Whining Whiners and the Whines They Tell: Ad Blocker Edition

Earlier this week a number of Yahoo Mail users took to social media and online forums to announce that, as a result of recent actions by the company, they were henceforth refusing to use the service. You might wonder what transgression would be so serious that it would cause users to abandon their preferred email platform. Was Yahoo secretly using child labor to run its cloud services? Did the company announce plans to open offices in North Korea? No, Yahoo’s sin was significantly worse—the company told users of its free webmail service that they had to stop using ad blockers to continue using its service.

For those who are uninitiated, ad-blockers are web browser plug-ins that do exactly what their name suggests—block online ads from displaying on a website. Users install these plug-ins because it allows them to view websites without the indignity of seeing ads. As you have surely surmised, this is truly an outrage. How dare a company expect its users to view ads on its free, ad-supported email service? This would be like a restaurant expecting its customers to pay the prices listed on its menu for

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One Small Step for Auctions, One Giant Leap for the Spectrum Relocation Fund

President Obama has now signed into law the Bipartisan Budget Act of 2015, which puts into force a title specific to radio spectrum auctions. Telecom legislation is a rare bird, and many were excited to see authorization for the next tranche of spectrum auctions. There is some good and some bad—here is a rundown of what’s in the new law, and what we at ITIF would have liked to see.

First the good. The title of the legislation specific to spectrum, a.k.a. the “Spectrum Pipeline Act of 2015,” makes much needed changes to what is known as the spectrum relocation fund, or “SRF.” The SRF is a pot of money managed by the Office of Management and Budget to pay for federal entities to transition radio systems when their spectrum is repurposed for other uses. Eight years after the creation of the fund in 2004, the 2012 Tax Relief Act—which extended the FCC’s auction authority and set the upcoming 600 MHz incentive auction in motion—expanded the types of costs which federal agencies could recover from the SRF. However, those funds were still limited to planning and research directly

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China’s Exaggerated Semiconductor Trade Deficit No Justification for Mercantilist Policies

As ITIF has long argued, China pursues an autarkic, indigenous economic growth and innovation development strategy, particularly with regard to high-tech products. For example, in the semiconductor sector, China has launched a $100 billion National IC (integrated circuits) Industry Development plan designed to significantly increase domestic IC production and to reduce China’s imports of semiconductors—by half in 10 years and entirely in 20 years. To justify its mercantilist industrial development policies China claims hardship: we import too many semiconductors. This argument has been broached again recently given the potential merger between two semiconductor companies, one of which, Western Digital, has a major Chinese stockholder. This simplistic analysis needs to be called out for what it is—false—and a façade for a policy which breaches rules China agreed to when joining the WTO.

One reason China has tried to give for its aggressive and mercantilist IC industry development plan is that it runs a “large” trade deficit in semiconductors—$232 billion in 2013—which supposedly justifies efforts to replace foreign imports with domestic production, but this rationale is wrong on several levels. First, this simplistic narrative fails to account for the fact that

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Time to Stop Blaming Manufacturing Job Losses on the (Nonexistent) Shift to Services

The U.S. lost more than 5 million manufacturing jobs since 2000 (roughly a 30 percent drop), while nonmanufacturing jobs have grown by 8 percent. Understanding why is critical to developing the right policy response.

Unfortunately, too many apologists for U.S. manufacturing decline argue that manufacturing employment loss is a natural trend. They blindly follow the assumption that as economies get richer they naturally consume a smaller share of manufactured goods and a larger share of services.  Therefore, we should expect manufacturing job losses.

New data from the St. Louis Federal Reserve Economic Data should hopefully put an end to these false claims. Recent analysis demonstrates that after adjusting for inflation, the share of real consumption of services has actually decreased slightly after reaching a peak in 1992. At the same time, durable goods manufacturing consumption is growing as a share of total consumption.

Accounting for inflation, services reached a peak of 70 percent of total consumption in the mid-1990s and have since declined to around 66 percent. This is not so different from the late 1950s when services made up 62 percent of total consumption. Meanwhile, the consumption of durable

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Three Big Things ‘Back to the Future’ Got Right (Thanks to Government)

Today is the day that Michael J. Fox’s iconic character Marty McFly landed in a future that Hollywood imagined almost 30 years ago in Back to the Future II. It turns out that many of the amazing things McFly saw in the movie have indeed come to pass—from 3D video to wearable technology.

But in celebrating our technological advancements, it is important to remember that none of these innovations happened by chance. They are the product of an enormous amount of investment in research and development—much of it seeded by the federal government. Since today also is the day that the White House is releasing the third iteration of its national “Strategy for American Innovation,” here are three prime examples:

Tablets and Other Smart Devices

The tablet computing props in Back to the Future II accurately predicted the miniaturization of electronic devices in recent years. The parallels between the movie and modern society’s use of tablets seem uncanny: from the way Marty’s nemesis Biff paid a taxi fare with his thumb print to the way policemen in the movie used a tablet computer to check the identity

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