Economy Archives - Page 23 of 83 - Progressive Policy Institute

PPI Launches Series of New Ideas for a ‘Do-Something’ Congress

Posted on January 16, 2019 by The Progressive Policy Institute

Dear Democratic Class of 2018,

Congratulations on your election to the U.S. House of Representatives! In addition to winning your own race, you are part of something larger – the first wave of a progressive resurgence in U.S. politics.

The midterm elections gave U.S. voters their first opportunity to react to the way Donald Trump has conducted himself in America’s highest office. Their verdict was an emphatic thumbs down. That’s an encouraging sign that our democracy’s antibodies are working to suppress the populist virus of demagoguery and extremism.

Now that Democrats have reclaimed the people’s House, what should they do with it? Some are tempted to use it mainly as a platform for resisting Trump and airing “unapologetically progressive” ideas that have no chance of advancing before the 2020 elections. We here at the Progressive Policy Institute think that would be huge missed opportunity.

If the voters increasingly are disgusted with their dissembling and divisive president, they seem even more fed up with Washington’s tribalism and broken politics. For pragmatic progressives, the urgent matter at hand is not to impeach Trump or to embroil the House in multiple and endless investigations. It’s to show Democrats are determined to put the federal government back in the business of helping Americans solve their problems.

We think the House Democratic Class of 2018 should adopt this simple mantra: “Get things done.” Tackle the backlog of big national problems that Washington has ignored: exploding deficits and debt; run-down, second-rate infrastructure; soaring health and retirement costs; climate change and more. And yes, getting things done should include slamming the brakes on Trump’s reckless trade wars, blocking GOP efforts to strip Americans of health care, as well as repealing tax cuts for the wealthiest Americans.

PPI, a leading center for policy analysis and innovation, stands ready to help. We’re developing an extensive “Do Something” Agenda. Today, we are releasing the first in a series of concrete, actionable ideas designed expressly for Democrats who come to Washington to solve problems, not just to raise money and smite political enemies.

As you get settled into your new office, we’ll look for opportunities to acquaint you and your staff with these pragmatic, common-sense initiatives, and to discuss other ways we might be of service to you. That’s what we’re here for.

Regards,

Will Marshall
President
Progressive Policy Institute

New Ideas for a Do-Something Congress No. 1: “A Check on Trump’s Reckless Tariffs”

First and foremost, it’s time for Congress to start doing its job on trade. A key step is enacting the Trade Authority Protection (TAP) Act. This balanced legislation would rein in Trump’s abuse of delegated trade powers, require greater presidential accountability, and enable Congress to nullify irresponsible tariffs and trade restrictions.

A Radically Pragmatic Idea for the 116th Congress: Take “Yes” for an Answer on Net Neutrality

For the last two decades, different versions of net neutrality have bounced between Congress, the Federal Communications Commission, the courts – and most recently the states – but the issue remains unresolved.

It is time for Congress to solve this problem for good by enacting a strong, pro-consumer net neutrality law – an outcome that is politically possible even in this era of maximalist gridlock and deeply divided government, given the broad consensus that has formed around the vital issue of ensuring an open internet.

New Ideas for a Do-Something Congress No. 2: “Jumpstart a New Generation of Manufacturing Entrepreneurs”

The number of large U.S. manufacturing facilities has dropped by more than a third since 2000, devastating many communities where factories were the lifeblood of the local economy.

One promising way to revive America’s manufacturing might is not by going big but by going small – and going local. Digitally-assisted manufacturing technologies, such as 3D printing, have the potential to launch a new generation of manufacturing startups producing customized, locally-designed goods in a way overseas mega-factories can’t match. To jumpstart this revolution, we need to provide local manufacturing entrepreneurs with access to the latest technologies to test out their ideas. The Grassroots Manufacturing Act would create federally-supported centers offering budding entrepreneurs and small and medium-sized firms access to the latest 3D printing and robotics equipment.

New Ideas for a Do-Something Congress No. 3: “End The Federal Bias Against Career Education”

As many as 4.4 million U.S. jobs are going unfilled due to shortages of workers with the right skills. Many of these opportunities are in so-called “middle-skill” occupations, such as IT or advanced manufacturing, where workers need some sort of post-secondary credential but not a four-year degree.

Expanding access to high-quality career education and training is one way to help close this “skills gap.” Under current law, however, many students pursuing short-term career programs are ineligible for federal financial aid that could help them afford their education. Pell grants, for instance, are geared primarily toward traditional college, which means older and displaced workers – for whom college is neither practicable nor desirable – lose out. Broadening the scope of the Pell grant program to shorter-term, high-quality career education would help more Americans afford the chance to upgrade their skills and grow the number of highly trained workers U.S. businesses need.

New Ideas for a Do-Something Congress No. 4: “Expand Access to Telehealth Services in Medicare”

America’s massive health care industry faces three major challenges: how to cover everyone, reduce costs, and increase productivity. Telehealth – the use of technology to help treat patients remotely – may help address all three. Telehealth reduces the need for expensive real estate and enables providers to better leverage their current medical personnel to provide improved care to more people.

