NDN Blog

New NDN White Paper - The Rise of the Rest: How New Economic Powers are Reshaping the Globe

Today, NDN President Simon Rosenberg sent out the following email announcing the release of a new NDN white paper entitled The Rise of the Rest: How New Economic Powers are Reshaping the Globe.

Over the course of the last two decades, the global economy has changed dramatically. New regions, nations, businesses, and people have risen up to join the global economy in a manner that has begun to shift the very foundation of international relationships. This phenomenon, which we at NDN, inspired by Fareed Zakaria, describe as the "Rise of the Rest," is one of the most consequential developments of the early 21st century. 

Jake Berliner, Deputy Policy Director of the NDN Globalization Initiative, has authored a white paper describing this phenomenon and its impact in shaping the modern global economy. The paper, entitled The Rise of the Rest: How New Economic Powers are Reshaping the Globe, argues that the Rise of the Rest is not reason to fear American decline, but that it should instead be both cause for optimism about the future of the American and global economies and incentive for America to rise to this great challenge.

The paper is Jake's second in a series of targeted white papers highlighting particularly important pieces of the ongoing economic debate. It follows A Lost Decade for Everyday Americans, an essay released in December that helped set the "Lost Decade" narrative. The essay made the case, central to understanding the ongoing economic downturn, that economic hardship arrived for everyday Americans long before the Great Recession began.

Please read the new paper here on the NDN website.

Best regards,
Simon Rosenberg
President, NDN

Department of Facts: Real Median Household Income

If you were just watching Fox News, you saw Simon discussing the Tea Parties. He pointed out that one key reason for anger with the government is that everyday Americans have seen their incomes decline over the last decade (which we've called a lost decade for everyday Americans). The show's host questioned Simon's facts on this point. Here's a graph, straight from Census Bureau data:

household income

What it shows is that median household income in fact declined by more than $2000 during the Bush Presidency, from $52,500 in 2001 to $50,330 in 2008.

I know we want the government to keep it's hands off of our government statistics, but, as Daniel Patrick Moynihan used to say: you're entitled to our own opinions, but not your own facts.

Progressive, Liberal, or Fascist - The Left According to the Right

Courtesy of Jonathan Chait, Michael Lind's look at the academics behind Glenn Beck's condemnation of contemporary progressivism is a fascinating read. The part Chait highlights:

The problem arises when these scholars, and their popularizers like Beck and Goldberg, treat all American liberalism and leftism from World War I until the 21st century as the continuation of early 20th century progressivism, the better to denounce today's liberalism as "historicist" and "relativist" and lump it with the Confederate and Nazi ideology. This ignores the profound differences between the Progressive movement and subsequent movements on the American center-left.

New Deal liberalism broke with progressivism in many if not most respects. Progressives wanted technocratic economic planning. By the 1940s, New Dealers dropped planning for Keynesianism. Most progressives were nativists who supported immigration restriction on ethnic or cultural grounds. New Deal liberals celebrated the melting pot and liberalized American immigration laws in the 1960s.

Wilson resegegrated Washington. Lyndon Johnson signed the Civil Rights Act and the Voting Rights Act. Franklin Roosevelt created Social Security and Johnson created Medicare. Wilson opposed national health insurance.

It is even harder to find any traces of Wilsonian progressive DNA in the New Left of the 1960s and '70s or the neoliberalism of the 1970s and '80s. Wilsonian progressives idolized the impartial expert administrator. The New Left denounced bureaucracy and academic hierarchy. Wilsonian progressives wanted a state-directed economy. Neoliberals like Bill Clinton, Al Gore, Robert Rubin and Larry Summers celebrated deregulation and free markets.

For Straussian scholars and popularizers like Beck and Goldberg to denounce modern progressives because long-forgotten WASP political scientists in the early 1900s favored eugenics or economic planning is absurd. It is as though today's liberals denounced today's conservatives on the grounds that in the late 19th century the McKinley Republicans favored excessively high tariffs.

What I wonder, though, is if the modern center-left didn't give the right permission to lump it in with turn of the century Progressives when it ran away from the word "liberal." Choosing to adopt progressive when the right made "liberal" synonymous with "weak" was an understandable move, albeit one that seems to have created a slightly inaccurate label for the movement. Certainly, the modern left/center-left coalition has elements perhaps more appropriately termed as progressive, but, for the most part, the Roosevelt at the heart of the movement is Franklin, not Teddy. Liberalism triumphed over Fascism and Communism, helped forge the modern world, and is the philosophy at the center of virtually all relevant policymaking in America today. Reinvesting the center-left in the word liberal is a tall task, but liberal is ultimately a more meaningful, relevant word than any other to describe our world view.

