issue: Politics

Press Release: PPI Unveils New Blueprint for Shared Prosperity

Posted on by The Progressive Policy Institute

FOR IMMEDIATE RELEASE
March 15, 2016

Contact: Cody Tucker, 202-775-0106
or ctucker@ppionline.org

A Progressive Alternative to Populism

PPI Unveils New Blueprint for Shared Prosperity

WASHINGTON—The Progressive Policy Institute (PPI) today released Unleashing Innovation and Growth: A Progressive Alternative to Populism, a new blueprint for renewing America’s economic dynamism.

The plan offers an array of creative proposals for accelerating the “digitization” of the physical economy; lowering regulatory obstacles to innovation and entrepreneurship; launching a new public works push; adopting pro-growth tax reform; grooming the world’s most talented workers; and enabling working families to escape poverty and build middle class wealth.

The blueprint also takes aim at the populist anger that has figured prominently in campaign 2016:

…[P]opulists do Americans no favors by claiming the economic game is hopelessly rigged against them, that the leaders they elect are incompetents, or that our democracy is rancid with corruption. None of these claims is true, and such demagoguery undermines public confidence in America’s boundless capacity for self-renewal. Populist anger fosters an ‘us versus them’ mentality that, by reinforcing political tribalism and social mistrust, can only make it harder to build consensus around economic initiatives that benefit all Americans.

“We believe progressives owe U.S. voters a hope-inspiring alternative to populist outrage and the false remedies of nativism, protectionism and democratic socialism,” writes Will Marshall, PPI President.

“I encourage anyone looking for optimistic ideas to create more jobs, wealth, and prosperity for hard working Americans to read PPI’s new report using innovation to spur growth,” said Congressman Ron Kind (D-Wis.), Chairman of the New Democrat Coalition. “This report is full of forward thinking policy initiatives that help grow the American economy.”

“In the midst of today’s populist uprising, it’s up to our leaders to recognize the real reasons why our economy isn’t working for everyone and to fight for effective solutions,” said Governor Jack Markell (D-Del.). “PPI’s blueprint gives policymakers a roadmap to create opportunity for all Americans by harnessing the unstoppable forces of globalization and technological innovation, while opposing the impractical, and sometimes dangerous, proposals offered by the political extremes.”

The anger on which populists feed is rooted in a real economic problem: America has been stuck in a slow growth trap since 2000. This long spell of economic stagnation has held down wages and living standards and shrunk the middle class. What the nation needs is a forward-looking plan for moving the U.S. economy into high gear. Instead, as the PPI blueprint notes, today’s populists peddle nostalgia for our country’s past industrial glory but offer few practical ideas for building new American prosperity in today’s global knowledge economy.

Unleashing Innovation and Growth seeks to fill this vacuum in the presidential campaign, offering bold ideas for unleashing the collective ingenuity of the American people—harnessing disruptive change, raising skills, lowering tax and regulatory barriers to individual initiative and creativity, and experimenting with innovative ways to rebuild middle class wealth and enable more Americans to exit poverty.

Summary of Key Proposals

Unleash Innovation
• Spread innovation across the economy: Adopt a new “Innovation Platform” aimed at stimulating public and private investment in new ideas and enterprises, and at diffusing innovation across the entire economy.
• Improve the regulatory climate for innovation: Tackle the mounting costs of regulatory accumulation, the constant layering of new rules atop old ones; Make systemic changes to regulatory agencies to make promoting investment, innovation and new enterprises part of their core mission; Rein in occupational licensing requirements that screen out many low-income entrepreneurs; Lift outdated restrictions on lending to small business; give businesses incentives to offer more flexible work, including paid leave.
• Innovate our way to clean growth: Implement a more innovative energy strategy that simultaneously advances two vital interests: powering economic growth and assuring a healthy environment; Recognize that, for the foreseeable future, the U.S. and the world will have to tap all fuels—renewable, nuclear, and fossil—to meet growing energy demand and sustain global economic growth; Institute a nationwide carbon tax to curb greenhouse emissions while driving investment to clean and efficient energy.
• Democratize trade: Sell more of America’s highly competitive exports to a growing global middle class; promote the free flow of data across global borders; support innovative trade agreements, like the Trans-Pacific Partnership (TPP), that lift labor, environment and human rights standards in developing countries and enable more Americans to benefit from trade; Seize new opportunities for U.S. small businesses and entrepreneurs to use low-cost digital platforms to tap into global growth.