Despite its enormous potential, however, telehealth has hit legal snags over basic questions: who can practice it, what services can be delivered, and how it should be reimbursed. As is the case with any innovation, policymakers are looking to find the right balance between encouraging new technologies and protecting consumers – or, in this case, the health of patients.

Telehealth policy has come a long way in recent years, with major advances in the kinds of services that are delivered. Yet a simple change in Medicare policy could take the next step to increase access and encourage adoption of telehealth services. Currently, there are strict rules around where the patient and provider must be located at the time of service – these are known as “originating site” requirements – and patients are not allowed to be treated in their homes except in very special circumstances. To expand access to Telehealth, Congress could add the patient’s home as an originating site and allow Medicare beneficiaries in both urban and rural settings to access telehealth services in their homes.

New Ideas for a Do-Something Congress No. 5: Make Rural America’s “Higher Education Deserts” Bloom

As many as 41 million Americans live in “higher education deserts” – at least half an hour’s drive from the nearest college or university and with limited access to community college. Many of these deserts are in rural America, which is one reason so much of rural America is less prosperous than it deserves to be.

The lack of higher education access means fewer opportunities for going back to school or improving skills. A less educated workforce in turn means communities have a tougher time attracting businesses and creating new jobs. Congress should work to eradicate higher education deserts. In particular, it can encourage new models of higher education – such as “higher education centers” and virtual colleges – that can fill this gap and bring more opportunity to workers and their communities. Rural higher education innovation grants are one potential way to help states pilot new approaches.

New Ideas for a Do-Something Congress No. 6: Break America’s Regulatory Log-jam

Regulation plays a critical role in refereeing competition in a free market economy. But there’s a problem: Each year, Congress piles new rules upon old, creating a thick sludge of regulations – some obsolete, repetitive, and even contradictory – that weighs down citizens and businesses. In 2017, the Code of Federal Regulations swelled to a record 186,374 pages, up 19 percent from just a decade before. PPI proposes a Regulatory Improvement Commission (RIC), modeled on the highly successful Defense Base Realignment and Closure (BRAC) process for closing obsolete military installations. Like the BRAC process, the proposed RIC would examine old rules and present Congress with a package of recommendations for an up-or-down vote to eliminate or modify outdated rules.

New Ideas for a Do-Something Congress No. 7: Winning the Global Race on Electric Cars

Jumpstarting U.S. production and purchase of Electric Vehicles (EVs) would produce an unprecedented set of benefits, including cleaner air and a reduction in greenhouse gas emissions; a resurgence of the U.S. auto industry and American manufacturing; the creation of millions of new, good, middle class manufacturing jobs; lower consumer costs for owning and operating vehicles; and the elimination of U.S. dependence on foreign oil. U.S. automakers are already moving toward EVs, but the pace of this transition is lagging behind our foreign competitors. A dramatic expansion of tax credits for EV purchases could go a long way toward boosting the U.S. EV industry as part of a broader agenda to promote the evolution of the transportation industry away from carbon-intensive fuels.

New Ideas for a Do-Something Congress No. 8: Enable More Workers to Become Owners through Employee Stock Ownership

More American workers would benefit directly from economic growth if they had an ownership in the companies where they work. To help achieve this goal, Congress should encourage more companies to adopt employee stock ownership plans (ESOPs), which provide opportunities for workers to participate in a company’s profits and share in its growth. Firms with ESOPs enjoy higher productivity growth and stronger resilience during downturns, and employees enjoy a direct stake in that growth. ESOP firms also generate higher levels of retirement savings for workers, thereby addressing another crucial priority for American workers.

New Ideas for a Do-Something Congress No. 9: Reserve corporate tax cuts for the companies that deserve it

Americans are fed up seeing corporate profits soaring even as their paychecks inch upward by comparison. Companies need stronger incentives to share their prosperity with workers – something the 2017 GOP tax package should have included.

Though President Donald Trump promised higher wages as one result of his corporate tax cuts, the biggest winners were executives and shareholders, not workers. Nevertheless, a growing number of firms are doing right by their workers, taking the high road as “triple-bottom line” concerns committed to worker welfare, environmental stewardship and responsible corporate governance. Many of these are so-called “benefit corporations,” legally chartered to pursue goals beyond maximizing profits and often “certified” as living up to their multiple missions. Congress should encourage more companies to follow this example. One way is to offer tax breaks only for high-road companies with a proven track record of good corporate citizenship, including better wages and benefits for their workers.

Bledsoe for the New York Times, “Going Nowhere Fast on Climate, Year After Year”

Posted on January 2, 2019September 18, 2024 by The Progressive Policy Institute

Three decades after a top climate scientist warned Congress of the dangers of global warming, greenhouse gas emissions keep rising and so do global temperatures.

Thirty years ago, a NASA scientist, James Hansen, told lawmakers at a Senate hearing that “global warming is now large enough that we can ascribe with a high degree of confidence a cause-and-effect relationship with the greenhouse effect.” He added that there “is only 1 percent chance of accidental warming of this magnitude.”