Tomorrow: NDN Green Project Director Michael Moynihan Presents Electricity 2.0 at Georgetown Conference

gtownNDN Green Project Director and author of Electricity 2.0: Unlocking the Power of the Open Energy Network (OEN), will be presenting at a conference hosted by Georgetown University’s McDonough School of Business. The conference will feature leaders from government, business, and academia discussing clean technology finance and policy. Michael will moderate a panel on the policy environment driving the cleantech revolution and deliver a presentation on Electricity 2.0 at lunch.

Press release from the the McDonough School of Business:


Panelists to Discuss how Finance and Policy can Create Change, April 10

WHAT: “Green to Gold: Creating the Clean Energy Economy” is a conference hosted by students at Georgetown University’s McDonough School of Business that will examine the development of a clean energy economy through the eyes of leaders from venture capital, private equity, government, non-profits, and business. The keynote speaker will be clean energy proponent James Woolsey, former director of the CIA and directing partner at Vantage Point Venture Partners.

The event also will feature two panels. The first, “Clean Energy Finance and Investment,” will explore current trends in venture capital and private equity investing in clean tech. It includes Mark Huang, partner, Novus Energy; Joan Midthun Larrea, managing director, Global Environmental Fund; Ricardo Nogueira, Leaf Clean Energy; and Hovey Kemp, partner, Goodwin Proctor.

The second, “Clean Energy Policy Environment,” will discuss the policy environment that is driving the clean tech revolution. It includes Matt Clouse, director of renewable energy programs, Environmental Protection Agency; John Stanton, vice president of regulatory affairs, Solar City; and Jigar Shah, CEO, Carbon War Room.

The event will conclude with a networking lunch and presentation by Michael Moynihan, director of green programs at the think tank NDN, about his recently released research paper, “Electricity 2.0.”

The event is hosted by the Georgetown Energy and Clean Tech Club at Georgetown’s McDonough School of Business. For more information, including speaker biographies, visit http://cleantech.gumbaclub.org/2010symposium.

WHEN: Saturday, April 10, 2010
10 a.m. Keynote 
11 a.m. Clean Energy Finance and Investment Panel 
Noon Clean Energy Policy Environment Panel 
1 p.m. Lunch Presentation

WHERE: Georgetown University, McDonough School of Business, 37th & O Streets, NW, Rafik B. Hariri Building, Fisher Colloquium, Washington, D.C.

RSVP: Open to the public. $15 admission fee. RSVP online at http://cleantech.gumbaclub.org/2010symposium.

Media who are interested in covering the event should contact Teresa Mannix, director of media relations, at (202) 687-4080 or tmm53@georgetown.edu.

Nuanced Approach to Chinese Currency Conundrum Bears Fruit

While much of the debate surrounding the Obama administration’s decision to delay a Treasury Department report on China’s currency practices, has defined the decision as a trading China’s help with Iran for benefits to the American economy, the decision is mostly about effectively achieving revaluation of China's currency. The report, which might have (accurately) labeled China a currency manipulator, would have been another bump – this one likely fairly major – in the already strained U.S. – China relationship. Instead, the decision to pursue the currency issue through the G-20 and other diplomatic avenues should be seen not as a concession by the U.S. but rather as the more appropriate, intelligent, and ultimately effective means of pursuing necessary economic adjustment in a changing global economy.

While politically convenient and satisfying on some levels, declaring China a currency manipulator, thereby unleashing a set of political and legal actions, would likely have backfired. The Chinese are clearly unwilling to make policy changes that come as a result of direct, vociferous, public pressure from foreigners, especially the United States, so the report would have set back the effort as opposed to push it forward. Continuing down the path the report would begin by imposing a retaliatory tariff on Chinese imports and risking a trade war would be dangerous, especially as the American and global economies remain vulnerable to additional shocks.

There is already strong domestic debate within Chinese leadership on the issue. It looks like it is only a matter of time until there is some revaluation of the RMB. Indeed, RMB futures responded bullishly to the news, conveying a belief that the administration’s strategy makes it more likely that China will move in the right direction. Secretary Geithner’s visit to China is another sign that the move is paying immediate dividends in the relationship, and recent signs illustrate that it is likely only a matter of time until China makes a policy change.

Because the greatest victims of China’s currency practices are not Americans but instead other emerging economies, the administration’s decision to pursue diplomatic action through the G-20 makes sense. The G-20’s membership incorporates nations far more affected by China’s currency practices than the U.S. In that light, the administration’s decision last year to double-down on the G-20 in lieu of the G-8 seems all the more prescient. 