Align Fiscal Policy with Innovation and Growth
• Embrace pro-growth tax reform: Advocate for a dramatic shift from income to consumption taxes to stimulate investment in productive economic activities rather than those favored by the current tax code; Close loopholes that benefit special interests and dramatically simplify taxes for most Americans; Raise enough money to cut corporate income taxes down to globally competitive levels, and reduce taxes that penalize innovation and hiring.
• Modernize public works: Accurately measure the true economic impact of infrastructure spending; open infrastructure markets to private capital; define a strategic role for Washington through a national infrastructure bank; impose firm deadlines on project approvals and licensing process.

Groom the World’s Most Talented Workers
• Reinvent public school: Champion new models of school governance that enable more school autonomy and innovation, more customized learning, rigorous standards, and genuine accountability and results.
• Create new pathways into middle class jobs: Create a more promising approach to “career pathways” by combining classroom training and work experience through a sequence of jobs, within or across firms in an industry, and a sequence of credentials that signal their growing skill levels.
• Cut college costs for everyone: Rein in costs and decrease debt by encouraging colleges to offer three-year degrees rather than the traditional four-year program and focus policies on competency, rather than credit hours.

Build Middle Class Wealth
• Narrow the wealth gap with universal pensions: Champion “universal pension” accounts that would enable all workers to save for retirement, navigate the maze of tax-favored retirement plans, and take their pensions with them when changing jobs.
• Help families save for homeownership: Tackle the twin problems of declining homeownership and souring housing costs for both owners and renters by creating a new, tax-preferred mechanism for down payment savings—“Home K”—to lower obstacles to homeownership, like tight credit and down payment requirements, for first-time homebuyers and to promote savings.

Fight Poverty with Empowerment
• Empower people with smart phones: Use modern technology to cut through bureaucratic barriers to government safety net programs, consolidate benefit streams, enable people living in poverty more access to the information they need, and apply online for social supports; Encourage federal, state, and local governments to create online H.O.P.E. (Health, Opportunity, and Personal Empowerment) accounts and action plans.
• Expand housing choices for low-income Americans: Convert some federal rent subsidies into incentives for homeownership to relieve the burden on low-income families of high housing costs and reduce the waiting list for subsidized housing, without raising taxes or adding to the federal deficit.

Download Unleashing Innovation and Growth: A Progressive Alternative to Populism.

Unleashing Innovation and Growth: A Progressive Alternative to Populism

Posted on by The Progressive Policy Institute

As Americans choose a new president in 2016, populist anger dominates the campaign. To hear Donald Trump or Senator Bernie Sanders tell it, America is either a global doormat or a sham democracy controlled by the “one percent.” These dark narratives are caricatures, but they do stem from a real dilemma: America is stuck in a slow- growth trap that holds down wages and living standards. How to break this long spell of economic stagnation is the central question in this election.

Today’s populists peddle nostalgia for our country’s past industrial glory but offer few practical ideas for building a new American prosperity in today’s global knowledge economy. Progressives owe U.S. voters a hopeful alternative to populist outrage and the false panaceas of nativism, protectionism, and democratic socialism. What America needs is a forward-looking plan to unleash innovation, stimulate productive investment, groom the world’s most talented workers, and put our economy back on a high-growth path. It’s time to banish fear and pessimism and trust instead in the liberal and individualist values and enterprising culture that have always made America great.

Download Unleashing Innovation and Growth: A Progressive Alternative to Populism

Washington Post: The new Democratic Party proposal to rival Bernie Sanders’ socialism

Posted on by The Progressive Policy Institute

Simplicity is one of Bernie Sanders’ great strengths: Corporations and the rich have rigged the economy. His solutions sound simple, even when the plans behind them are complicated: college for all, health care for all, tax the rich, break up big banks. He trails Hillary Clinton in presidential delegates to this point, and he remains an underdog for the Democratic nomination, but Sanders has already pulled Clinton, and the party, toward a more populist, more socialist policy agenda, thanks in part to that clarity of message.

