.

“Returning citizens in the U.S. face significant barriers to economic security and reintegration into their communities. However, there are opportunities for U.S. government, civic, and business leaders to help the stream of returning citizens find good jobs, achieve financial stability and, if they have the aptitude and inclination, go into business for themselves,” write the report authors. “Our challenge now is to extend that opportunity to more people and scale up proven initiatives…”

This report highlights two entrepreneurship training programs — Aspire to Entrepreneurship in Washington, D.C., and ASPIRE MO in Missouri — which help returning citizens overcome the natural hurdles new entrepreneurs and small business owners face.

The U.S. has the highest incarceration rate in the world, and those who have a history of involvement with the justice system face barriers to economic security and reintegration into their communities. Entrepreneurship can be a way out of this cycle, but local and federal support is vital for success. The report suggests four ways federal and local policymakers could work together:

  • Boosting public investment in returning citizens
  • Providing pre-release support
  • Strengthening the continuum of care; and
  • Engaging the public

Read and download the paper here:

The Progressive Policy Institute, in partnership with the Kauffman Foundation, has launched the Metro Federalism Caucus to advocate for a more direct and empowering relationship between national and local government leaders. The Caucus consists of former local officials who now serve in Congress, as well as accomplished mayors and former mayors from around the country, whose governing experience and insights can help U.S. policymakers reimagine the division of labor among national, state, and local governments. Its mission is to open a direct channel of communication that does not run through state governments, aimed at forging a stronger partnership between Washington and metro leaders. Organized and supported by PPI and Co-Chaired by Representative Marilyn Strickland (WA-10) and former Mayor of Kansas City Sly James, the Caucus will champion a new approach to federalism that channels resources and decision making directly to metro leaders. PPI calls this decentralizing dynamic “Metro Federalism.”

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.

For more than 30 years, Association for Enterprise Opportunity (AEO) and its over 2,700 member and partner organizations have helped millions of underserved entrepreneurs in starting, sustaining, and growing their businesses. Together, AEO is working to change the way that capital and services flow to underserved entrepreneurs so that they can create jobs and opportunities for all.

###

Media Contact: Tommy Kaelin; tkaelin@ppionline.org

From Prison to Business: Entrepreneurship as a Reentry Strategy

Posted on by The Progressive Policy Institute

This paper is a collaboration between the Progressive Policy Institute (PPI) and the Association for Enterprise Opportunity (AEO)

By Anh Nguyen, AEO; Sidney Gavel, AEO; and Manu Delgado-Medrano, AEO

Executive Summary

The United States has the highest incarceration rate in the world, and as many as a third of Americans have some type of criminal record. Upon reentry, individuals with a justice history, whom we refer to as returning citizens, face significant barriers to economic security and reintegration into their communities. Among the most formidable barriers to reentry are a disadvantaged living environment, low levels of education, mental health challenges, and stigma that excludes them from job opportunities and other resources.

All of these factors contribute to a high recidivism rate among returning citizens and make it harder for them to secure employment. An alternative yet underappreciated opportunity for returning citizens to circumvent these barriers is to work for themselves by launching their own businesses.

Entrepreneurship presents a promising pathway to economic security and reintegration into communities as it requires minimal formal schooling, provides additional income and control over their livelihoods, and has the potential to uplift the often-low-income communities to which these individuals return.

Additionally, a study in 2020 showed that entrepreneurship can reduce the likelihood of recidivism by 5.3%.3

While entrepreneurship has great potential to reduce recidivism and promote economic stability, returning citizens have to overcome several hurdles in their entrepreneurship endeavors, ranging from a lack of access to capital, collateral consequences of having a criminal record, a digital skills gap, and limited access to wraparound support services..

Read the Full Report.

 

PPI’s Trade Fact of the Week: The U.S. manufacturing trade deficit has nearly doubled since 2016

Posted on by The Progressive Policy Institute

FACT: The U.S. manufacturing trade deficit has nearly doubled since 2016.

THE NUMBERS: U.S. manufacturing trade deficits, nominal dollars –

2022          $1.20 trillion
2020         $0.90 trillion       
2016          $0.65 trillion
2000         $0.32 trillion

 

WHAT THEY MEAN:

How does the Trump-era agenda hold up six years later, when matched against its officials’ trade-balanced centered critiques of their predecessors and goals for their own program?