By that, he meant that humans were responsible.

His testimony made headlines around the United States and the world. But in the time since, greenhouse gas emissions, the global temperature average and cost of climate-related heat, wildfires, droughts, flooding and hurricanes have continued to rise.

This fall, the United Nations Intergovernmental Panel on Climate Change released an alarming report warning that if emissions continue to rise at their present rate, the atmosphere will warm up by as much as 2.7 degrees Fahrenheit (1.5 degrees Celsius) above preindustrial levels by 2040, resulting in the flooding of coastlines, the killing of coral reefs worldwide, and more catastrophic droughts and wildfires.

To avoid this, greenhouse gas emissions would need to fall by nearly half from 2010 levels in the next 12 years and reach a net of zero by 2050. But in the United States, the world’s second-largest emitter of greenhouse gases, President Trump continues to question the science of climate change, and his administration is rolling back emissions limits on power plants and fuel economy standards on cars and light trucks, while pushing to accelerate the use of fossil fuels. Other major nations around the world aren’t cutting emissions quickly enough, either.

So what has happened over the last 30 years? Progress has been made in fits and starts, but not nearly enough has been done to confront the planet-altering magnitude of what we have unleashed. Here’s a look at some of what has occurred:

Continue reading at the New York Times.

Ending America’s Public Investment Drought

Posted on December 19, 2018 by The Progressive Policy Institute

INTRODUCTION

Economists from Adam Smith onward have understood that free markets don’t exist or thrive in a state of nature. They are nestled within a framework of governance that defends societies against outside threats, writes and enforces common laws, and provides public goods – those that all people need but that private actors would have little incentive or ability to develop on their own.

Unlike private investments, investments in public goods generate benefits that accrue not to individual investors but rather society as a whole. Thus, the responsibility for investing in public goods falls on government: the one institution that represents all citizens and therefore has an obligation to act in the common interest. Public investments such as education, infrastructure, and scientific research lay the foundation for long-term economic growth and shared prosperity. Only by making these investments can governments facilitate the success of private enterprise and free markets.

For over three decades following the end of World War II, policymakers in the United States dutifully fulfilled this obligation and invested in America’s future. The post-WWII G.I. Bill provided unprecedented access to higher education for returning veterans and their families regardless of their financial situation, giving them an opportunity to pursue a lucrative and fulfilling career while providing businesses access to a skilled workforce.3 The Interstate Highway System connected people from across the country to exchange goods and services – and still supports one quarter of all vehicle traffic over 60 years later.4,5 And the “Space Race” of the 1960s resulted in the development of new technologies from LEDs to water purifiers that continue to benefit our society today.

But in recent years, policymakers have defaulted on their fundamental responsibility to maintain sufficient public investment. Between 1965 and 1980, federal spending on education, infrastructure, and scientific research averaged about 2.5 percent of gross domestic product (the total value of all goods and services produced by the United States in a given year). Investment spending at that level would have been equal to roughly $470 billion in 2017. Yet in reality, the federal government spent just $300 billion on public investment in 2017 – less than 1.5 percent of GDP.7 If current trends continue, such investment is projected to reach its lowest level in modern history by 2026 (Fig. 1).8

If the current generation of policymakers fails to “pay it forward” by maintaining and building upon the investments made by their predecessors, young Americans and future generations will not have the kind of opportunities for economic and social advancement that their parents and grandparents enjoyed. Instead, they would face a future of diminished economic dynamism and growth, lower productivity and wages, and greater social inequality and class conflict. Simply put, the de-facto policy of disinvestment is a formula for national decline.

Rather than address this looming threat, current policymakers have been making America’s public investment drought worse. Donald Trump and the Republican-controlled Congress abandoned any pretense of fiscal responsibility and enacted a package of partisan tax cuts in 2017 that the official scorekeepers at the non-partisan Congressional Budget Office estimate will cost more than $2 trillion over the next decade.16 These policies provided tax relief to those who needed it least while draining much-needed revenue from public investments that could benefit everyone.

But the federal government’s fiscal challenges extend beyond insufficient revenue. America’s aging population and rising health care costs are causing spending on expensive federal health and retirement programs such as Medicare, Medicaid, and Social Security to grow significantly faster than the rest of our economy – a trend that members of both parties, but particularly Democrats, have largely refused to tackle. The result is that many people who consider themselves progressives have become complicit in a profoundly unprogressive policy of throttling public investment. These forces together are producing ballooning public debts while leaving less and less room in the federal budget for investments in a better future.

Meanwhile, state and local governments are also cutting back their public investment spending due to similar demographic and political challenges. The bills for unfunded pension liabilities are coming due as a massive number of public employees move into retirement. The cost of state commitments to health programs such as Medicaid are also swelling due to the same rising health care costs that pressure Medicare at the federal level. And while policymakers in some states are working to tackle these problems, others have made matters worse by enacting their own reckless tax cuts based on the same flawed ideology as Republicans in Washington. The result is cuts to public investment at all levels of government.