The centrist Democrats who oppose that leftward lurch have struggled to match his simplicity. They tend to view the economy through a lens of skills and adaptation, not power and treachery. Many of them pushed in the 1990s, under President Bill Clinton, to expand global trade and deregulate the financial sector. They now concede those efforts did not go according to script, particularly for middle-class workers, but they are not calling for a full rewrite in response.

Their risk, in this election and moving forward, is to define themselves solely as anti-Democratic-socialist – the folks who don’t like the stuff that a lot of Democrats like about Sanders.

The Progressive Policy Institute is the latest centrist Democratic institution to try to counter that image. Today it will release what its president, Will Marshall, calls a “radical” agenda to get America working for the working class again. The report is called “Unleashing Innovation and Growth: a Progressive Alternative to Populism,” and it is organized around a straightforward, if not perfectly simple, principle.

Read more at The Washington Post

Memo to the Presidential Candidates: To Reduce Inequality, Reinvent Public Schools

Posted on by The Progressive Policy Institute

Growing inequality has emerged as a central issue in the 2016 presidential election. Yet none of you has paid much attention to a major source of economic inequality in America: the uneven quality of our public schools.

As far as we can determine, GOP frontrunner Donald Trump has no thoughts on how to improve K-12 education. With the exception of Jeb Bush, now out of the race, and Gov. John Kasich, the Republican candidates have said little about education on the stump, beyond ritual denunciations of the Common Core standards.

On the Democratic side, both candidates want to make public colleges more affordable, Sen. Bernie Sanders by eliminating tuition, Hillary Clinton by spending $350 billion for financial aid. Both also want to invest heavily in early childhood education. But Sanders’s web page lists 21 priorities, and K-12 education reform is not among them. Clinton includes it but offers only platitudes, such as “Make high-quality education available to every child—in every ZIP code—in America,”and “Ensure that teachers receive the training, mentorship, and support they need to succeed and thrive in the classroom.”

Given the glaring inequities in our public schools, we are mystified by the absence of K-12 reform from your campaigns. Frankly, this appears to reflect what is worst about each party. Republicans, in blind obedience to the ideology of local control, seem more upset by the prospect of “federal meddling” in public schools than by their endemic failure to give low-income students a quality education. Democrats tolerate failure for another reason, namely fear of alienating teachers’ unions. None of you, it seems, is prepared to stand up for poor children trapped in poor public schools.

Download “2016.03.09 Osborne_Marshall-Memo-to-Presidential-Candidates_Education-Policy”

The Hill: Which past presidential election offers this year’s closest parallel?

Posted on by The Progressive Policy Institute

Every four years since 2000, during the fall semester, I’ve taught a college course on that year’s unfolding presidential election. In the past, it’s been fairly easy to point to a prior election year that offers illuminating historical parallels. But this time, I’m finding that the problem is not in identifying a parallel year; it’s that the best comparison election keeps changing. Below are the main contenders.

The 2000 election: Last summer, it looked like 2000 would offer an almost perfect analogy. That year, Vice President Al Gore represented continuity with the incumbent administration and faced mostly token opposition in the Democratic primaries from a respected liberal sitting senator, Bill Bradley (N.J.). The Republican side was more heavily contested, but it seemed most likely that a son of former President George H.W. Bush would prevail.

However, this relatively placid 2000 parallel has long since fallen apart: Sen. Bernie Sanders (I-Vt.) is proving much more formidable than Bradley, former Florida Gov. Jeb Bush is already out of the running for the Republican nomination, and many other factors have come into play.

Continue reading at The Hill.

Democracy: A New Kind of Public Works

Posted on by The Progressive Policy Institute

Barack Obama is thinking big as his presidency enters the final stretch. The centerpiece of his last budget, unveiled this week, is a $300 billion plan for a “clean transportation system”—the biggest federal infrastructure push since President Eisenhower launched the interstate highway system. Here at last is a fix that’s equal to the magnitude of America’s immobility crisis. In polarized Washington, however, it’s going nowhere.

