Tuesday was the “worst day of my business life,” former General Electric vice chairman Bob Wright told CNBC, after shares plunged for the second day in a row.
FDA takes first steps to lower nicotine levels in cigarettes; Consumer sentiment increases to highest level since 2004; U.S. housing starts tumble as multi-family housing segment weakens.
President Trump unveils new sanctions against Russia; U.S. weekly jobless claims total 226,000, meeting economists’ expectations; Import prices rise more than expected in February.
Right to Try bill fails in the House; Appeals court upholds Texas sanctuary city law; US Retail Sales Fall, despite rising wages.
That the US health care system is excessively costly is not news. The controversy involves 3 connected questions: (1) what are the real drivers of high costs, (2) what policies have the highest probability of reducing those costs, and (3) what are the consequences of not reducing excessive health care costs?
In this article for the JAMA Network, Faculty Affiliate Ezekiel Emanuel explores the true cost of health care in America.
Faculty Affiliate Mary-Hunter McDonnell writes for Quartz on Google and its two prominent lawsuits from former employees: a gender-pay lawsuit filed by women who claimed they were paid less than their male counterparts and a lawsuit alleging discrimination against conservative white men.
Her research findings suggest that the companies punished most harshly when they are found liable for discrimination have a high status and reputations for being good employers. What are the implications of this for Google?
A recent paper by Faculty Affiliate Pinar Yildirim explores the increasingly common scenario of working alongside robots.
It suggests that, at the moment at least, there is often a fall in efficiency and productivity in such scenarios because the introduction of automation destabilizes human teams.
“The attraction of machines and robots is the potential increase in efficiency and the reduction in the cost of getting things done,” the research explains. “On the other hand, you have to think about the behavioral reactions of men and women who are now working alongside machines instead of humans.”
There is a rapidly growing market for the use of game-like techniques for motivating employees. Recent studies show growth for so-called gamification software, some of which allows workers to earn points and badges by completing certain tasks or performing well.
Often companies don’t actually lower compensation but push workers to do more for the same pay by using games and game-like incentives.
“Not only did [employees go] above and beyond their work responsibilities,” wrote Faculty Affiliate Kevin Werbach,“but a large number of them described the process as enjoyable and even addicting.”
The state of American infrastructure figures prominently in current national policy discussion, prompted by poor report cards, energized political campaigns, and recent executive initiatives. Severe underfunding of needed infrastructure projects has prompted proposals from both sides of the political aisle, with public-private partnerships (P3s) featuring prominently. This article evaluates and offers perspective on different types of P3s, examining their benefits and costs and the Trump administration’s plans.
Cary Coglianese is the Edward B. Shils Professor of Law and Professor of Political Science at the University of Pennsylvania, where he currently serves as the director of the Penn Program on Regulation and has served as the law school’s Deputy Dean for Academic Affairs. He specializes in the study of regulation and regulatory processes, with an emphasis on the empirical evaluation of alternative regulatory strategies and the role of public participation, negotiation, and business-government relations in policy making.
A co-chair of the American Bar Association’s administrative law section committee on e-government and past co-chair of its committee on rulemaking, he has led a National Science Foundation initiative on e-rulemaking, served on the ABA’s task force on improvingRegulations.Gov, and chaired a task force on transparency and public participation in the regulatory process that offered a blueprint to the Obama Administration on open government. He has served as a consultant to the Administrative Conference of the United States, Environment Canada, the U.S. Department of Transportation, and the U.S. Environmental Protection Agency.
At this year’s World Economic Forum held in Davos, Switzerland, in late January, a financial crisis was one of the key topics among economists and bankers. Although chances are still slim, they said the global economy and financial markets have become more vulnerable as a result of prolonged loose monetary policies. They are particularly concerned financial authorities are unprepared to deal with the next crisis
Faculty Affiliate Mauro Guillen commented on the recent economic changes: “it seems investors are reading the good news on the U.S. and global economies as if they were negative. Stronger growth, declining unemployment and rising wages could be the harbingers of inflation, which in turn might prompt central banks to accelerate interest rate increase, and thus bring the era of low rates to an abrupt end.”
As countries around the world grapple with the gender pay gap, some places in America have come up with a new way to tackle the problem.
Their solution? Bar employers from asking job applicants what they currently earn, so new salary offers are not based on the previous figure.
Faculty Affiliate Peter Cappelli says he thinks the legislation could have other unintended consequences.
For example, if job candidates don’t volunteer salaries during the discussions, firms are likely to assume their pay is lower than it is.
Cappelli says this effect is likely to be especially pronounced for women and other groups that are statistically likely to have lower pay.
“The phrase for this is statistical discrimination,” he says. “Now we’ve got this quirky situation where it’s actually likely to make things worse.”
Walgreens is reportedly in talks to acquire Valley Forge’s AmerisourceBergen. Walgreens already owns 26 percent of Amerisource and may move to take over the rest of the company.
“When firms do not know what to do about the future they tend to circle the wagons by merging,” Faculty Affiliate Mark V. Pauly, Wharton health care management expert, told Philadelphia magazine. “It does not help that much based on evidence, but you have to do something.”
To Pauly, Walgreens’ potential deal with AmerisourceBergen wouldn’t be daring at all, just purely defensive. “This seems like a fairly safe thing for Walgreens to do after buying and closing all those stores from Rite Aid,” he said.
Although cannabis-related businesses have thrived in the localities that have legalized marijuana as a consumer product, the industry has suffered from crippling uncertainty, in the form of limited access to the banking system. The cannabis industry thus has been forced to operate in a cash-intensive “gray market,” which is a problem. An entire industry conducting all of its business in cash cannot be fairly taxed or regulated and, historically, has been associated with lawlessness—everything from security concerns, transportation and currency problems, money laundering, and cash hoarding. This brief reviews and analyzes the issues that surround marijuana banking and offers several policy options for addressing the tension between federal enforcement and state sovereignty as it related to marijuana banking.
The term “intern” is one that has drawn a lot of discussion over the last several years. It is generally associated with someone in college who works during a specific period of time with a company as a way to gain experience. But, over time, companies have started offering “internships” to people just out of college. A few years ago, a court case decided that if someone was doing the work of a regular employee, they couldn’t be called an “intern,” and they had to be paid. Now, the Labor Department has relaxed those rules a bit and, therefore, has allowed the unpaid internship to return. To discuss this change, Knowledge@Wharton Business Radio’s Host Dan Loney interviewed Michael Schmidt, a labor and employment attorney with the firm of Cozen O’Connor, and Ioana Marinescu, an Assistant Professor of Economics, Faculty Affiliate of the Penn Wharton Public Policy Initiative and a Faculty Research Fellow at the National Bureau of Economic Research.
Nuclear energy has the potential to assist nations in tackling climate change and sustain a rapidly growing world population. In the first part of this series on nuclear energy, I analyzed why nuclear energy is superior to other energy sources in achieving this end but also why current market forces prevent its growth. However, even if US legislators decided to pass legislation that aggressively expanded the country’s nuclear infrastructure, there are three primary non-market challenges with current U.S. policy, or lack thereof: a hostile public, the absence of a centralized nuclear waste disposal site, and concerns with proliferation and the imperilment of U.S. national security objectives. In order to responsibly expand nuclear energy capacities and prevent proliferation to hostile states, policy-makers have an obligation to address these issues. Not doing so may bear worse consequences than wantonly enlarging the United States’ atomic sector.