Fortunately, there are signs that the American people appreciate the stakes: large majorities of voters in both parties have expressed strong support for government spending on public investments in several independent polls.17,18,19 Additionally, a poll conducted by PPI on the eve of the 2018 midterm elections found that more respondents were worried about the growing federal budget deficit than any other issue polled – including almost 9 out of 10 independent voters.20

These findings suggest that Democrats serving in the 116th Congress (or running for higher office in 2020) have a unique opportunity to draw a stark contrast between themselves and fiscally irresponsible Republicans by offering the electorate an agenda that pairs robust public investment in progressive priorities with the fiscal discipline necessary to secure those investments for generations to come.

KEY TAKEAWAYS

The goal of this report is to highlight for American policymakers and their constituents the role that public investment plays in providing the foundation for a prosperous economy, as well as the steps that must be taken to end America’s current public investment drought.

The first three sections provide an overview and analysis of the three main categories of public investment in the United States: research and development (intellectual capital), infrastructure (physical capital), and education (human capital). Next, the report demonstrates how these public investments both create long-term economic growth and ensure its benefits are shared by all. Finally, the report explores the external forces that have resulted in recent cuts to public investment, with one section on the pressures facing the federal budget and another on the parallel challenges facing state and local governments.

In 2019, PPI’s Center for Funding America’s Future will offer concrete proposals for a fiscally responsible public investment agenda that fosters robust and inclusive economic growth.

We’re Falling Behind in Research and Development (PP. 8-13):

• Federal R&D spending has contributed to countless technological innovations that enrich our society. To take just one example, a study of NIH’s Human Genome Project estimated that the project generated nearly $1 trillion of economic growth – yielding a massive return of $178 for every dollar spent.

• Back in the 1960s, the federal government spent as much as 1 percent of GDP on nondefense R&D as it sought to win the space race and put a man on the moon. But today, this spending has fallen by more than half. That disinvestment threatens basic scientific research that lays the foundation for new industries and technological innovations.

• This year, for the first time in modern history, China – not the United States – will be the global leader in R&D spending. If policymakers don’t boost public investment in R&D, they risk forfeiting America’s position as the global leader in innovation.

Our Infrastructure is Obsolete and Falling Apart (PP. 13-16): • Common public goods such as roads, school buildings, electric grids, and water systems provide the physical foundation for private investment and enterprise. But in recent years, that foundation has been allowed to crumble as total government spending on infrastructure has fallen to record-low levels as a percent of GDP.

• Several independent estimates suggest the United States will need to spend roughly $1.4 trillion more on infrastructure than it is currently projected to spend over the next decade. Failure to reverse America’s disinvestment in infrastructure could reduce GDP by nearly $4 trillion over that time period, costing the average family about $3,400 per year.

• Investments in infrastructure also boost economic growth in the short term by creating well-paying jobs today. Roughly 1 in 10 workers are employed in either developing or maintaining infrastructure, and wages at the bottom of the earnings distribution are approximately 30 percent higher than what other jobs requiring a comparable level of education would offer.

Workers Need Skills for Next-Generation Jobs (PP. 16-21):

• Education is a valuable investment for both individuals and governments. Investing in a child’s pre-kindergarten education generates 7 to 10 percent annual returns for the child and society at-large, while the average annual return on investment for postsecondary education is double or triple what it would be if a similar amount of money was invested in the stock market. Disinvesting from education not only hurts students but also hurts the public by foregoing increased worker productivity and higher tax revenue for the government.

• Per-pupil funding for K-12 education has stagnated or fallen in most states since the 2008 financial crisis. This disinvestment will likely be costly: every dollar spent educating a child results in an average of $3 in economic activity down the road. It can also reduce the number of students who graduate, potentially imposing long-term costs on them and taxpayers. High-school dropouts are about twice as likely to be unemployed as graduates, and those who are employed earn an average of $8,000 less per year than graduates do.

• “New-collar” jobs that require some postsecondary education but not a four-year degree now account for 53 percent of jobs in the United States. A worker who obtains the necessary credentials can see their incomes rise by as much as $11,000 within the first two years alone. But only 43 percent of U.S. workers have the appropriate credentials for these positions, resulting is a “skills gap” that is in part due to underinvestment by the government.

Public Investment Fosters Robust and Inclusive Economic Growth (PP. 21-26):

• Sustained public investment can unleash robust economic growth. The OECD estimates that increasing public investment by 1 percent would increase potential GDP by an average of 5 percent in the long run.

• Public investment also ensures the benefits of economic growth are widely shared. Technological innovations such as the internet improve the lives of people of all income levels. Better transportation infrastructure is correlated with higher social mobility. And investments in public education level the playing field for lower-income students who have access to fewer resources than their wealthier peers.

• But the ability of a state or local community to make public investments is heavily dependent on its existing wealth and fiscal capacities. Poorer communities require federal investments to attract private capital and talented workers. Such investments are vital for promoting economic mobility and keeping the American Dream alive for all.

Poor Federal Budget Choices Are Draining Public Investment (PP. 26-28):

• Washington Republicans abandoned any pretense of fiscal responsibility by adding $2 trillion of reckless tax cut to the national debt over the past year. These cuts both starved public investments of much-needed revenue and likely contributed to the GOP losing control of the U.S. House of Representatives in the 2018 midterm elections.