While China’s currency practices are a convenient scapegoat for fears about a changing global economy, this situation also requires a bit more perspective than some are taking today. While the Chinese currency practices are certainly untenable – both for the US and for China – a revaluation of the RMB is unlikely to have significant, short-term economic impact or alleviate America’s economic woes, and Americans will continue to buy cheap consumer goods from other low cost economies (just other low cost economies, which is why China’s currency policy hurts others more than it hurts the US). It’s also important to note that country by country balance matters far less than our global trade balance. 

Fundamentally, the rise of China and many other emerging economies will ultimately suit America’s values and economic interests, as new markets open, and billions emerge from poverty and enter the global middle class. The transition into this new global economy will be bumpy, but the Obama administration’s response of investing in diplomacy through more representative international institutions conveys an appropriate response to these changes and an understanding the most effective, if not the most emotionally satisfying, stewardship of America’s place in the global economy. 

Media Round-Up: Green Project Director Michael Moynihan at COMPETE Coalition Forum

Yesterday, Michael Moynihan spoke alongside energy experts Bill Massey, Dan Munson, and Kurt Yeager at an event hosted by the COMPETE Coalition. Here are a couple of the accounts of the event from trade press:

From Restructuring Today:

Compete Coalition conference reminded why innovation is key 

The current system of power industry regulation is ill-suited for driving innovation in the very significant ways needed to address climate change, experts said at a Compete Coalition event yesterday in Washington. Innovation in the industry has been declining, notwithstanding the work at EPRI, with low R&D budgets and little incentive to try new things, said think tank NDN's Green Project Director Michael Moynihan.

Moynihan's report titled "Electricity 2.0" advocates opening up the grid or "network" to two-way communication between customers and suppliers.

More here (subscription required).

From Electric Power Daily:

Experts decry antiquated nature of grid, regulations 

The current regulatory structure "has created the grid it was designed to create" but is extremely ill-suited to meet the needs of a 21st century electric industry, an official with a Washington think tank said Wednesday.

US consumers can "buy flowers from Ecuador but can't get electricity, moving at the speed of light, from one coast to the other," Michael Moynihan, director of NDN's Green Project, said at a panel discussion hosted by the Compete Coalition.

With a structure that offers no incentive to conduct innovative research and development, or even to deploy innovations by others, the electric utility industry cannot be expected to lead the way to a clean energy future, he asserted. Moynihan avoided laying blame entirely at the feet of the power industry, observing that "we absolutely do not have the policies in place" to encourage innovation; to the 

contrary, they work against it.

Sharing the view that industry is not to blame, Dick Munson, senior vice president at Recycled Energy Development, agreed it is a policy problem. "Without competition, we are going to limit ourselves to expensive and dirty power," he asserted. The current regulatory regime "is byzantine at best."

But that does not mean there is no role for government, Munson continued. "Government needs to set the goals for where we are headed," and open up the markets to "a flood of innovators and entrepreneurs," he said.

Decrying a "bipartisan habit" on Capitol Hill of trying to pick winners, Munson suggested Congress should "set the standards and let the market figure out how to get there." And whatever the standards, added Kurt Yeager, executive director of the Galvin Electricity Initiative, the government must hold all companies to them.

One thing that is desperately needed is a standard for putting power onto the electric grid, Moynihan said. While there is a standard outlet for a consumer to plug into to draw electricity from the system, there is no standard inlet for getting power onto the system, he continued.

"That is precisely what you have in the organized markets," said William Massey, counsel for Compete. Competitive markets provide a standard "plug-and-play" feature and will "enable the innovation" advocated by the panelists, he added.

"A poorly designed market will perform poorly," Massey said, while a well-designed competitive market that encourages innovation can perform "exceedingly well."

A centralized organization, be it a utility or regulatory body, cannot do what the competitive market can, Moynihan agreed. You are "not going to get the diversity of ideas."

He recalled that AT&T's idea for advancing the old black rotary phone was to introduce the Princess phone. It was only after the telecommunications industry was pried open to competition that real innovation began. Likewise, a major obstacle faced by new technology in the electric industry is the "absence of the correct regulatory framework," Moynihan said.

More here (subscription required).

For more on Electricity 2.0, please visit www.ndn.org/electricity20

White House Fact Sheet: Key Provisions of Health Insurance Reform w/ Immediate Effect



1. SMALL BUSINESS TAX CREDITS—Offers tax credits to small businesses to make employee coverage more affordable.  Tax credits of up to 35 percent of premiums will be immediately available to firms that choose to offer coverage.  Effective beginning for calendar year 2010.  (Beginning in 2014, the small business tax credits will cover 50 percent of premiums.) 