In 2015, Seattle legislators signed a bill to gradually increase the city’s minimum wage to $15 an hour over several years. Businesses with fewer than 500 employees will still have until January of 2024 to deal with the full ramifications of the act. However, businesses that do not provide medical benefits and employ over 500 people were forced to pay their workers $15 dollars an hour starting this past January . Since then, two major studies have been published on the effects of the act, one concluding that it has had a positive effect on economic activity and employment and the other stating that it has made the labor market far too rigid.
Today private prisons house about 126,000 federal and state inmates . Orders issued under the Obama Administration to phase out the use of private prisons are now being reversed under the Trump Administration, which has caused some debates over the efficacy of private prisons to resurface. Chiefly, this reversal has sparked controversy over the economic benefits of private prisons in America, as the most avid dissidents highlight problems with the economic argument for private prisons and even moderate objectors point to inconclusive data as a poor indicator of their advantages.
Justice department threatens to subpoena sanctuary cities in funding battle; Jobless claims under projected figures.
One of the key features of the Dodd-Frank Act is that it imposes specific and costly regulatory requirements on banks that cross the threshold of having more than $10 billion in total assets. Anecdotal accounts have suggested that this threshold has led to increased consolidation in the banking industry. This brief provides new statistical evidence of that phenomenon. Banks that approach the $10 billion threshold are significantly more likely to engage in an acquisition, pay more for that acquisition, and acquire bigger target banks than similar banking institutions did prior to Dodd-Frank. To the extent that policymakers are concerned with further consolidation in the banking industry, these findings should be of interest as they continue to evaluate current regulations and develop new ones, which might include the use of bright line asset thresholds.
Also, U.S. core consumer prices record largest increase in 11 months in December; U.S. holiday retail sales strongest since Great Recession, up 5.5%.
From checking the weather to reading the news, from interacting on social media to shopping for gifts, it is evident that technology plays an integral role in our daily lives. We can attribute the products that we use every day with just a few prominent technology companies. “Tech giants” or even the “Frightful Five,” the collective names given to Amazon, Apple, Facebook, Microsoft, and Google (and by extension, its parent company Alphabet) underscore the idea that these technology companies significantly influence both our daily routines and the political and economic changes in our nation at large .
Although taxing carbon is an idea that enjoys significant support among policymakers and business leaders, new research indicates that carbon taxation can actually cause energy investments to gravitate away from the cleanest energy technologies. This counterintuitive finding reflects two key characteristics of energy markets: the worldwide increase in renewable energy sources whose output is intermittent and variable; and greater market liberalization, which has made the spot driving of electricity more volatile. The intermittency of renewable energy sources requires backup generation, typically from generators using fossil fuels. The dynamics of market liberalization amplify this negative effect of intermittency. Policymakers need to take steps to reduce intermittency by supporting storage technologies or setting monetary incentives to increase renewable generation capacity investment.
Healthcare spending accounts for just under one-fifth of the US economy, amounting to an enormous $3.4 trillion in 2016 . Politicians from both sides of the aisle have tried their hand at passing cost containment measures to slow its growth, which has consistently outpaced GDP growth rates. With the passage of the Affordable Care Act in 2010, the Center for Medicare and Medicaid Services (CMS) attempted to cut costs by reshaping the way providers are paid to manage care. As a result, it began to recognize and reward a new hybrid structuring of providers: Accountable Care Organizations (ACOs). As ACOs become more popular under new payment schemes, it is essential to track their ability to reduce costs and improve quality. The Trump administration’s policy changes stand to shape not only providers’ care coordination, but also the trajectory of the healthcare industry.
Sugar sweetened beverage taxes, commonly referred to as soda taxes, have been on the rise in American municipal governments as a potential policy solution to both a public health crisis and a revenue shortage . However, in cities like Philadelphia where these sugary beverage taxes have been implemented, they have become a target for the scrutiny of residents and economists alike. Governments that have implemented soda taxes commonly cite how the tax revenue and the tax itself could help tackle obesity, but this claim is still subject to debate.
Since Hurricane Maria struck Puerto Rico, the island’s leaders have been asking the federal government for more emergency aid and long-term recovery funds. Resident Commissioner for Puerto Rico Jenniffer Gonzalez-Colon requested, “Congress [approve] an aid package that is commensurate with the level of devastation,” while Congresswoman Madeleine Bordallo of Guam said she will, “Seek a firm commitment that the House provide fair and robust emergency assistance to U.S. territories devastated by natural disasters in any bills considered for the remainder of the Congress.”  The federal government must determine how much assistance is required to adequately respond to a natural disaster of this scale and how to balance the need for short-term relief and long-term recovery.
Since 1976, private citizens have been barred from introducing private lawsuits against foreign nations under the Foreign Sovereign Immunities Act (FSIA). This law has been the basis for United States’ domestic legal engagement with other countries for decades, and has undergone significant revisions since its inception. Actions taken by the legislative branch over the past few decades have drastically changed the original FSIA and introduced new challenges regarding implementation and potential ramifications against the United States in legal systems abroad. This article explores how a recent amendment to the FSIA known as the Justice Against Sponsors of Terror Act (JASTA), as well as prior revisions, represent a significant reduction in the sovereign immunity laid out in FSIA, as well as a public policy and diplomatic challenge for the United States moving forward.
First proposed in 2009, India’s Aadhaar biometric ID system represents a complete overhaul of India’s approach to identification. The Aadhaar ID links your fingerprint and iris to everything from tax filings to bank accounts. Despite criticism relating to privacy concerns, proponents argue that Aadhaar has the potential to propel the Indian economy towards business transparency and fraud reduction.
Over the span of recent decades, the federal legalization of marijuana has been a popular topic of discussion within the political arena. One aspect less frequently introduced is the financial impact legalization has within the banking sector. At the moment, most cannabis companies are unable to take out federal loans or establish any form of credit, since marijuana is federally illegal and therefore federally regulated banks are unable to work directly with marijuana businesses. A few states have legalized the use and distribution, of cannabis, both recreationally and medicinally, but this legal standing is insufficient for distributors to access services provided by national banks. All of this has led to volatility within the marijuana business structure and a business model built in violation of banking standards.
Penn Wharton PPI recently welcomed Jason Post, Director of Public Affairs at Uber Technologies, Inc. to campus for a talk on how modern technology is transforming urban mobility. Post oversees transportation policy and works with elected and appointed officials as well as third-party groups to achieve Uber’s mission to make transportation reliable and efficient. Before his time at Uber, Jason worked in journalism, government and consulting, including service in the Administration of New York City Mayor Michael R. Bloomberg. He also produced the political news program Inside City Hall on the cable news channel NY1. He is a 2001 graduate of Penn’s College of Arts and Sciences and serves as volunteer wish granter for the Make-a-Wish Foundation.
In order to better understand the tax manipulation decision-making process—both legal uses of tax deductions and illegal tax evasion—this brief looks at the impact of gain/loss framing. Analysis of tax data confirms that tax decisions are influenced by “loss aversion.” For instance, taxpayers are more likely to pursue tax reduction activities when they make a loss smaller, as compared to when they make a gain larger. The brief looks at tools that policymakers have at their disposal for both deterring tax evasion and making existing tax incentives maximally effective. The brief discusses instances when such gain/loss framing interventions might be deployed, and provides estimates around the size of the revenue responses they may generate. The author estimates that if tax filers who face losses experienced the lower motivation to manipulate shown by those facing gains, annual tax revenue would increase by $1.4 billion. Even attempts at marginal interventions, though smaller in predicted effects, might be financially worthwhile.