• Public investment is also being squeezed by the inexorable growth of Medicare, Medicaid, and Social Security. Due to the aging of the population and rising health care costs, ENDING AMERICA’S PUBLIC INVESTMENT DROUGHT P7 spending on these programs are projected to grow from about 10 percent of GDP today to nearly 16 percent of GDP in 2048. The refusal of both parties to modernize these programs has left fewer resources available for federal public investment.

• As a result of these decisions, public investment spending by the federal government in GDP-adjusted dollars has plummeted by nearly 40 percent since 1968 – and is projected to hit record-low levels by 2026 if current policies remain in place. Meanwhile, the share of federal spending committed to public investment will fall from 7.9 percent today to 4.4 percent in 2048.

State and Local Governments Face Challenges Similar to Those Facing Washington (PP. 28-33):

• State and local governments are also major contributors to public investment, but they are suffering from problems similar to those that afflict Washington.

• Republican governors and legislators in states such as Kansas and Oklahoma enacted unaffordable tax cuts that resulted in dramatic cuts to public investment. These tax cuts proved to be both bad policy and bad politics: Democrats won huge victories in both states in the 2018 midterm elections (despite their strong Republican lean) by campaigning for fairer and more responsible tax policies.

• State and local budgets are also strained by demographic changes. As a share of GDP, state spending on Medicaid has increased nearly 40 percent since 2000 due to rising health costs, while the costs of unfunded pension liabilities have doubled during the same period as the bill for retiring baby boomers comes due. The result: a perfect storm of fiscal mismanagement has drained public investment spending at all levels of government.

Mandel for NJ Spotlight, “It Would Be A Mistake to Make Brick-and-Mortar Retailers in NJ Accept Cash”

Posted on December 19, 2018 by The Progressive Policy Institute

It would be better to go cashless, while creating new low-cost banking options for poor residents

Is cash a bane or a boon?

The underlying trends are clear. Across the country, from high-end salad chain Sweetgreen to the new Amazon Go stores, more and more retailers are going cashless as technology improves. For a company like Amazon, doing without cash means speeding or eliminating the checkout process, including getting rid of long lines at peak times. For small retailers, the advantages are fewer losses from cash theft and much simplified operations, especially in high-crime areas.

In response, New Jersey is considering new legislation that would require all brick-and-mortar stores to accept cash. Similar bills have been introduced in Chicago, Washington, D.C. and Philadelphia. Supporters say that such legislation is important to protect poor Americans who don’t have access to credit cards or bank accounts.

This move to lock in the status quo is a mistake. The shift to cashless stores is a positive for poor Americans and small retailers, if combined with a concerted effort to bring low-cost banking to poor Americans. Moreover, regulations requiring cash are likely to reduce the competitiveness of brick-and-mortar stores against e-commerce.

Continue reading at NJ Spotlight.

Can digitizing the food manufacturing industry boost living standards?

Posted on December 17, 2018September 18, 2024 by The Progressive Policy Institute

A version of this post originally appeared on Forbes.com

Can digitizing the food manufacturing industry help boost living standards? The short answer is yes, if we link food manufacturing into the Internet of Goods.

We’re used to thinking of food as cheap and getting cheaper. In 1947, spending on food—both in and out of the home—accounted for 27% of non-health personal spending. By 2000, the food budget share, omitting healthcare, had dropped to 14%.

This 50-year decline in the food budget share fueled American prosperity. With much less of their budgets going to food, middle-class households could afford to spend more on housing, cars, vacations, and all the other aspects of a good life.

But as Figure 1 shows, around 2000, something changed. The decline in the food budget share stopped. Indeed, household spending on food has inched up to close to 15% of non-health personal spending by 2017.

To put it another way, if the past trends had continued, the food share of non-health spending would be only 10%. Americans would have almost $500 billion more to spend in other areas.

What happened to the food industry? Groups such as the American Antitrust Institute point to consolidation in industries such as meat processing, which potentially has increased the market power of major players and their ability to raise prices.

Another factor boosting food costs may be greater attention to safety. In particular the Food Safety Modernization Act (FSMA) was signed into law by President Barack Obama on January 4, 2011. This legislation gives the FDA a new mandate to regulate food production and processing. Indeed, the necessary rules are still being implemented–for example, the FDA is currently asking for comments on a proposed guidance for “Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption.” Obviously an important step given the current lettuce issue!

But perhaps most important, the food manufacturing industry has been in a deep and profound productivity slump in recent years. Measured by the Bureau of Labor Statistics (BLS), output per hour in food manufacturing has dropped by 8% since its peak in 2005 (Figure 2).

In response, the food manufacturing industry has been embracing digitization, but it’s a slow process. According to data from the BLS, the entire food manufacturing industry employed less than 1000 software developers and programmers as of May 2017, compared to 25,000 engineers and scientists.