Each February, the U.S. Trade Representative Office puts out a report entitled “The President’s Trade Agenda,” which sets out Administration goals for the coming year. The 2017 edition cited a U.S. global trade balance statistic as proof that earlier administrations got things wrong:

“In 2000, the U.S. trade deficit in manufactured goods was $317 billion.  Last year [i.e. 2016] it was $648 billion – an increase of 100 percent.”

The next edition, in 2018, used “bilateral” trade balance with Mexico — i.e. country-to-country, subtracting the value of U.S. exports to Mexico from the value of imports from Mexico  — to claim failure for the North American Free Trade Agreement and set a goal for the renegotiated “USMCA”:

“[O]ur goods trade balance with Mexico, until 1994 characterized by reciprocal trade flows, almost immediately soured after NAFTA implementation, with a deficit of over $15 billion in 1995, and over $71 billion by 2017. … USTR has set as its primary objective for these renegotiations – to improve the U.S. trade balance and reduce the trade deficit with the NAFTA countries.”

How does this hold up six years later? Before turning to the bleakly comical answers, an econ. note and a couple of stat. correctives:

(1) Standard Econ 101 equations show that a country’s trade balance always matches the difference between its savings and its investment. Since the mid-1970s, Americans have been investing more than we save; ergo, trade deficits. The orthodox view is that while very high trade deficits can arouse alarm as indicators of unsustainable booms, the appropriate response is fiscal contraction and long-term measures to raise savings rates (and contrariwise, expansion and higher consumer purchasing in surplus countries).  One corollary of this is that trade policy measures like tariffs or FTAs won’t much affect overall balances, and shouldn’t really be judged on a balance basis.  A second is that a program like the Trump administration’s — business tax cuts which will (barring some offsetting rise in family or corporate savings) lower the national savings rate and possibly raise investment, plus higher government spending which will (barring some offsetting collapse of private-sector investment) raise national investment rates will naturally create a higher trade deficit. (Or lower surplus for countries in surplus.) The Trump administration’s evident hypothesis was that this basic equation is in error, and a combination of tariffs and negotiated purchasing commitments, rules of origin, efforts of will, and so forth, would force the plus and minus signs to change.

(2) Statistically, the best way to compare balances across time (and especially over decades) is to look at “trade balance relative to GDP,” rather than “nominal” dollar totals which don’t account for inflation or the scale of trade relative to the economy.  By this measure, the U.S. trade deficit has averaged 2.7% of GDP since 1982, with lows of 0.5% in 1991 and 1992 and highs of 5.7% in 2005 and 2006. The 2016 level was 2.7% of GDP, exactly the 40-year average and a bit below the 3.7% of GDP of 2000 and the 3.0% of GDP in 1987.

(3) Less consequentially, U.S. goods trade with Mexico might be termed “characterized by balanced trade” across the entire 1970-1990 stretch of time, but oscillated with growth trends and energy prices from a surplus (from a U.S. perspective) in the 1970s, to deficits from 1982 through 1990, and then briefly surplus during the Mexican boom/U.S. recession in 1991-1993.

These points duly noted, here are the 2022 figures analogous to those in the 2017 and 2018 President’s Trade Agenda reports:

Overall and manufacturing balances: The largest measurement of trade balance is the (exports of goods + services) – (imports of goods and services). At 2.7% of GDP ($480 billion) in 2016, this reached 3.0% of GDP ($845 billion) in 2021, and 3.8% of GDP ($948 billion) in 2022. The manufacturing deficit was $892 billion in 2020, $1.06 trillion in 2021, and $1.20 trillion in 2022. Thus it nearly doubled the $648 billion nominal-dollar figure cited as evidence of debacle in 2017.

Bilateral balances: The U.S.-Mexico goods trade balance with Mexico, two years into the USMCA, was -$120 billion in 2022, nearly double the 2017 figure used to illustrate the need to renegotiate the NAFTA. The balance with Canada, a $16 billion deficit in 2017, was $80 billion in deficit as of 2022.  USMCA may well have some advantages over the NAFTA — new digital material, labor, and environmental coverage, and so on – but with respect to balance the Trump negotiators look to have over-reached.  Even the China goods deficit, at $383 billion in 2022, was well above the pre-“301” tariff of $347 billion of 2017.