A wave of corporate inversions by U.S. firms over the past two decades has generated substantial debate in academic, business, and policy circles. The core of the debate hinges on a couple of key economic questions: Do U.S. tax laws disadvantage U.S.-domiciled companies relative to their foreign competitors? And, if so, do inversions improve the competitiveness of U.S. multinational firms both abroad and at home? This brief, summarizes both old and new research that views these questions through the lens of corporations’ global effective tax rates (ETRs), and finds that the stronger case seems to be that U.S.-domiciled corporations are often tax-disadvantaged and that they can improve their competitive position by inverting. Additional evidence also suggests that U.S. MNCs can increase their after-tax cash flow by inverting. Inversions indicate that something is fundamentally wrong with the tax system. The brief concludes by discussing two feasible paths forward for reform.
American healthcare has been a recent focus in both politics and the media, with much fanfare around the future of health reform. Woven into these discussions are questions about the rise in national health expenditures – if spending growth is significantly faster than economic growth, it may pose risks for consumers and for the nation as a whole. Here, an overview is provided of some principal drivers of growth in national healthcare expenditures, along with their impacts and policy proposals aimed at management.
As the United States continues to play its role as a leader of the global community, there is one area in which the nation falls far behind its progressive counterparts: paid sick and family leave. Paid sick and family leave is the idea that working men and women should have the ability to earn paid time away from work to care for a new child, ill family member, or themselves, while protecting against discrimination or retaliation for needing or taking leave.
What is gender responsive budgeting? Gender responsive budgeting (GRB), or gender budgeting, refers to the strategy of assessing and/or preparing fiscal budgets through a gendered lens.
Financial “robo advice”—an automated service that ranks or matches consumers to financial products—has gained significant attention in the investment industry and on the Hill, but there has not yet been a consensus on how to regulate these new services. Robo advisors often are on par with and can exceed the standards of human advices, but they don’t fit into the category of fiduciary, and therefore won’t be held to the same regulatory standard that humans advisors are. Nonetheless, they are subject to systemic risks and the potential for abuses that can hurt consumers. Professors Tom Baker and Benedict Dellaert offer a regulatory trajectory to follow as the technology of robo advisors continues to develop and expand.
In this period of increased globalization, the international economy is as relevant as the domestic. So when British citizens voted to seriously disrupt their domestic economy by leaving the European Union, Americans watched with curiosity, wondering what international consequences this break was to spur.
Since the North Atlantic Treaty Organization (NATO) was an institution founded as a counter to Soviet aggression and designed to prevent another world war, its members should invest substantial amounts of GDP into defense. Throughout the 2016 presidential election, then-candidate Donald Trump claimed the other 27 countries in NATO were not paying their fair share of the defense expenses for the international peacekeeping organization.
Uber – the application-based, ride-hailing service with a multi-billion dollar company valuation—is known for its convenience, popularity and financial success. But behind its growing net revenue of over $600 million lurks complaints and formal lawsuits regarding the misclassification of its drivers as “independent contractors” rather than employees that could impact its future financial position and ethical reputation.
For the fourth consecutive year, Penn Wharton PPI is pleased to fund a large cohort of 99 Penn students who are serving as public policy interns in DC. The interns, chosen through a competitive application process, represent undergraduate and graduate programs across six different Penn Schools — Wharton, Arts and Sciences, Law, Social Policy and Practice, Engineering, and Education.
Over 41 million Americans now owe more than $1.2 trillion in outstanding federal student loan debt. Policymakers are considering a number of amendments related to federal student aid programs in the context of the Higher Education Act reauthorization. In addition to providing a snapshot of key data related to student loan debt that all policymakers should consider, this brief discusses recommendations for facilitating repayment and curbing defaults on student loans, including: protecting students from low-performing institutions; encouraging use of forbearance and deferment mechanisms; and strengthening income-driven repayment options.
Since 1978, the National Flood Insurance Program (NFIP) has enlisted private insurers, with their market presence, to sell and service policies under the auspices of the Federal Emergency Management Agency.
In the interest of bringing high-speed broadband access to communities underserved by current Internet service providers, many U.S. cities have initiated municipal broadband projects. Such efforts have received favorable attention from those eager to help close the digital divide. This brief presents a first look at a new, comprehensive empirical analysis of 20 U.S. municipal fiber builds for which financial data is available. The findings show that half of the projects in this study are cash-flow negative, and based on their performance from 2010-2014, 90 percent are unable to generate sufficient cash to recover their project costs within the 30-40 year life expectancy of a municipal fiber build. City leaders considering such projects, as well as state and federal officials interested in supporting them, need to understand the documented costs and risks before encouraging new municipal fiber programs to form.
Consumer protection regulation targets services like payday lenders under the presumption that these services can be predatory and associated with high costs. Yet an increasing number of Americans are utilizing such alternative financial services and joining the ranks of the “unbanked” and “underbanked.” Altering this status quo and promoting greater middle-class stability will require that policymakers foster innovation in the development of high-quality, transparent, and consumer-oriented financial services within the mainstream banking system.
Penn Wharton PPI held its 4th annual Public Policy Case Competition this spring, focusing on the issue of financial inclusion. About 7 percent of American households are “unbanked,” meaning they lack access to a bank account, while another 20 percent are considered “underbanked”—they have a bank account but may supplement it with non-traditional financial services like check cashing or payday loans.
A panel of leading research scholars tackled the challenge of Understanding Student Debt: Moving Toward Evidence-Based Policy Solutions, during a panel discussion co-sponsored by Senators Tim Scott (R-SC) and Bob Casey (D-PA) on April 20.
The Penn Wharton Public Policy Initiative and the OSET Institute announce the release of a new study that provides a comprehensive business analysis of the structure and outlook of the voting machine industry. Given the questions of election integrity that arose during the 2016 election cycle, the study provides some insights into what is needed to innovate the industry which can help improve the security, accuracy, and reliability of the nation’s election machinery.
Using simulations based on a new economic model, this brief empirically examines the pivotal mechanisms of the Affordable Care Act, such as the individual mandate, employer mandate, and premium subsidies, to inform the debate over repealing and replacing the Affordable Care Act. The research suggests that the ACA, if left intact, in the long run significantly reduces the uninsured rate. The simulations also suggest that the employer mandate is not a crucial pillar for the success of the ACA. The analysis indicates it is the premium subsidy, rather than the employer mandate or the individual mandate, that is crucial for the success of the ACA, in terms of expanded coverage. The brief concludes with a look at the key elements of the main legislative proposals Congressional Republicans have offered to replace the ACA, including the American Health Care Act.
This brief examines the tension between the Republican ideological commitment to curbing executive power and the opportunity Republicans now have for Trump to dominate the direction of financial regulatory reform. The discussion will focus on three key policy outcomes that Republicans have sought during the last six years: reforming the Federal Reserve, overhauling the Consumer Financial Protection Bureau, and changing the way in which the nation’s largest financial institutions are designated and regulated.
The next stage in the evolution of the digital economy involves the creation of what can be called the “Internet of the World”—an expanding web of transactions, anticipated today by on-demand platforms such as Uber and Airbnb, that eventually will occur across trillions of networked devices and penetrate every sphere of human activity. This brief looks at the many legal questions raised by these novel services, in particular, at the regulatory classification of on-demand services, as well as the application of antitrust provisions, the imposition of taxes and fees, and the assignment of liability to these new platforms.
Economists and political observers agree state governments defaulting on their debt obligations is a growing concern. How best to aid struggling states, however, is a point of contention. This Issue Brief makes a case against ex post restructuring measures, specifically bankruptcy modeled on Chapter 9 of the U.S. Bankruptcy Code, and in favor of ex ante debt mitigation action. In particular, it introduced tax-credit borrowing (TCB) as a potential commitment device for states that would allow for the creation of super-priority, risk-free debt.