Obama’s proposal would effectively double U.S. transportation spending, paying for it with a $10-per-barrel oil tax. There’s no way a Republican-dominated Congress will vote for a new energy tax, even with oil prices down to around $30 a barrel. House Speaker Paul Ryan already has dismissed the plan as “an election-year distraction.” Nor can the White House expect many Democratic candidates to rally around what is essentially a middle-class tax hike.

Obama, the arch realist, knows all this. But he seems determined to ensure that two issues on which he’s made frustratingly little headway—clean energy and infrastructure investment—stay high on the nation’s political agenda. And if his visionary proposal injects these issues into campaign 2016, so much the better.

It’s hard to imagine a more urgent national priority than modernizing America’s decrepit transportation and water systems and updating our energy-wasting electrical grid.

With our economy stuck in low gear six years into “recovery,” making such investments now should be a no-brainer. It’s a proven way to create good middle-class jobs, boost the productivity of U.S. businesses and workers, and lay new foundations for future growth.

The deterioration of our country’s economic infrastructure has long been glaringly obvious, but U.S. political leaders have failed to coalesce behind policies for reversing it. A big reason is that Congress is controlled by a new breed of Republicans who regard all federal spending with kneejerk hostility. Conservative lawmakers seem to have lost the ability to distinguish between investments that generate tangible economic returns to society and spending that fuels present consumption.

Continue reading at Democracy.

Financial Times: Democrats struggle to harness economic feelgood factor

Posted on by The Progressive Policy Institute

Will Marshall, president of the Progressive Policy Institute, said that once Democratic strategists have moved past the primaries and into the general election they will need to portray a hopeful economic picture to voters — learning from the 2014 midterm elections in which he said the party had failed to capitalize on economic improvements under Obama.

The great issue in this campaign remains the great stagnation — the slow growth trends in this century,” he said. “But it is not for a semi-incumbent [like Mrs Clinton] to bemoan how terrible things are. You have to give people a sense of hope that the policies put in place in the last eight years have begun to put the country back on the path of full recovery.”

To read more, go to the Financial Times.

McClatchy: At start of campaign, the last gasp of political parties?

Posted on by The Progressive Policy Institute

David Lightman quotes PPI President Will Marshall about how political parties are losing their grasp on the American political system:

In 2012, average voter turnout for statewide primaries for president, governor and U.S. Senate plunged to its lowest level since the modern primary system became popular in 1972.

“No one likes political parties anymore,” said Jan Leighley, who studies voter behavior at American University, where she is a professor of government.

“They no longer have to work through the political process,” added Will Marshall, president of the Progressive Policy Institute.

It’s a historic change in voter behavior. The Democratic and Republican parties have dominated American politics since the mid-1850s. They grew and prospered as inclusive coalitions that tolerated diverse views for the sake of winning elections and then consolidating power.

Read the article in its entirety at McClatchy.

The Hill: In TPP review, focus on small business and digital trade

Posted on by The Progressive Policy Institute

With the release of the full text of the Trans-Pacific Partnership (TPP) trade agreement last November, the American people and their representatives now have an extensive opportunity to analyze the specific provisions of the proposed deal. In addition, as required by recent trade legislation, the U.S. International Trade Commission (USITC) is conducting a detailed, independent review of the likely economic impact of the TPP on specific industry sectors and the overall U.S. economy.

In recent comments filed in the USITC investigation, the Progressive Policy Institute (PPI) urged the Commission to pay particular attention to the beneficial economic effects of the TPP’s groundbreaking provisions on small business trade, international e-commerce, and the digital economy.

PPI has highlighted in recent reports the transformative role that digital tools—including Internet platforms like eBay—are playing in “democratizing” trade. Increasingly, smaller, digitally enabled American exporters can often sell products and services to customers around the world as easily as their large, established competitors.

But, for the digital economy to continue to transform trade, countries must resist a growing trend toward “digital protectionism.” As PPI’s submission explains, the TPP would support the continued growth of digital trade through groundbreaking rules that would require countries to allow commercial data flows; restrict “data localization” requirements that mandate where data or facilities must be located; and require privacy, consumer protection, and other rules to promote more secure and robust international e-commerce.