Digitization will have a significant impact in several different areas of food manufacturing. First, it will become much easier to consistently track food from “farm to fork.” As a result, food recalls will become easier and cheaper. (According to one count, there were 456 food recalls in 2017).

Second, digitization of the production process will help boost productivity and lower costs. This includes product development. For example, FlavorWiki is a startup that uses data analytics to quantify consumer taste perceptions, and potentially help companies develop new products.

Finally, and perhaps the most important, digitization allows the development of local production models for food, requiring food to be shipped much shorter distances. In Japan, for example, the world’s largest automated leaf-vegetable factory has just opened in a suburb of Kyoto. In the U.S., companies such as Iron Ox are developed autonomous and hydroponic production models.

Such vertical farms might be tied directly into ecommerce networks to handle local delivery direct to consumers, thus cutting out several layers of the distribution chain. The result would be lower prices, higher quality, and less pollution from shipping, These are some of the benefits of the Internet of Goods.

Indeed, digitization will enable the rethinking of the entire food production, manufacturing, and distribution chain, to the benefits of consumers. With any luck, Americans will once again find their food budget shares falling and their standard of living rising.

PPI Survey: Voters Back National Privacy Law

Posted on December 13, 2018September 18, 2024 by The Progressive Policy Institute

Chinese hackers stealing technology from U.S. companies, Russian trolls interfering in our elections, U.S. tech leaders hauled before Congress to explain some new data breach or misuse of personal information – hardly a week goes by without Americans being bombarded with new revelations about assaults on our privacy.

The problem will only get worse as America’s physical industries – autos, construction and manufacturing of all kinds – go online. That will trigger explosive growth in the volume of personal information companies collect – and try to sell.

And while the United States leads the world when it comes to digital technology and data-driven commerce, we lag in updating our cybersecurity and privacy laws. Unlike Europe, which is implementing its General Data Protection Regulation (GDPR), Washington has no national standard for privacy.

States are moving to fill this policy vacuum. Following Nebraska and Alabama, California recently passed a law giving consumers the rights to know what information a business has collected about them, to “opt out” of a business selling their data, and to have their data deleted. That’s understandable, given growing public demands for data security, but a state-by-state approach to privacy makes little sense.

It would balkanize the seamless digital marketplace that has been key to America’s high-tech leadership, forcing consumers and businesses to run a bewildering gauntlet of varying standards, rules and enforcement regimes. Instead, we need a national privacy law that’s simple but strong, with one common standard and one set of rules that every company must follow and every consumer can understand.

U.S. voters need little convincing. A recent Expedition Strategies poll for PPI found that voters are very concerned about abuses of their personal information. 60 percent said they are worried about tech companies’ handling of privacy and data protection. It’s no wonder a solid majority (58 percent) backs national legislation enshrining consumers’ private rights, as shown in Figure 1.

PPI believes the new Democratic House majority should make a national privacy law a top priority for the next Congress convening in January. Since California’s new rules take effect in 2020, Congress should pass a national law by the end of the year.

Can a Democratic House and Republican Senate find common ground next year on a national privacy bill? The good news is that privacy is not intrinsically a partisan issue. It could provide an early test of Republicans’ willingness to work with Democrats to break the spell of tribal partisan warfare that hangs over Washington, and get our national government back in the business of solving national problems.

Poll Shows Americans View Tech Companies Favorably, Oppose Breaking Them Up

Posted on December 10, 2018September 18, 2024 by The Progressive Policy Institute

Our economy almost certainly has a problem with rising market power. A slew of studies shows that concentration in many sectors of the economy has increased over the past 20 to 30 years. A new PPI study, however, shows that critics of the supposedly overweening power of U.S. tech companies are barking up the wrong tree.

The study, by PPI Chief Economic Strategist Michael Mandel, finds that the digital sector – encompassing tech, telecoms and ecommerce – significantly outperforms the rest of the non-health private sector on every important economic measure, benefitting both workers and consumers. For example, productivity in the digital sector rose by almost 60 percent between 2007 and 2017, prices fell by 15 percent, real annual pay per worker rose by 15.4 percent, and employment grew by 14 percent. Such dynamism is hardly consistent with the critics’ portrait of tech giants throttling competition, suppressing innovation and using their market power to impose higher prices on consumers.

Meanwhile, in the rest of the non-health private sector, productivity grew only 5 percent, prices increased by 21 percent, real annual pay increased by 7 percent, and employment grew by 3.3 percent. If you are looking for evidence that market concentration is weakening our economy and making inequality worse, here’s where you should start.

And for all the glib journalistic talk of “techlash,” Americans don’t see Big Tech companies in a particularly sinister light. In fact, a recent PPI poll found that most voters view the tech giants as testaments to American ingenuity and oppose breaking them up.

The poll, conducted by Expedition Strategies survey on the eve of the midterm election, found that 67 percent of likely voters view the tech companies positively, as shown in Figure 1, and 55 percent oppose breaking them up. While 60 percent of voters acknowledge they are concerned about tech companies’ handling of privacy and data protection, 71 percent of voters view tech companies as “a sign that the American economy is working.” In contrast, just 32 percent view Big Tech as “too powerful.”