On November 15th, Penn Wharton PPI welcomed Sebastian Mallaby for a discussion of his recently-released book, The Man Who Knew: The Life and Times of Alan Greenspan. Faculty Affiliate Peter Conti-Brown, Assistant Professor of Legal Studies and Business Ethics at Wharton, moderated the conversation.
This brief looks at the costs of implementing the EPA’s Clean Power Plan. Specifically, it examines whether implementing the CPP on a state-by-state basis—that is, with each state meeting its own individual target for emissions reduction by 2030, rather than establishing regional targets—is economically efficient. The economic analysis uses data from electricity-generating firms participating in the Pennsylvania-New Jersey-Maryland (PJM) Interconnection to examine the relative economic efficiency of regional versus state-by-state implementation of the CPP. The research indicates that state-by-state implementation would yield the lowest electricity prices in 2030.
On October 25th, the Penn Wharton Public Policy Initiative welcomed David Rothschild to discuss his research and the science of polling as it relates to the 2016 Presidential Election.
Consumers tend to purchase too little insurance or purchase it too late. Consequently, taxpayers wind up bearing substantial burdens for paying reconstruction costs from extreme events. The 2005 and 2012 hurricane seasons alone cost taxpayers nearly $150 billion. There is much that can be done to better facilitate the role that insurance can play in addressing losses from extreme events, both natural and man-made.
On September 22nd, the Penn Wharton PPI welcomed Sam Vinograd (C’05) for an interactive session reflecting on this month’s meeting of the United Nations General Assembly. Prior to joining the private sector, where she leads policy discussions with public and private stakeholders on clean energy and clean tech projects, Ms. Vinograd held various senior roles within the National Security Council at the White House during the Obama administration.
On September 6th, the Penn Wharton PPI, Penn AEI Executive Council, Penn Government and Politics Association, College Republicans, and the Penn Federalist Society welcomed Arthur C. Brooks, bestselling author, social scientist, and the president of the American Enterprise Institute for a discussion about what we can do as individuals to break through the gridlock of political polarization.
The Penn Wharton Public Policy Initiative is pleased to announce that Samantha Vinograd (C’05) will be our Visiting Fellow for the Fall 2016 semester.
For the third year in a row, Penn Wharton PPI is pleased to offer funding to a large cohort of Penn students who are serving as public policy interns in DC. The students, chosen through a competitive application process, represent both undergraduate and graduate programs in seven different Penn Schools – Wharton, Arts and Sciences, Social Policy and Practice, Gradate School of Education, Nursing, Law, Engineering and Applied Science.
In the wake of the stalled Johnson-Crapo bill, the overarching goal of housing finance reform continues to be the efficient provision of long-term fixed-rate mortgages to credit-worthy borrowers in all markets throughout the business cycle. This Issue Brief analyzes three newly-proposed plans for reforming the U.S. housing finance system: (1) a proposal from Jim Parrot et al. to merge Fannie Mae and Freddie Mac into a new government corporation; (2) Andrew Davidson’s proposal for mutual ownership of the GSEs by mortgage originators; and (3) an opposing plan from Mark Calabria, arguing against securitization altogether and for a return to the regime of originate-and-hold.
While the public debate on immigration reform has been divisive, the tools of economics provide clear lessons for a way forward. The single most important lesson that economics holds for immigration policymakers is that immigration restrictions are costly, because they interfere with the free movement of labor. Most economists believe that the gains to global GDP from greater labor mobility are very large. Beyond the estimated gains to the world economy, the consensus among economists is that, as a whole, U.S. natives gain from immigration in the labor market. While immigration may have an adverse effect on some native wages and employment—particularly for the least skilled workers—the empirical evidence indicates these effects, if existent, are small.
This Issue Brief summarizes events surrounding the current debt crisis in Puerto Rico and presents a two-step plan for restructuring Puerto Rico’s debt and encouraging more effective governance. This plan draws extensively on the previous experiences of debt crises in municipalities on the U.S. mainland. Step one entails the creation of a financial control board (FCB) for Puerto Rico, monitored by the U.S. federal government but involving significant Puerto Rican representation. Step two would be for Congress either to craft a restructuring framework applicable to all of America’s territories, or to extend the existing bankruptcy laws in Chapter 9 of the Bankruptcy Code (with modifications) to Puerto Rico and its municipalities.
On March 3rd, Penn Wharton Public Policy Initiative collaborated with the Kleinman Center for Energy Policy to host Marvin Odum, President of Shell Oil Company, for a lively discussion about the energy industry in today’s world and the push towards renewable resources for tomorrow. Odum discussed the challenges of finding solutions to our energy problem in the face of a growing population, the energy transition in place now, and what all stakeholders can do to ensure feasible solutions for energy moving forward.
Are FDA premarket trials on new drugs and medical devices excessive and do they inhibit consumer access to new and much-needed technologies? Or may they actually be insufficient and expose consumers to too much risk? To address this question, the new research described here compares the regulatory approaches of the U.S. and the European Union for second and third generation coronary stents. The research supports the FDA’s argument that reductions in their standards for device approval would reduce consumer welfare. Nevertheless, the research also suggests that in some circumstances, FDA reform proposals advocating for more relaxed premarket requirements but enhanced post-market surveillance would yield considerable welfare gains.
Looking for funding for your summer internship? Penn Wharton Public Policy Initiative (PPI) offers funding, on a competitive basis, to students who accept an offer for a public policy summer internship at a government entity or non-profit policy research organization in Washington, DC, that otherwise would be unpaid or come only with modest compensation. All undergraduate and graduate students enrolled in any of Penn’s schools are eligible to apply for funding from Penn Wharton PPI.
“I have gained an understanding of how the research process works. I have also learned to think of monetary policy as far reaching and much more complex than most of the public believes.”
Sean Egan is currently a sophomore in Wharton and has plans to pursue Business Economics and Public Policy—fields that he believes have the most potential for helping American citizens.
As someone whose definition of success means having a positive impact on the people around him, Sean has been using his free time to work towards charitable goals since high school. He helped found “Hearing Our Heroes,” a student-led organization whose mission is to “assist local veterans, thank them for their service, and in doing so remind our members and others how much our brave veterans sacrificed to protect the blessings of liberty.” While he has more of an advisory role now that he’s in college, Sean nevertheless is planning on Hearing Our Heroes events for the Philadelphia area.
In his time at Penn, Sean maintains his goals of going into public policy by engaging in policy-related activities on campus. He is an active member of College Republicans and also a “Fiscal and Monetary Policy” contributor for Wonk Tank. Recently, he has also been assisting in research for Professor Peter Conti-Brown.
“[After working with Professor Conti-Brown], I have gained an understanding of how the research process works,” said Sean. “I have also learned to think of monetary policy as far reaching and much more complex than most of the public believes.”
While Sean originally had ambitions to work in communications within the White House, his recent experiences at Penn has led him to consider focusing on economic policy implementation or research instead. “The real goal is to make an impact on an administration that I believe can help our country,” he explained.
In terms of public figures he respects, Sean mentioned Speaker Paul Ryan and Congressman Vito Fossella. He explained how he admired that Speaker Ryan understood the importance “to have beliefs and stand by them, but at the end of the day compromise is necessary and ultimately good.” Sean also praised Congressman Vito for embracing essential values as a public official.
“I first understood what it meant to be an elected official [from Congressman Vito],” said Sean. “I saw the value he put on getting to know his constituents and their needs, and to never forget that you work for the people. An elected official is supposed to serve others, not themselves.”