PPI’s comments also underscore the importance of the TPP’s many pioneering provisions to help small and medium-sized enterprises (SMEs) to export. These include the creation of a special committee to assure that the agreement works for SME traders; a requirement that countries create user-friendly digital information portals to assist SME traders; and eliminating or significantly reducing high duties, regulatory barriers, and customs delays that the studies by the Commission and others show can place disproportionate burdens on smaller traders.

PPI’s submission emphasizes that these and other TPP provisions have significant potential to support substantial expansion of American SME exports and economic growth that is shared more widely by more Americans. Studies by the Commission and others have found that smaller firms that export are more productive, hire more employees, and pay higher wages than non-exporting SMEs. And PPI’s own analysis shows that woman- and minority-owned firms that export employ three to five times more workers—and pay salaries some 60 percent higher—than their non-exporting counterparts.

In short, TPP points toward the next frontier in international trade—new opportunities to promote digital trade and engage more small firms and entrepreneurs in global commerce. The International Trade Commission should assess the potential of such new forms of trade to reinvigorate U.S. economic growth and competitiveness.

This is cross-posted from The Hill‘s Congress Blog.

The Wall Street Journal: Marshall on Anger with Wall Street

Posted on by The Progressive Policy Institute

In his analysis of how the two parties still do not agree what caused the 2008 financial crisis, Nick Timiraos of The Wall Street Journal quotes PPI president Will Marshall:

Anger at Wall Street among primary voters in both parties illustrates how “extreme antibusiness populism on the left is intersecting with extreme antigovernment populism on the right,” said Will Marshall, president of the Progressive Policy Institute, a centrist Democratic think tank.

Read the article in its entirety at The Wall Street Journal.

PPI to Congress: Scrub the SCRUB Act

Posted on by The Progressive Policy Institute

House Republicans this week are expected to take up the ponderously titled Searching for and Cutting Regulations that are Unnecessarily Burdensome Act (SCRUB) of 2015 (H.R. 1155). The Progressive Policy Institute, a strong advocate for regulatory improvement, urges progressives to oppose this highly partisan bill.

Over the last three years, PPI has worked with reform-minded Democrats and Republicans in Congress, as well as Independent Senator Angus King, to develop a more effective way of dealing with the problem of “regulatory accumulation,” the relentless buildup of rules over time. Sadly, House Republicans have chosen to ignore a bipartisan bill—the Regulatory Improvement Act of 2015 (H.R. 1407)—in favor of the SCRUB Act, a conservative favorite that stands little chance of winning Democratic support.

Both bills have in common the creation of an independent commission charged with winnowing outdated, duplicative or overly burdensome federal regulations. There, the similarities mostly end. And while the House’s latest version of the SCRUB Act clearly has been tweaked in response to criticism from regulatory experts, it still fails on three grounds:

First, the bill caters to conservative demands to roll back existing regulations and make it harder to issue new ones. Rather than mandate careful consideration of rules widely thought to be in need of elimination or improvement, it requires the commission to cut regulatory costs by 15 percent—an arbitrary goal with no clear policy rationale. And while SCRUB’s vague, nonbinding language gives priority to examining “older major rules,” it could open the door to fresh assaults on favorite conservative targets: rules implementing Obamacare, the Dodd-Frank financial reforms, and the Environmental Protection Agency’s Clean Power Plan. The Regulatory Improvement Act, on the other hand, explicitly prohibits consideration of rules less than ten years old by its commission.

Second, the SCRUB Act enshrines a foolishly impractical “Regulatory Cut-Go” mandate. Under this procedure, no federal agency could issue a new rule unless it cut old ones that impose equal “costs” on the economy. The idea is to offset the cost of new regulations by killing old ones. This attempt to make regulation a zero-sum game would create pressures to target cost-effective rules for elimination based on highly imprecise estimates of what a new rule might cost—and with no consideration of the many public benefits of regulation.

Third, the SCRUB Act has zero support among House and Senate Democratic leaders or within the Obama administration. As a conservative “message” vehicle, rather than a serious legislative proposal, the bill will likely die in the Senate before it can be vetoed. In contrast, the House version of the Regulatory Improvement Act introduced by Congressmen Patrick Murphy (D-FL) and Mick Mulvaney (R-SC), has an equal number of Democratic and Republican co-sponsors. Defying the logic of polarization, it builds political support for smarter regulation from the center out.