That being said, voters do worry about privacy and data protection – in fact, 60 percent of voters say that the industry that concerns them most when it comes to these issues is Big Tech. Voters by a margin of 58 percent to 42 percent also say they’d like to see a national legislative response to privacy regulation rather than a piecemeal state-by-state approach.

Figure 1. Please rate how you feel about the following industries:

Given the general trends toward consolidation, a comprehensive look at market power, competition and innovation across the U.S. economy is certainly in order. But rather than succumb to the reductive nostrum that “big is bad,” progressives ought to engage in a careful, sector-by-sector analysis before they start calling for break-ups and more regulation. As Mandel shows, the evidence suggests that the digital sector does not pose a special problem, and in fact is outperforming the rest of the private sector.

Progressives ought to be vigilant about market power and monopoly, but it makes little sense to draw targets on our most successful companies.

Ritz for Forbes, “Trump Once Again Shows Contempt For Young Americans”

Posted on December 6, 2018 by The Progressive Policy Institute

A new report published by the Daily Beast earlier this week revealed how little President Trump cares about America’s future. When senior administration officials warned Trump about the nation’s growing and unsustainable national debt, the president reportedly expressed little interest in tackling the issue because it wouldn’t create a full-blown crisis until after he is gone from office.

Granted, anyone who paid attention to the first two years of the Trump administration could tell that it doesn’t prioritize fiscal responsibility. Trump’s signature achievement thus far is package of partisan tax cuts that the Congressional Budget Office estimates will add more than $2 trillion to the national debt over the next decade. And its 2018 budget proposal showed that enacting all the administration’s preferred policies would leave the debt significantly larger than it would have been if President Obama’s final budget had been enacted.

Continue reading at Forbes.

Yarrow for RealClearPolicy, “Welcome to Post-Thrift America”

Posted on December 4, 2018 by The Progressive Policy Institute

How did we arrive at a new normal of indifference to living on borrowed money? Federal budget deficits are poised to eclipse $1 trillion in 2020 and may never fall below that level again. There was hardly a word about this once-hot issue among Democrats or Republicans running in the midterm elections. Similar problems of matching spending with revenues exist at the state level, where unfunded pension liabilities grow while taxes are cut.

At the individual household level, following an uptick in savings after the Great Recession, most Americans can’t or don’t care about saving or balancing spending and income. About 80 percent of the population carries debt, totaling about $13 trillion, and one in five households have zero or negative assets.

The transition to this new normal has been as much a cultural story as a political or economic one. Whether one speaks of “thrift,” “living within one’s means,” or “pay as you go,” these were long the dominant values and standard practices of both governments and families. Throughout U.S. history, Americans and their government generally spent no more than their income or revenues and, ideally, would save some money. Of course, there were exceptions — such as wars and emergencies, and for individuals, poverty and other hardships — that necessitated borrowing. Economically, saving and investment were underpinnings of successful capitalism, and, morally, profligacy was a sin. Those who spent extravagantly were shady characters, while responsible budgeting was a sign of moral rectitude.

Continue Reading at RealClearPolicy.

The Price of Food vs the Price of Internet Access

Posted on December 3, 2018September 18, 2024 by The Progressive Policy Institute

Here’s what you need to know. Between 2000 and 2017, the price of food went up by 41%, according to the BEA. The price of Internet access fell by 21%. Which change is more harmful to consumers?

Oh, yes, and food at home accounts for 6% of household spending, while Internet access accounts for 0.6%.

It’s worth noting that while the tech/telecom/ecommerce sector has been cutting prices since 2000, a wide variety of sectors have boosted prices sharply. Since 2000, the price of private sector higher education has gone up by 148%; the price of consumer financial services has gone up by 69%; the price of motor vehicle insurance has gone up by 67%; housing rents have gone up by 65%; the price of eating out has gone up by 60%; and so forth.

https://www.progressivepolicy.org/publications/competition-and-concentration-how-the-tech-telecom-ecommerce-sector-is-outperforming-the-rest-of-the-private-sector/

https://www.forbes.com/sites/michaelmandel1/2018/11/29/why-digitizing-food-manufacturing-can-boost-living-standards/

Competition and Concentration: How the Tech/Telecom/Ecommerce Sector is Outperforming the Rest of the Private Sector

Posted on November 29, 2018 by The Progressive Policy Institute

The U.S. economy almost certainly has a problem with rising market power. A bevy of recent economic studies show that concentration in many sectors of the economy has increased over the past 20-30 years. These increases in concentration have been convincingly linked to such economic ills as rising prices, weak productivity growth, stagnant real wages, slower job growth, weak investment, and falling labor share.

Indeed, there is little doubt that strong and consistent competition policy plays an important role in a market economy. Longstanding incumbents in a wide range of industries can exercise market power to choke off innovation and growth, protecting the status quo and driving up prices rather than benefiting workers and consumers.