In my opinion, business and public policy are the two things that truly affect every single person in the world, regardless of whether they want to admit it or not. Being able to critically analyze how the two relate and how the two differ can be nothing but beneficial.
Currently a sophomore at the Wharton School, Megha Agarwal has established interests in both business and public policy. Her interest in the latter has its roots in her time serving on her hometown’s city council in Los Altos, California. At the time, she was just trying to gain exposure to different kinds of activities, but she says that her time on city council significantly shaped how she saw regular day-to-day activities.
“My time on Los Altos’ City Council definitely led me to realize that even the smallest decision made by the smallest group of people can have a wide and long-lasting affect,” Megha said. “And as citizens, or even just inhabitants of a particular city, we have some sort of civic responsibility to maintain involvement with local politics and happenings.”
That being said, when she started her college career at Wharton, Megha looked into a minor in American Public Policy or Political Science as a way to maintain public policy in her studies. When she heard about the Public Policy Research Scholars (PPRS) program offered by Penn Wharton Public Policy Initiative, however, she was drawn to its flexibility and sense of community almost immediately.
“I loved the idea of being able to create or choose your own public policy track and being able to join a tight-knit community of like-minded students. The program as a whole seemed like an opportunity and academic experience that could not be presented with a simple major or minor,” remarked Megha.
In pursuit of her interests in business and public policy, Megha also worked as a White House intern in the Office of Management and Administration last summer. While she went into her internship expecting it to be very “hierarchal,” what surprised her was that even though she was one of the youngest members of the team, not only were her opinions still taken into consideration for memos and reports but she was even given the opportunity to pioneer her own personal projects.
“Like with any other place, you have to prove that you are dedicated, trustworthy, and hardworking, but after you are able to create that initial foundation of mutual respect, the White House has no problem giving you the same level of work and responsibility that a full time staffer would have,” explained Megha.
Her time at the White House during the Obama administration also gave her a unique opportunity to observe the federal government’s development of an online social media presence. While Megha herself used to write regularly on her own blog, she is less interested in the social media sphere than in the past. Nevertheless, she finds the Obama administration’s engagement with social media to be a refreshing move that has “added an air of youth and approachability to a previously lofty and removed institution.”
When speaking about her future at Penn, Megha says that most of her interests do fall in either business or public policy. While she still tries to be involved in a variety of activities, she does hope that “at the end of the day, [her] life at Penn and even life after Penn can be well-defined by both business and policy.”
“In my opinion, business and public policy are the two things that truly affect every single person in the world, regardless of whether they want to admit it or not,” said Megha. “So I think being able to critically analyze how the two relate and how the two differ can be nothing but beneficial.”
This brief offers a 5-year retrospective on Dodd-Frank, pointing out aspects of the legislation that would benefit from correction or amendment. Dodd-Frank has yielded several key surprises—in particular, the problematic extent to which the Federal Reserve has become the primary regulator of the financial industry. The author offers several recommendations including: clarification of the rules by which strategically important financial institutions (SIFIs) are identified; overhauling the incentives offered to banks; instituting bankruptcy reforms that would discourage government bailouts; and easing regulatory burdens on smaller banks that are disproportionately burdened by the SIFI designation process.
This Brief focuses on ways in which private firms are adopting tools that mirror public law instruments—such as internal carbon fees (similar to a public carbon tax) and private cap-and-trade schemes (like public emissions trading schemes)—to reduce greenhouse gas emissions and address climate change. These private case studies suggest that significant progress in reducing emissions can come from embedding emissions reduction programs into core business strategy. Moreover, these case studies indicate that climate change, as a global issue, requires public regulators to recognize the potential contributions of global multinational firms.
With the Social Security Disability Insurance (SSDI) trust fund on the verge of depletion, Congress must enact structural reforms to the SSDI program that address and counter the rapid growth in SSDI enrollments in recent years. This brief details a work incentive program for SSDI beneficiaries, called the Generalized Benefit Offset (GBO), which would help get SSDI recipients back into the labor force, enhancing their own economic welfare while increasing economic output on a societal level.
Perceptions of how illegal immigration affects native residents have shaped policies, but these policies are likely ineffective both in general and in their specific focuses, like in lowering crime and improving native employment. Policymakers should consider objectively the effects of past policies such as IRCA and 287(g), before instituting new, non-data driven mandates and legislation in response to public demand.
Since the beginning of the global economic crisis, investors have flocked to bond funds, and especially corporate bond funds, viewing them as the “safest” vehicles for their capital. However, bond funds are subject to fragilities originating from the first-mover advantage problem: when investors cash out, the cost of compensating them amplifies the funds’ price decline, making it costlier for other investors to remain. Moreover, three other conditions—general market illiquidity, lower fund liquidity, and the prevalence of retail investors—accentuate the financial fragility of corporate bond funds. Academic research shows that when corporate bond fund managers have to trade illiquid corporate bonds after investors redeem shares en masse, the subsequent demand shock in the secondary bond market results predictably in significant negative effects to the real economy. This brief looks at the fragility of corporate bond funds and offers policy options to combat these conditions and mitigate their wider effects.
The 113th Congress extended the research and development (R&D) tax credit through the end of 2014 by passing the Tax Increase Prevention Act (H.R. 5771), which President Obama signed into law on December 19, 2014. That the fate of this credit in 2015 remains unknown is not surprising. This brief explores the history, logistics, and policy implications of the temporary R&D tax credit, and offers recommendations for additional research that would help determine the merit of making the credit permanent. Using new, restricted-access IRS data and an instrumental variables strategy, the brief offers an unbiased estimation of the effectiveness of the R&D tax credit, showing that corporate research intensity—the ratio of R&D spending to sales—is indeed highly sensitive to the tax subsidy rate. When it gets cheaper for firms to spend on qualified R&D, they actually do spend more, as policymakers hope.
Over the next five years, the effects of the ACA on employer-sponsored insurance will be modest. In the longer run, there is greater potential for disruption, depending on how firms respond to the subsidies available on the exchanges for low-wage workers. In all, only about 15% of the workforce likely will be affected. The impacts of the ACA on firms will vary widely based on three main factors: 1) the size of the firm, 2) the average compensation within the firm, and 3) the degree to which wages within the firm are homogenous or heterogeneous. Keeping in mind that employees pay for all their health insurance, group insurance is not intrinsically superior to private exchanges, and cost trumps choice for consumers, firms will choose the option that maximizes benefits to their workers, takes advantage of the best available subsidies while avoiding tax penalties, and results in the lowest administrative costs. Making all low-wage workers eligible for the same subsidies, whether they acquire coverage on the exchanges or in group plans, would be reasonable and involve less distortions.
Momentum seemed to be escalating in early 2014 for the passage of a comprehensive reform package of the housing finance system in the U.S., but that was not to be, as neither political party fully supported its passage, derailing the progress made over the previous few years.
While consensus around the primary features of reform has grown, new research that questions these assumptions needs to be addressed and the inertia keeping the country mired in the current, uncertain system needs to be overcome. In this brief, we will discuss the progress made thus far en route to reform, analyze the disparate elements of the leading proposals, and incorporate new findings that will shape the additional research that must be done before policymakers can agree on the best path forward.
Soon after the launch of HealthCare.gov, the exchange websites that formed the vanguard of the Affordable Care Act quickly became notorious for numerous bugs, crashes, and painfully slow loading times. Over a year later, the portals have reached a sufficient level of stability and core functionality on the back end. But what about the front end?
When the state and federal health insurance exchanges were introduced in 2013, much attention was paid to the logistics of their launch. Nearly a year later, policymakers should now be looking at a different question: how can we collect and use data from the exchanges to understand how consumers think about insurance choice, so as to make the exchanges function better?
