inequality

A Response to the Critics

I expected that there would be a lot of critical responses to my argument that Emmanuel Saez had “cooked the numbers,” in his study of income inequality,to show that virtually all of income growth during the “recovery” after the Great Recession went to the wealthiest 1 percent. I had a strong feeling that most people would miss my narrowly framed argument and think that I was belittling the negative effects of inequality on our population. Despite attempts to inoculate myself from this criticism by showing the relatively low share of income held by the top one percent in 1979, various commentators have criticized me on several grounds: not discussing wealth inequality; not seeing the long rise in inequality; picking selective years to make my points; helping the right wing; overemphasizing the effect of transfers because of the rise of Social Security and Medicare and failing to appreciate the difficulties of middle class people and exaggerating the effects on the rich.

I have an odd intellectual history in that I was one of the first researchers to report on rising inequality in the late 1970s  and 1980s, yet have for the … Read the rest

ip

Global IP Infringement’s Significant Cost to the U.S. Economy

“Abdominal pain comes first. After three days, the kidneys fail. After five days, neurological dysfunction leads to paralysis and breathing difficulties. Patients who survive will be dialysis-dependent for the rest of their lives. But in the end, most will die.” That’s from ITIF Trade Policy Analyst Michelle Wein’s gripping monograph, The Devil Wears Counterfeit Prada—And Sells Fake Glycerin: The True Cost of Global Trade in Illicit Goods, which leads by describing the mass poisoning of 100 Panamanian children in 2006 caused by Chinese exports of counterfeit glycerin that was really poisonous diethylene glycol. Unfortunately, that’s just one example: each year, approximately 1 million people around the world die from counterfeit drugs, which account for 30 percent of global drug sales. And that’s just the damage from one category of counterfeited products. It doesn’t even count the damage caused by counterfeit foods, pet medications, electronic products, or the over 1,800 cases of suspected counterfeit electronic parts recently found across a wide range of U.S. weapons systems, according to a 2012 Senate Armed Services Committee report. In fact, the total value of the global counterfeit goods trade now tallies $1.8 trillionRead the rest

Mobile Phone

Florida’s Cell Phone Tax Cut Could Help Reduce the Digital Divide

Governor Rick Scott (R-FL) is asking the Florida legislature to cut $470 million in taxes that the state collects from residents on their cell phone, satellite, and television bills. This proposal to cut the cellphone and TV tax rate by 3.6 percentage points will not only put money back into the pockets of everyday Floridians, but it is also a positive step in the right direction to help reduce Florida’s digital divide and will enable more innovation though mobile broadband.

Florida has one of the highest tax rates for wireless services (16.59 percent), falling behind only Washington, Nebraska and New York. In fact, consumers in seven states—Washington, Nebraska, Rhode Island, New York, Illinois, Missouri, and Florida—pay in excess of 20 percent of their bills for their combined state and federal tax rates.

So why have these taxes to begin with? States have traditionally turned to taxing services that people consume in their home because it is a reliable form of revenue. Someone in Florida cannot travel to Georgia to get a lower tax rate on their cell phone bill like they could for purchases of goods that include … Read the rest

trade

Securing the Competitiveness of America’s Export Industries

With Export-Import (Ex-Im) Bank reauthorization once again before Congress—its current authorization expires on June 30, 2015—it’s a good moment to take stock of the critical role the Bank plays in ensuring the competitiveness of America’s traded sector companies and industries. As the official export credit agency of the United States, the Ex-Im Bank plays a fundamental role in ensuring the global competitiveness of U.S. exporters, as ITIF described in its 2014 report The Export-Import Bank’s Vital Role in Supporting U.S. Traded Sector Competitiveness. Specifically, the Ex-Im Bank fills two key roles. First, it provides financing—in the form of loans or loan guarantees—to foreign purchasers of American products and services for export transactions that might not otherwise occur when private commercial lenders are unable or unwilling to provide financing to foreign purchasers of U.S. exports. Second, the Bank levels the playing field for U.S. exporters by matching the credit support that other nations provide, ensuring that U.S. exporters are able to compete based upon the price and performance of their products.

Put simply, the Bank makes possible U.S. exports that otherwise would not occur without its assistance. In FY 2013, … Read the rest

Flag_of_Ecuador.svg

You’re Ruining It for the Rest of Us: Ecuador and Intellectual Property

It appears that the global club of those who do not adequately appreciate intellectual property (IP) has gotten a new member: Ecuador. In the past few years the IP environment inside that small South American nation has deteriorated quite significantly, especially with regard to the protection of pharmaceuticals and biologics. And as the situation continues to worsen, those of us around the world paying attention are probably all thinking the same thing: You’re ruining it for everyone else.

Indeed, Ecuador’s weakening life sciences IP situation is just one of a long line of countries doing so around the world, including Canada, India, Nigeria, the Philippines, and South Africa. Ecuador’s decision to weaken its environment for life sciences IP risks perpetuating this global contagion effect. For example, since 2010 the nation’s main IP agency (responsible for ensuring IP rights, including enforcement and promotion) the Ecuadorian Intellectual Property Institute, has granted nine compulsory licenses (CLs) with 12 applications still pending. Six of those nine CLs were issued in 2014 alone, including one for Pfizer’s kidney and gastrointestinal cancer medication, Sutent. According to the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights … Read the rest