New Jersey Democrats Propose Legislation to Strengthen Small Business Borrower Safeguards

Posted on November 28, 2018September 18, 2024 by The Progressive Policy Institute

Online finance providers have supplied an innovative source of capital for small businesses after a credit gap opened up in the wake of the Great Recession. However, while disclosures such as annual percentage rate (APR) are required by federal law for consumer loans, they are not for small business loans and credit products. The result has been costly for small business owners, with some providers charging exorbitant but undisclosed rates. Research by Opportunity Fund found the average monthly payment for some small businesses was about double what they could afford to pay.

New Jersey has an opportunity to be a leader in extending commonsense consumer protections to the small business credit market. Proposed legislation currently being debated calls for standardized terms such as APR, the payment schedule, and the minimum payment to be applied to small business loans or credit products up to $100,000.

Access to financing is often one of the biggest hurdles small business owners face, particularly for the smaller loan amounts many new or very small businesses seek: 86 percent of minority-owned businesses and 88 percent of woman-owned business bring in less than $100,000 per year.[i] Supporting the financial health of these businesses is often critical to supporting the financial health of the communities they serve as well.

That’s why the Progressive Policy Institute (PPI) commends State Senator Troy Singleton and Representative Clinton Calabrese for introducing this important legislation requiring greater transparency in the small business lending market. California was recently the first state in the nation to enact a similar law. The New Jersey bill closely tracks a proposal detailed in a recent PPI policy report, “Shining a Light on Small Business Credit: Promoting a Transparent Marketplace” by Jessica Milano, the former Deputy Assistant Secretary for Small Business, Community Development, and Housing Policy at the Treasury Department under the Obama Administration.

Milano calls for legislation to extend the Truth in Lending Act disclosure requirements to small business loans or credit products under $100,000. While no one likes reading fine print and filling out loan documentation, a recent poll by Small Business Majority found that 74 percent of small business owners support regulating online lending to ensure small businesses are protected from predatory practices. Simple disclosures including a few key metrics—especially APR—would allow a small business owner to “comparison shop” and easily analyze loan prices and terms across multiple credit providers, whether they are a bank, a payment processor, or an online lender.

According to the research by Opportunity Fund, some online lenders charge businesses average APRs of 94 percent, without ever disclosing those rates to the borrower. These companies argue that disclosing APR will discourage customers from taking their loans, causing the small business credit gap to widen further. That’s like arguing that if your doctor told you smoking was dangerous you might not do it, which in turn would hurt tobacco companies, so better not to know. If your doctor kept information that was vital to your health from you, he could be accused of malpractice, so why doesn’t the same principle apply to financial health as well?

As Singleton and Calabrese recognize, disclosing APR at the time of offering and acceptance of a loan would equip small business owners with a transparent metric to make an apples-to-apples comparison between products and choose the best option for them.

[i] Kate Bahn, Regina Willensky Benjamin, and Annie McGrew, “A Progressive Agenda for Inclusive and Diverse Entrepreneurship,” Center for American Progress, October 2016. https://cdn.americanprogress.org/wp-content/uploads/2016/10/13000159/ProgressiveAgenda.pdf

Serving up better wages for restaurant workers: Why eliminating the tipped wage is no panacea

Posted on November 28, 2018 by The Progressive Policy Institute

Restaurant workers are reputed to be among the lowest-paid workers in the country. One reason restaurant workers, and servers in particular, are perceived to be so poorly paid is the fact that tips often make up a good chunk of their pay, while the hourly wage they receive from their employers is lower than the prevailing minimum wage.

America’s Resilient Center and the Road to 2020 – Results from a New National Survey

Posted on November 14, 2018 by The Progressive Policy Institute

The Progressive Policy Institute (PPI) today released a national opinion survey that highlights the surprising resilience of America’s pragmatic political center two years into Donald Trump’s deeply polarizing presidency. The poll reinforces a key takeaway from the 2018 midterm elections: Suburban voters – especially women – are repelled by the president’s racial and cultural demagoguery and are moving away from a Trump-dominated GOP.

“Our poll suggests that Donald Trump’s election in 2016 is more likely to be an aberration than any permanent shift in America’s political course,” said Anne Kim, PPI Director of Social and Domestic Policy and PPI President Will Marshall. “The defection of suburban voters creates a political landscape that favors Democrats in 2020 – if they stick to the ‘big tent’ approach that proved so effective in the midterm.”

The poll conducted by Pete Brodnitz at Expedition Strategies contains findings about what’s top of mind for voters, their ideological outlook and leanings, and their views on health care, trade, growth and inequality, the role of government, monopoly and competition, and other contentious issues.

“The agenda that could help Democrats sustain a governing majority, our poll suggests, is one that is progressive yet pragmatic—one that’s optimistic, aspirational and respects Americans’ beliefs in individual initiative and self-determination; one that broadens Americans’ opportunities for success in the private sector and strengthens the nation’s global economic role; one that demands more from business but doesn’t cross the line into stifling growth; and one that adopts a practical approach to big challenges such as immigration reform and climate change,” write Kim and Marshall.

“For Democrats to maintain and expand this near-majority advantage, they must craft a broadly appealing agenda that brings or keeps independents and less committed partisans—the majority of whom call themselves ‘moderate’—under the tent.”

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