With regard to equity crowdfunding, too many policymakers and regulators are focusing their attention on the “funding” piece of crowdfunding, overlooking the fact that the true revolutionary power of crowdfunding lies instead in the crowd.
The Terrorism Risk Insurance Act (TRIA) is set to expire at the end of 2014 and is currently under debate in Congress. Renewing TRIA may limit the amount of disaster relief the federal government would contribute after a terrorist attack, but the different options under which TRIA might be renewed carry implications for how losses from any attack would be spread between commercial policyholders, insurers, and taxpayers.
In order for the U.S. to remain competitive in the 21st-century economy, more individuals are going to need to earn workforce credentials and college degrees. At the same time, however, state governments have been facing financial challenges wrought by chronic structural budget deficits and rising Medicaid expenses, translating into reduced support for higher education. Instead, families now are hard-pressed to shoulder more of the burden of paying for higher education. The current system for financing higher education is broken and needs to be fixed.
The Affordable Care Act calls for significant cuts in reimbursements to insurers providing Medicare Advantage (MA) coverage, which has been the most popular alternative to traditional fee-for-service Medicare. Opponents of these cuts argue that they carry serious negative repercussions for seniors, and have lobbied successfully to force their postponement. But research coming out of the Wharton School suggests that cuts to MA reimbursements actually are unlikely to harm consumer welfare.
It’s a tough time to be a renter. According to data from the U.S. Census, half of all renters, and 83 percent of renters with incomes under $20,000, paid more than 30 percent of their incomes in rent in 2011. One commonly-proposed policy solution to declining rent affordability is the construction and preservation of low-income housing. But this will only ameliorate the situation temporarily.
Although the military’s operations are largely exempt from environmental laws and regulations when those laws conflict with its national security mission, the military has important incentives to reduce its reliance on fossil fuels and combat climate change. If nurtured properly, the military’s extensive undertaking to improve its sustainable energy use and reduce demand for fossil-fuel-derived energy has the potential to become one important tool in the environmental regulatory toolkit.
The success of the new health insurance exchanges will depend greatly on the quality of the enrollment decisions that consumers make. Choosing the wrong insurance product can translate into billions of dollars in wasteful spending at the national level. Faculty at the University of Pennsylvania have contributed to several studies outlining important ways that the exchanges can be made to work better for consumers—and for the larger economy.
The United States has entered a new era of catastrophes, of which floods have been the most devastating. Through its 2012 reform (Biggert-Waters Act), the 45-year old federally-run National Flood Insurance Program has an opportunity to highlight the role that risk-based premiums can play in encouraging individuals to undertake loss reduction measures. But the implementation of this reform is now being challenged due to concerns that residents cannot afford risk-based premiums. The authors of this brief propose that this can be overcome by successfully combining risk-based pricing, required insurance, means-tested insurance vouchers, and mitigation loans, so that individuals reduce their flood risk and are financially protected against future disaster losses, thus reducing the need for taxpayer money for disaster relief in the future.
The Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) significantly changed tax policy by cutting long-term capital gains tax rates and taxing dividend income at the same rates as long-term capital gains. Following the reduction in the tax disadvantage of dividends, investors gravitated toward dividend-paying investments—especially high-income investors who previously had faced the highest tax rates on dividends.
The behavior of investors before and after the passage of JGTRRA suggests that they divide into “clienteles” based on dividend payouts when the tax disadvantage of dividends varies across investors. Policymakers therefore need to build a proper appreciation of investor behavior, particularly among affluent households, into their thinking about any tax reform proposal affecting capital income. If dividend clientele effects are ignored, estimates of the revenue that can generated by changes in capital tax rates will be off-base.
Currently, the rules of fuel taxation in the U.S., like the U.S. tax code more generally, is complex and riddled with inconsistencies. The tax rate applied to carbon-based fuels varies widely depending on the type of fuel, purpose of consumption, and identity of the user. These inconsistencies only invite tax evasion and result in fuel tax revenues that fall short of even covering the costs associated with fuel consumption.
The Dodd-Frank Act requires that the Federal Reserve conduct an annual stress test on large bank holding companies (BHCs) to ensure they have sufficient capital to withstand losses from adverse economic conditions. Eighteen BHCs were subjected to a stress test this year.
The “shale revolution,” spurred by the development of hydraulic fracturing, brings some of the best news to U.S. manufacturing employment in recent years, and gives the U.S. the potential to become a major energy exporter. And the potential of “fracking” to produce negative health and environmental effects is a grave concern.
The Dodd-Frank Act does not provide sufficient protection against another major financial crisis. A better regulatory system would promote financial stability by correcting the key market failures that lead to excessive risk taking by Strategically Important Financial Institutions (SIFIs). Regulatory policies centered on contingent capital would offer a clearer and purer market signal when a SIFI is performing poorly and trigger steps to mitigate the financial risks.
Increasingly, and particularly in response to the recent economic downturn, policy makers have pointed to regulation as a “job killer” and have called for regulatory reform to promote job creation and economic recovery. The empirical research, although limited, reveals a more complex relationship between regulation and jobs, and fails to support the notion that regulation is either a major job killer or a significant job creator. U.S. policy makers should not expect that the nation’s economic woes can be solved by reforming the regulatory process.
As U.S. legislators struggle to balance the fiscal budget, tax reform and business income tax, often emerges at the forefront of the discussion. Not all business income is taxed the same, creating great challenges in the design of new tax policy. The implications arising from the different ways in which corporate and non-corporate entities are taxed needs to be understood in order to anticipate how changes in tax policy could affect businesses and their tax obligations.
Mike Pompeo replaces Rex Tillerson as Trump’s Secretary of State; U.S. consumer prices rose 0.2% in February, matching economists’ expectations; U.S. Small-Business optimism rises to highest level since 1983.
Right to Try bill up in the House Tuesday; Senate to vote Monday on Dodd-Frank rollback; Inflation expectations rise to highest levels in a year.
Philadelphia officials are adding their voices to a bipartisan chorus of vexed state and city officials across the nation lambasting President Donald J. Trump’s $200 billion infrastructure spending proposal.
Trump says the plan will leverage an additional $1.3 trillion in state, local, and private investment, but experts say is little more than a legislative Big Dig — a loud, confusing mess. “It’s just bizarre. It’s a complete alternative reality,” says Faculty Affiliate Gilles Duranton. “These are just numbers that are being pulled out of thin air.”
US tariff announcement prompts trade war fears, scramble for exemptions; Trump administration blocks Idaho efforts to undermine Obamacare; Economy added 313,000 jobs in February.
On WNYC’s “The Takeaway,” Faculty Affiliate Vincent Reina weighed in on Carson’s leadership and the questions the secretary faces from lack of policy reforms to the purchase of a $31,000 dining set for his office.
House votes to loosen coal-fired plant air pollution standards; Layoffs down, but unemployment rebounds; Oil falls on US supply.
South Dakota sales tax case rises to the US Supreme Court; US juice and peanut butter face retaliatory EU tax; US Trade deficit over 9-year high; Private sector jobs continue to grow, beating estimates.
Clash on bipartisan bank regulation roll back bill; North Korea promises to stop missile tests if US holds talks; February’s consumer sentiment inched down slightly at the end of this month, but still beat economists’ estimates.
Marijuana is a booming business in the United States, but its growth is hampered by the paradox between state and federal policies toward the drug.
Faculty Affiliate Peter Conti-Brown explains how federal banking regulations force this cash-based enterprise to operate in a “gray market.”