At the core of this legislation is the Regulatory Improvement Commission—an independent, bipartisan commission under Congressional authority ensuring there is no hidden regulatory agenda. Consisting of nine members appointed by the president and Congress, the commission, after a formal regulatory review, would submit a list of regulatory changes to Congress for an up-or-down vote without amendment. This approach would build political trust and lay the groundwork for further rounds of regulatory review and revision.

Most important of all, the Regulatory Improvement Commission would lift the burden of regulation accumulation from the backs of U.S. workers, businesses, and taxpayers. It would reduce compliance costs and—most crucially—the opportunity costs that accrue when entrepreneurs and business managers spend their energies on complying with unnecessary rules rather than creating value.

PPI urges progressives to support a more politically viable mechanism for improving the regulatory environment for economic innovation and growth—the Regulatory Improvement Act.

Innovation in a Rules-Bound World: How Regulatory Improvement Can Spur Growth

Posted on by The Progressive Policy Institute

Economists and policymakers are always lauding innovation. In its purest form, innovation is like a free lunch: it boosts growth and incomes, creates good jobs, and opens up new possibilities for social reform and social mobility.

Today, innovation is needed more than ever. Productivity growth has been slowing in recent years. The 10-year growth rate of nonfarm business labor productivity is only 1.3 percent in 2015, compared to 3 percent as recently as 2005. A full one percentage point of that 1.7 percentage point decline, or more than half, is due to a slowdown in the growth rate of multifactor productivity, an indicator of innovation. In other words, the economic evidence suggests that this is an era of relatively weak innovation, outside of information technology.

Indeed, encouraging innovation is more essential than ever before. Fortunately, industries such as health care, education, finance, and tech are attempting to adopt new technologies that offer the chance of faster growth and higher wages, desperately needed to overcome years of stagnation.

But regulators, both in Washington, and at the state and local level, struggle with a rapid pace of innovation. Innovation, especially disruptive innovation, embodies unpredictability, change, and the creation of new products and markets. By contrast, regulators thrive on rules and predictability. They maintain a process of identifying an existing market failure and then issuing regulations that aims to make consumers and society better off by correcting that failure. The regulation process is far more straightforward when markets change slowly and predictably.

Download “2015.12-Mandel_Carew_Innovation-in-a-Rules-Bound-World-How-Regulatory-Improvement-Can-Spur-Growth”

WSJ: Small Businesses With a Big Stake in the Pacific Trade Deal

Posted on by The Progressive Policy Institute

During the seven years that the Trans-Pacific Partnership was being negotiated, critics repeatedly claimed that the trade agreement wouldn’t be about trade or cutting tariffs but, instead, would primarily advance the special interests of large multinationals. Economist Joseph Stiglitz, for example, warned that the TPP could “benefit the wealthiest sliver of the American and global elite at the expense of everyone else.”

The negotiations are now over, and the full text of the agreement, released on Nov. 5, tells a different story. Notably, the agreement includes groundbreaking provisions that better enable smaller businesses to prosper by exporting to the 12 countries that are in the partnership. The growing markets in these countries account for some 40% of the global economy.

Ninety-eight percent of America’s 300,000 exporters are small or medium-size enterprises (SMEs)—firms with fewer than 500 employees. Together they account for about a third of the $1.6 trillion in annual goods exports. And because only 5% of SMEs currently export, there’s a significant potential for growth.

Small businesses account for almost two-thirds of America’s net new jobs and—according to economists—are essential building blocks for economic mobility. Smaller firms that export are especially prolific creators of good jobs for diverse groups. Census Bureau data show that the average American women-owned exporter, for example, employs five times more workers and pays an average salary almost $17,000 more than women-owned non-exporters. Similarly, minority-owned exporters employ three times more workers and pay nearly $16,000 more.

Continue reading at the Wall Street Journal.

RealClearPolitics: What Obama Must Do in Syria

Posted on by The Progressive Policy Institute

Syria has become Barack Obama’s Iraq—a foreign policy debacle rooted in faulty assumptions about the utility of American power. Where George W. Bush overstated what U.S. military intervention could achieve in Iraq, Obama has underestimated the risks and costs of non-intervention in Syria.