2. BEGINS TO CLOSE THE MEDICARE PART D DONUT HOLE—Provides a $250 rebate to Medicare beneficiaries who hit the donut hole in 2010.  Effective for calendar year 2010.  (Beginning in 2011, institutes a 50% discount on brand‐name drugs in the donut hole; also completely closes the donut hole by 2020.) 

3. FREE PREVENTIVE CARE UNDER MEDICARE—Eliminates co‐payments for preventive services and exempts preventive services from deductibles under the Medicare program.  Effective beginning January 1, 2011. 

4. HELP FOR EARLY RETIREES—Creates a temporary re‐insurance program (until the Exchanges are available) to help offset the costs of expensive premiums for employers and retirees for health benefits for retirees age 55‐64.  Effective 90 days after enactment. 

5. ENDS RESCISSIONS—Bans insurance companies from dropping people from coverage when they get sick.  Effective 6 months after enactment. 

6. NO DISCRIMINATION AGAINST CHILDREN WITH PRE‐EXISTING CONDITIONS—Prohibits new health plans in all markets plus grandfathered group health plans from denying coverage to children with pre‐existing conditions.  Effective 6 months after enactment.  (Beginning in 2014, this prohibition would apply to all persons.) 

7. BANS LIFETIME LIMITS ON COVERAGE—Prohibits health insurance companies from placing lifetime caps on coverage.  Effective 6 months after enactment. 

8. BANS RESTRICTIVE ANNUAL LIMITS ON COVERAGE—Tightly restricts the use of annual limits to ensure access to needed care in all new plans and grandfathered group health plans.  These tight restrictions will be defined by HHS.  Effective 6 months after enactment.  (Beginning in 2014, the use of any annual limits would be prohibited for all new plans and grandfathered group health plans.) 

9. FREE PREVENTIVE CARE UNDER NEW PRIVATE PLANS—Requires new private plans to cover preventive services with no co‐payments and with preventive services being exempt from deductibles.  Effective 6 months after enactment. 

10. NEW, INDEPENDENT APPEALS PROCESS—Ensures consumers in new plans have access to an effective internal and external appeals process to appeal decisions by their health insurance plan.  Effective 6 months after enactment. 

11. ENSURING VALUE FOR PREMIUM PAYMENTS—Requires plans in the individual and small group market to spend 80 percent of premium dollars on medical services, and plans in the large group market to spend 85 percent.  Insurers that do not meet these thresholds must provide rebates to policyholders.  Effective on January 1, 2011. 

12. IMMEDIATE HELP FOR THE UNINSURED UNTIL EXCHANGE IS AVAILABLE (INTERIM HIGH‐RISK POOL)—Provides immediate access to affordable insurance for Americans who are uninsured because of a pre‐existing condition ‐ through a temporary subsidized high‐risk pool.  Effective 90 days after enactment. 

13. EXTENDS COVERAGE FOR YOUNG PEOPLE UP TO 26TH BIRTHDAY THROUGH PARENTS’ INSURANCE – Requires new health plans and certain grandfathered plans to allow young people up to their 26th birthday to remain on their parents’ insurance policy, at the parents’ choice.  Effective 6 months after enactment. 

14. COMMUNITY HEALTH CENTERS—Increases funding for Community Health Centers to allow for nearly a doubling of the number of patients seen by the centers over the next 5 years.  Effective beginning in fiscal year 2010. 

15. INCREASING NUMBER OF PRIMARY CARE DOCTORS—Provides new investment in training programs to increase the number of primary care doctors, nurses, and public health professionals.  Effective beginning in fiscal year 2010. 

16. PROHIBITING DISCRIMINATION BASED ON SALARY—Prohibits group health plans from establishing any eligibility rules for health care coverage that have the effect of discriminating in favor of higher wage employees.  Effective 6 months after enactment. 

17. HEALTH INSURANCE CONSUMER INFORMATION—Provides aid to states in establishing offices of health insurance consumer assistance in order to help individuals with the filing of complaints and appeals.  Effective beginning in FY 2010. 

18. CREATES NEW, VOLUNTARY, PUBLIC LONG‐TERM CARE INSURANCE PROGRAM—Creates a long‐term care insurance program to be financed by voluntary payroll deductions to provide home and community-based services  to adults who become functionally disabled.  Effective on January 1, 2011. 