Why don’t we mandate the flu vaccination? This is a question that Faculty Affiliate Ezekiel Emanuel poses in his New York Times Op-Ed.
“Starting next year, we should provide the vaccine free in all schools, preschools and day care centers — and require that all children under 18 get it before Thanksgiving.
What are we waiting for? Must more children die unnecessarily?”
Faculty Affiliate Ioana Marinescu discusses her new research findings on government aid to individuals and employment figures in a recent radio interview with KJZZ.
She looked at employment in Alaska and compared it to employment in states that were most similar to Alaska, and found that on average people did not stop working when they received a government check, effectively “free money”, from the state’s oil fund.
Trump’s tariffs spark NAFTA, trade war concerns; Trump approves Arkansas Medicaid work requirements; Activity in the US services sector of the economy slipped a bit in February, largely on limited employment growth.
GOP considers budget maneuver to help pay for additional ObamaCare healthcare funding; U.S. weekly jobless claims drop to lowest level since 1969; U.S. consumer inflation increases in January.
Poor sections of Kensington/Allegheny, the Southwest, and North Philly experienced the most significant decrease in crime when the conditions of lots improved, said coauthor John MacDonald, a University of Pennsylvania professor of criminology and sociology.
Macdonald said the findings carry powerful implications for Philly and other cities struggling with abandonment and crime. The research quantifies the public health and safety payoff that comes when blighted lots are cleaned up.
Faculty Affiliate Cary Coglianese discusses why state and local governments must consider the potential legal risks of their climate change policies.
What is Ajit Pai’s strategy at the FCC? Faculty Affiliate Kevin Werbach, a former FCC staffer, says “he’s going through, pretty systematically, to reverse rules put in place during the Obama administration.”
Dorothy Roberts, an acclaimed scholar of race, gender and the law, joined the University of Pennsylvania as its 14th Penn Integrates Knowledge Professor with a joint appointment in the Department of Sociology and the Law School where she also holds the inaugural Raymond Pace and Sadie Tanner Mosell Alexander chair.
Her pathbreaking work in law and public policy focuses on urgent contemporary issues in health, social justice, and bioethics, especially as they impact the lives of women, children and African-Americans. Her major books include Fatal Invention: How Science, Politics, and Big Business Re-create Race in the Twenty-first Century (New Press, 2011); Shattered Bonds: The Color of Child Welfare (Basic Books, 2002), and Killing the Black Body: Race, Reproduction, and the Meaning of Liberty (Pantheon, 1997).
Alex Rees-Jones is an Assistant Professor in the Operations, Information, and Decisions Department at the Wharton School of the University of Pennsylvania. His research is focused on integrating psychological biases into economic policy analysis, particularly in the contexts of taxation and market design.
Professor Rees-Jones conducted his studies at Cornell University, where he received a PhD in Economics and a bachelor’s degree in Economics and Mathematics. Prior to coming to Wharton, he worked as a postdoctoral fellow at the National Bureau of Economic Research (NBER). He remains a faculty research fellow at NBER and is a senior fellow at the University of Pennsylvania’s Leonard Davis Institute of Health Economics.
Adam Grant is Wharton’s youngest full professor and top-rated teacher. He is the author of Give and Take, a New York Times and Wall Street Journal bestselling book that is being translated into more than two dozen languages and has been named one of the best books of 2013 by Amazon, Apple, the Financial Times, and the Wall Street Journal– as well as one Oprah’s riveting reads, Fortune’s five must-read business books, Harvard Business Review’s ideas that shaped management in 2013, Forbes’ most dynamic social innovation initiatives of 2013, and the Washington Post’s books every leader should read. Malcolm Gladwell recently identified Adam as one of his favorite social science writers, calling his work “brilliant.”
Mary-Hunter McDonnell is an Assistant Professor in the Management Department at the Wharton School. She studies the political interactions between corporations and their myriad stakeholders, as well as how these interactions shape corporate social activity and non-market strategy. Her work also explores the mechanisms that stakeholders use to enforce behavioral expectations for corporations and to punish corporate transgressions. Her recent work appears in the American Sociological Review, Administrative Science Quarterly, the Academy of Management Journal, Organization Science, Psychological Science, and the Journal of Personality and Social Psychology. She holds a J.D. from Harvard Law School and a Ph.D. in management and organizations from Northwestern University’s Kellogg School of Management.
In her dissertation, “Moving Targets: Dynamic Interaction in Market Contention,” McDonnell investigated how social movements affect corporate strategy through contentious tactics like boycotts, protest, and negative media campaigns. Her research has been published in several peer-reviewed outlets, including Administrative Science Quarterly, Psychological Science, Strategic Organization, and the Academy of Management Best Paper Proceedings. Her work has also been covered in several popular media outlets, including The Financial Times, The Economist, and Wired. She has taught courses on business law, corporate governance, and leadership and influence. McDonnell’s professional experience includes work at Mayer Brown LLP, the Office of the President of the Supreme Court of Thailand, and the United States Senate Foreign Relations Committee.
Governor Scott Walker signs Obamacare stabilization bill; House passes controversial anti-online sex trafficking bill; US economic growth revised down.
Robert P. Inman is the Richard King Mellon Professor of Finance and Economics at the Wharton School of the University of Pennsylvania. He received is undergraduate and graduate training in economics at Harvard University. In addition to his appointment as a Professor at the Wharton School, he currently serves as a Research Associate of the National Bureau of Economic Research, Cambridge, MA. He is an Associate Editor of the professional journal Regional Science and Urban Economics. He is the editor of three books, The Economics of Public Services (Macmillan Publishing), Managing the Service Economy (Cambridge University Press), and Making Cities Work: Prospects and Policies for Urban America (Princeton University Press). His research focuses on the design and impact of fiscal policies with an emphasis on fiscal federalism.
Professor Gomes expertise is in the areas of macroeconomics and financial markets. His recent research covers the determinants of the corporate investment and financing decisions of firms and the links to movements in financial markets, and to monetary and fiscal policies. He has also examined the role of financial leverage in determining the cost of capital, the causes of performance variation across asset classes, and the quantitative importance of financial market imperfections on corporate decisions and economic cycles.
Republican senators say that immigration deal likely to be incorporated into funding bill; Consumer confidence increases to 130.8 in February, the highest level since 2000; U.S. core capital goods orders fall while goods trade deficit widens.
Peter Conti-Brown studies central banking, financial regulation, and public finance, with a particular focus on the law, history, politics, and economics of central banking at the Federal Reserve. He is author of the book The Power and Independence of the Federal Reserve, forthcoming from Princeton University Press. His articles have appeared in the Yale Journal on Regulation and the Stanford, UCLA, and Washington University Law Reviews, among other journals. He is also the editor, with David Skeel, of the book When States Go Broke: Origins, Context, and Solutions for the American States in Fiscal Crisis, published by Cambridge University Press, and editor, with Rosa Lastra, of the Research Handbook on Central Banking, under contract with Edward Elgar Publishing. He has been quoted in print and online articles published by The Atlantic, The Economist, The New York Times, and Reuters, and has appeared on C-SPAN and National Public Radio. He has testified before the US Senate Banking Committee on reforming the Federal Reserve.
Manhattan appeals court finds Civil Rights Act covers sexual orientation; Supreme Court refuses to hear DACA challenge; Sales of new US single family homes fall again in January.
Bipartisan group of governors reveals new health reform proposal; Global trade flows rise at the quickest pace since 2011; Americas’ economic expectations reach second-highest level since 2002.
Trump signals a shift on gun control; U.S. jobless claims near 45-year low as economic outlook brightens; Leading indicators beat expectations and post third straight month of gains in January.