The analogy will rankle many progressives, as well as conservative “realists” who have praised Obama’s doctrine of U.S. restraint. But any administration’s policies must be judged by their results, not the elegance of their conceptual underpinnings. And the results of Obama’s decision to stand aloof from the Syrian crisis have gone from bad to worse.

Despite declaring early on that Syrian dictator Bashar al-Assad must go, Obama in 2012 overruled his national security team — including then-Secretary of State Hillary Clinton — which urged him to train and equip moderate Syrian rebels not allied with jihadists groups. Having decided the previous year to pull all U.S. troops out of Iraq, Obama was not about to get sucked into Syria.

But power vacuums invite trouble, especially in the combustible Middle East. The Syrian caldron soon boiled over, morphing into a regional conflict as Iran and Hezbollah rushed to Assad’s rescue, while Saudi Arabia and Arab states came to the aid of Sunni rebels. Then came the hard-core Islamists of al-Qaeda and the even more fanatical spinoff, the Islamic State (commonly called Daesh), which proclaimed a new caliphate centered in Raqqa.

Continue reading at RealClearPolitics.

The Trans-Pacific Partnership and Small Business: Boosting Exports and Inclusive Growth

Posted on by The Progressive Policy Institute

With the release of the full text of the Trans-Pacific Partnership (TPP), America now has an important—and extensive—opportunity to review the agreement’s actual terms. Critics are certain to reprise old arguments, including those that blame trade for economic disruptions whose origins often lie elsewhere. And they’ll offer newer criticisms, including the claim that TPP isn’t really about trade or cutting tariffs but, rather, is a scheme to advance the agenda of large multinational corporations.

This latest charge will likely be news to the hundreds of thousands of small and mid-sized American firms that currently export—and the growing numbers of small entrepreneurs who are seeking greater opportunity through trade. America’s smaller exporters will note that the TPP has made small business trade a key point of emphasis, and that it includes groundbreaking provisions to boost their ability to export to key TPP markets.

Increasing exports by U.S. small business can also be a vital opportunity to promote stronger—and more inclusive—economic growth. Small and medium-sized enterprises (SMEs) that export have higher sales, hire more employees, and pay higher wages than non-exporting SMEs. And because exporters account for only about one percent of all U.S. SMEs, America has significant untapped potential to support growth, good jobs, and economic mobility through increased small business trade.

But to meet this potential, it’s vital for the United States to reduce the extensive and often onerous foreign trade barriers that often keep SME traders on the sidelines. High duties and costs, customs red tape, unnecessarily complex regulations, and other barriers negatively impact American exporters of all sizes, but they can loom particularly large for small entrepreneurs that lack the resources, personnel, contacts, and extensive support networks of bigger competitors.

In this policy brief, we first review the TPP agreement and explain how it would eliminate significant trade barriers to U.S. small business and enable more American SMEs to prosper by exporting to fast-growing Asia-Pacific markets. We then highlight how the TPP’s support for small business trade can play a vital, broader role, helping to boost the overall economy and “democratizing” trade by assuring that trade’s significant benefits are shared more widely by more Americans.

Download “2015.11-Gerwin_The-Trans-Pacific-Partnership-and-Small-Business_Boosting-Exports-and-Inclusive-Growth”

 

Agenda 2016: Reviving U.S. Economic Growth

Posted on by The Progressive Policy Institute

The Progressive Policy Institute (PPI) teamed up with Columbia University’s Richard Paul Richman Center for Business, Law, and Public Policy to co-host a compelling symposium Nov. 6-7 in New York on revitalizing the U.S. economy. The event featured a distinguished roster of Richman Center economists and scholars, as well as PPI analysts and special guests, and more than two-dozen top policy aides to Members of Congress, Governors, and Mayors.

Held on Columbia’s Manhattan campus, the symposium examined the U.S. economy’s recent performance, as well as the causes of the long-term decline of productivity and economic growth. Against the backdrop of the 2016 election debate, the participants grappled with specific ideas for unleashing more economic innovation, modernizing infrastructure, reforming taxes, improving regulation, expanding trade and reducing inequality by ensuring that all children have access to high-quality public schools.