In sum, not quite what the policies’ authors predicted, and a bit of vindication for the economists who (a) thought use of trade balance as a success-meter was a mistake in general, and (b) based on policy and growth trends, predicted an outcome a lot like the one that actually happened.

* As above, this should be adjusted for inflation and so doesn’t quite double the 2016 figure.

 

 

FURTHER READING:

The Trump administration’s 2017 Executive Order on “Omnibus Report on Significant Trade Deficits” asked the U.S. Trade Representative Office and the Commerce Department to write up a report on trade balances with most major U.S. trading partners.  This was never released:

Data:

The Census Bureau’s U.S. monthly trade data

… and imports, exports, and bilateral balances for the U.S. with individual countries, back to the mid-1980s

… and for the big picture, U.S. worldwide annual exports, imports, and balances from 1960-2022 on one convenient page

As noted above, a better way to put trade flows and balances in context is relative to GDP. A quick run-down of imports, exports, and balances in 2016 and 2022, with 2000 and peak-deficit year 2006 added for context.

What Happened?

Why the upward turn since 2016?  Tax policy is the logical suspect.  Three of four big upward ratchets in U.S. trade deficits since the 1970s followed tax-cut bills: one in 1981, another in 2001, and the third in 2017. Bills of this sort typically bring somewhat higher government deficits (“dissavings”), which mean an overall drop in national savings unless offset by higher family or business saving. All else equal, by virtue of the “savings-investment = trade balance” identity, trade deficits rise.

The main balance effects of the Trump-era tariffs are likely (a) shifting some of the overall U.S. deficit from China to Vietnam, Mexico, and some other mid-income countries, and (b) also probably, though less certainly, concentrating the deficit more in manufacturing than had been the case before 2017.  Trump-era tariffs on steel, aluminum, and Chinese goods fall heavily on industrial inputs — metals, auto parts, electrical converters, etc. — and require U.S. manufacturers and farmers to absorb extra costs. The likely result is some marginal loss of competitiveness for exporters trying to sell to foreign buyers and for firms competing against imports at home, pushing a larger share of the overall U.S. deficit into manufacturing, reducing the erstwhile agricultural surplus, and accelerating the shift of energy from deficit to surplus.

The Two Reports

The 2017 President’s Trade Agenda.

… and the 2018 followup (with an extraordinary claim that the 2017 tax bill “has the potential to reduce the U.S. trade deficit by reducing artificial profit shifting”).

 

 

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 Progressive Economy 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

Popovian for National Review: Transparency Laws Are the First Step toward Creating a More Sustainable Health-Care System

Posted on by The Progressive Policy Institute

By Dr. Robert Popovian, Senior Health-Policy Fellow for PPI;
and Catherine Barr Windels

For decades, lobbyists for the pharmacy-benefit-management (PBM) industry have been telling policy-makers, employers, and patients that PBMs (middlemen responsible for the administration of the prescription-drug benefit for various health-plan payers) save everyone money. They argue that opaque negotiation, rebate contracting, and vertical and horizontal integration are intended to help lower biopharmaceutical spending. Unfortunately, the promises of savings are a mirage, with no data-driven analysis to back them up. The PBM industry is thus staunchly opposed to laws that provide transparency into their business practices.

Fortunately, states and federal legislators are finally taking action. They have decided to scrutinize the flow of untold billions of dollars in discounts, fees, concessions, and rebates that are siphoned off from the biopharmaceutical industry by the pharmacy-benefit managers. The estimated total collected by the middlemen is over $200 billion annually, which makes up almost 40 percent of drug spending in the U.S. Unfortunately, because of a lack of transparency, no one, including federal and state governments, has a clue as to how much of that money provided by the pharmaceutical industry is kept by PBMs. At best, there are estimates by various governmental agencies of the amount of savings that is passed back to those who are supposed to benefit from the work of PBMs: the employers, the state and federal governments, and most importantly, the patients. It is important to note that such estimates are primarily based on modeling data, testimony by PBM officials, or incomplete information.

Read the full piece in the National Review.