Green Project Director Michael Moynihan to Speak in DC on March 24 on America’s Clean Energy Future

NDN Green Project Director and Electricity 2.0 author Michael Moynihan will speak on March 24 at noon at the National Press Club at an event entitled "Clean Energy, Smart Grid, and Energy Efficiency: Competitive Electricity Markets and the Path to America’s Clean Energy Future." The event will include leading experts in the clean energy and electricity fields.

The Compete Coalition, the sponsors of the event, issued the following release:

WHAT: Panel discussion exploring the intersection of competitive electricity markets and innovative clean energy, smart grid, energy efficiency, and demand response technologies. 

Unique characteristics of organized electricity markets, such as transparent price signals, well-functioning forward markets, and large geographic scope encourage innovative energy solutions to meet America’s economic and environmental needs. These findings were reflected in the recent “Electricity 2.0” report by NDN and the New Policy Institute, which found that competition in electricity markets is needed to stimulate innovations such as smart grid and clean energy technologies.

WHO: Bill Massey, former Commissioner, Federal Energy Regulatory Commission

Michael Moynihan, Green Project Director, NDN

Dick Munson, Senior Vice President, Recycled Energy Development

Kurt Yeager, Executive Director, Galvin Electricity Initiative

WHERE: Zenger Room, National Press Club, 529 14th Street NW, Washington, D.C.

WHEN: Wednesday, March 24th, 2010, 12:00 p.m. to 1:00 p.m. 

Senator Mark Warner to Address NDN Today on the Economy


This event is full. If you have RSVP'd, please arrive at 11:45 in order to ensure entry. The event will also be live webcast.

Senator Mark Warner will join NDN today to address America's economic competitiveness in a rapidly changing global economy. He will discuss the role of innovation in creating prosperity and offer his perspective on the Senate's work to craft a new economic strategy for America, which includes reforming the nation's health care and financial sectors.

Warner, a former Governor of Virginia, sits on the Senate's Banking, Budget, Commerce, and Rules Committees and the Joint Economic Committee. An early leader in the cellular telephone industry and long-time NDN friend, Senator Warner has distinguished himself as an important national voice for 21st century economic and innovation policies.

Senator Mark Warner on American Economic Competitiveness and Innovation
Thursday, March 18
Lunch served at 11:45; Event begins promptly at 12pm
NDN: 729 15th St. NW, 1st Floor
A live webcast will begin at 12pm
Watch webcast

A question and answer session will follow Senator Warner's remarks. 

Chinese Currency and Trade Issues Remain Central

The New York Times this morning covers China’s suppression of the renminbi to encourage exports and active use of the World Trade Organization’s rules to prevent protectionism by its trading partners. 

To maximize its advantage, Beijing is exploiting a fundamental difference between two major international bodies: the World Trade Organization, which wields strict, enforceable penalties for countries that impede trade, and the International Monetary Fund, which acts as a kind of watchdog for global economic policy but has no power over countries like China that do not borrow money from it.

China had a $198 billion trade surplus with the rest of the world last year, with its exports to the United States outpacing imports by more than four to one. Despite that, in the last 12 months, Beijing has filed more cases with the W.T.O.’s powerful trade tribunals in Geneva than any other country complaining about another’s trade practices.

In addition, Beijing has worked to suppress a series of I.M.F. reports since 2007 documenting how the country has substantially undervalued its currency, the renminbi, said three people with detailed knowledge of China’s actions.

China buys dollars and other foreign currencies — worth several hundred billion dollars a year — by selling more of its own currency, which then depresses its value. That intervention helped Chinese exports to surge 46 percent in February compared with a year earlier.

Paul Krugman, in his column today, calls on the Treasury Department to declare China a currency manipulator, I, like Krugman, believe that the common conception of China’s "ownership" of the U.S. is a bit backwards. (Think: When you owe the bank $1 million, the bank owns you, but when you owe the bank $100 billion, you own the bank.) Having said that, Krugman’s solution – "playing policy hardball" by imposing a 25 percent surcharge on imports – seems to approach dangerous levels of protectionism while the global economy remains unstable and could turn out to be ineffective, backfire, or start a trade war. 

Fundamentally, there seems to be a question of domestic Chinese politics at hand – the global economy would be helped by China floating the renminbi sooner rather than later, but that action cannot appear to come as a result of foreign, especially American, pressure. There is, of course, another calculation in play – China’s currency policies hurt America less than they hurt others, namely developing nations. Since public American pressure on this issue is likely to backfire and other countries should care about this a lot, we are left with the less-exciting (and less fun for economic pundits) avenue of behind-the-scenes diplomacy and multilateral action.

Two other stories worth following on global and domestic finance:

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