The discussions, which were off-the-record to encourage maximum candor, featured the following speakers and topics:

  • An overview of the U.S. economy’s recent performance by Abby Joseph Cohen, President of the Global Markets Institute and Senior Investment Strategist at Goldman Sachs.
  • A roundtable on key elements of a high-growth strategy, led by Michael Mandel, Chief Economic Strategist at PPI, Andrew Stern, former head of the Service Employees International Union and now Ronald O. Perelman Senior Fellow at the Richman Center, and
Philip K. Howard, Founder of Common Good, a nonpartisan reform coalition. The conversation touched on ways to improve the regulatory environment for innovation, including reducing regulatory accumulation and requiring faster permitting for big infrastructure projects, as well as a lively debate on the future of work in a tech-driven knowledge economy.
  • An insightful macroeconomic analysis of why productivity and economic growth have slowed, by Pierre Yared, Associate Professor at the Columbia Business School and Co-director of the Richman Center. Yared highlighted three potential contributors to the slowdown: labor demographics and participation; “capital intensity” or business investment; and the “production efficiency” of U.S. companies.
  • A detailed examination of the impact of energy innovation—from the shale boom to renewables and the construction of a new, “smart” grid—on jobs and economic growth. Leading this segment were Jason Bordoff, formerly energy advisor to President Obama and Director of Columbia’s Center on Global Energy Policy, and Derrick Freeman, Director of PPI’s Energy Innovation Project.
  • A dinner conversation at the Columbia Club with Edmund Phelps, the 2006 Nobel Laureate in Economics and Director of Columbia’s Center on Capitalism and Society at Columbia University. Drawing on his recent book, Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge and Change, he stressed the importance of indigenous innovation in creating the conditions for broad upward mobility. He also emphasized the crucial role of “modern” or individualistic cultural values in sustaining the mass innovation and entrepreneurship America needs to flourish again.
  • A detailed look at business taxation and reform as a potential driver of economic growth. It featured Michael Graetz, Alumni Professor of Tax Law at Columbia Law School, David Schizer, Dean Emeritus and the Harvey R. Miller Professor of Law and Economics at the Columbia Law School and Co-director at the Richman Center, as well as PPI’s Michael Mandel. The discussion ranged widely over global tax frictions, including the OECD’s new “BEPS” project; the need for corporate tax reform; “patent boxes” and mounting U.S. interest in consumption taxes.
  • A roundtable on trade and productivity growth with Ed Gerwin, PPI Senior Fellow for Trade and Global Opportunity and the versatile Michael Mandel. Noting President Obama’s controversial call for a Trans-Pacific Partnership, Gerwin stressed the agreement’s potential for “democratizing” trade by making it easier for U.S. small businesses to connect with customers abroad. Mandel underscored another PPI priority: raising awareness among policymakers of the growing contribution of cross-border data flows to growth here and abroad, and the need to push back against proposals that would impede “digital trade”
  • A luncheon presentation on “financial regulation after the crisis” by Jeffrey Gordon, Richard Paul Richman Professor of Law at Columbia Law School and Co-director of the Richman Center. Gordon described the new regime put in place by Dodd-Frank and other rules to guard against “systemic risk” of another financial meltdown, and suggested its “perimeter” may been to be expanded beyond banks.
  • The symposium’s final panel featured a vigorous discussion on K-12 education reform and the economy. The discussants were Jonah Rockoff, Associate Professor at the Columbia Business School and David Osborne, who directs PPI’s Reinventing America’s Schools Project, and is a co-author of the seminal “Reinventing Government.” Rockoff highlighted research showing that the returns to school improvement are enormous, and recommended reforms that could increase school quality. Osborne traced the evolution of school governance in America, and offered detailed looks at new models emerging in cities like New Orleans and Washington, D.C., both of which are leaders in the public charter school movement.

The symposium gave the policy professionals who participated a rare opportunity to delve deeply into complicated economic realities, guided by presenters of extraordinarily high caliber. The conversations were highly illuminating and will inform PPI’s work on Agenda 2016—a new blueprint for reviving U.S. economic dynamism and opportunity.