Faculty Affiliates Mark V. Pauly and Kevin Volpp write about Trump’s detrimental impact on Medicare in their Op-Ed for Marketplace.
“President Trump has proposed some modest steps to slow the apparently inexorable growth in Medicare entitlement spending, breaking with his campaign promise to leave alone government-funded programs for seniors.
Although there is often little correlation between presidential budget proposals and budgets eventually approved by Congress, the administration’s budget, which calls for reducing Medicare spending by about $270 billion over 10 years, may start the conversation about what to do to slow growth in Medicare spending.
While cuts in provider payments in some areas will be significant, the administration has left alone the harder questions of whether we can afford to provide generous Medicare benefits to all seniors and to continue to make coverage decisions largely without considering cost.”
Congress has decreed that people should have more time to pay back their 401(k) loans if they lose or leave their jobs. That extension isn’t enough to make 401(k) loans safe, though. You’re still risking your retirement security every time you take money out of your plan.
About 40% of 401(k) savers borrow from their plans in a given five-year period, and 90% of the loans are paid back, according to Faculty Affiliate Olivia S. Mitchell.
She is concerned that the longer grace period could lure more people into a false sense of security, leading to more loans - and more defaults. Making loans more attractive “is not the approach you want if your primary goal is retirement security,” Mitchell says.
Trump administration opens access to insurance outside Obamacare; Final TPP deal leaves out US rules; Business leaders confident in economy, but worried about the skills gap; Oil falls on US stockpiles.
Faculty Affiliate David Zaring writes an Op-Ed for the Regulatory Review on deregulation in the Trump Administration:
Congress’s use of the Congressional Review Act (CRA) to reverse a panoply of Obama Administration rules has been the most important way it has pursued deregulation in the first year of the Trump Administration. But the effort to keep using it to deregulate—which is ongoing—would really take the statute beyond anywhere it has been used before.
Are large corporate employers suppressing wages? A new paper co-authored by Faculty Affiliate Ioana Marinescu analyzes data from the website CareerBuilder.com, breaking down job postings by commuting zone and occupation. She finds that for occupations that have fewer employers posting on the website within a commuting zone, wages are lower than for occupations where lots of companies are looking for workers.
“It’s very clear that things are getting worse now than they have been in the past,” said Faculty Affiliate Howard Kunreuther, Wharton professor of operations, information and decisions and co-director of the Wharton Risk Management and Decision Processes Center. “Particularly in Houston with respect to Hurricane Harvey, a lot of the losses from these disasters are now coming from urban flooding and things that had never been on the agenda before.”
As Microsoft undergoes an ongoing gender discrimination lawsuit, Faculty Affiliate Peter Cappelli explains why HR and employee issues may conflict.
Sexual harassment cases can be especially tricky, as HR is responsible for investigating a behavior whose legal definition often doesn’t match its conventional one. “Part of the problem is what many people believe counts as sexual harassment is not the legal definition of sexual harassment,” says Cappelli, director of Wharton’s Center for Human Resources. A YouGov poll in November found that 17% of Americans ages 18–29 felt that a man asking a woman out for a drink could be an instance of sexual harassment. Legal precedent, meanwhile, tends to define sexual harassment as occurring either when a supervisor requests sex in exchange for a subordinate being promoted or not being fired, or when an employee is subject to behavior of a sexual nature that’s so pervasive it creates a hostile work environment.
A lack of competition among employers gives businesses outsize power over workers, including the ability to tamp down on pay.
In a new paper by Faculty Affiliate Ioana Marinescu, she argues that, across different cities and different fields, hiring is concentrated among a relatively small number of businesses, which may have given managers the ability to keep wages lower than if there were more companies vying for talent.
This could have important implications for how we think about antitrust, unions, and the minimum wage.
Results of a new study conducted by Faculty Affiliate Ioana Marinescu show that wages are actually higher in places where the concentration of employers is lower, even when correcting for the health of the local economy.
So the large companies in those labor markets are exercising a kind of monopoly power, except instead of using that power to raise prices on their products or services for consumers, they’re lowering wages for employees who have few other places to work.
Marinescu explains that the same thing happens in healthcare, when insurance companies say they’ll lower prices by squeezing doctors if allowed to get bigger through acquisitions.
“The argument for the merger would be: thanks to the merger, they were going to be able to get lower prices from medical providers, and that’s why the merger would benefit consumers,” she says. “It creates anti-competitive pressure in the labor market.”
As industries get more concentrated, workers have fewer employment options—and less leverage to get a raise.
A paper co-authored by Faculty Affiliate Ioana Marinescu looked at job vacancies posted on CareerBuilder, the largest online jobs board in the United States, between 2010 and 2013.
She found that most labor markets in this country are highly concentrated, with very few potential employers in most areas for workers to choose from, and that this holds down the level of worker pay.
Trump administration expands access to health insurance plans not meeting ObamaCare requirements; Trump supports effort to improve gun background checks; Federal Chairman Powell taps two senior advisers.
Consolidation isn’t only a consumer problem - it may also reduce competition for workers, especially outside big cities, holding down wages. Faculty Affiliate Ioana Marinescu’s work explores more in this New York Times article.
Government figures show that after Amazon opens a storage depot, local wages for warehouse workers fall by an average of 3%. In places where Amazon operates, such workers earn about 10% less than similar workers employed elsewhere.
Findings from a paper by Faculty Affiliate Ioana Marinescu show that a relatively small number of employers account for a large share of job opportunities in many American communities. In places where such labour-market concentration is highest, wages tend to be lower. These findings suggest that if Amazon is the only major employer in the cities and towns where it operates, the company can offer wages that are well below those of its competitors.
This competition, open to all undergraduate and graduate students across the University of Pennsylvania, is intended to foster discussion and collaborative research on key public policy issues. One team will win the grand prize of $5,000. Two teams will earn honorable mention awards of $2,000 each. (Registration is now closed.)
Senate votes down both immigration proposals; Department of Energy must implement Obama rules; Consumer sentiment beats economists’ estimates.
Trump says he supports 25 cent gas tax increase to pay for infrastructure; House votes to add ADA lawsuit requirements; Home builder confidence steady.
Bipartisan Senate group has reached DACA deal; Consumer Price Index jumps, stoking inflation fears.
Trump administration faces Medicaid lifetime limit question; President Trump met with lawmakers on trade, with a particular focus on metals, after a report on metal imports was submitted to the White House last month; US budget gap widens.
President Trump unveils $1.5 trillion infrastructure plan; Trump FY 2019 budget calls for 2% reduction in discretionary spending after 2019.
Congress reaches budget deal to raise spending and reopen government; White House unveils proposals aimed at curbing high drug prices; Wholesale inventories increase 0.4% in December compared to estimate of 0.2% gain.
“People who buy this morning a year from now are going to say, ‘OK, I think I’ve got a good price,’” said Faculty Affiliate Jeremy Siegel on CNBC as he discussed the recent tumble of market prices this week.
Faculty Affiliate Professor Jeremy Siegel analyzes the massive sell-off in the stock market that has captured global markets this week. He also discusses where the market can go after the Dow suffers a drop of more than 600 points.
President Donald Trump recently claimed that “Instead of two for one, we have cut 22 burdensome regulations for everyone new rule.”
However, many of the actions he has taken are not actually deregulatory but routine and administrative, according to Faculty Affiliate Cary Coglianese.
When Coglianese took a look at the federal regulatory agenda, released Dec. 14, 2017, he found 62 deregulatory actions. (Not all of Trump’s 67 deregulatory actions were included in the review.)
Coglianese found the Office of Management and Budget deemed 8 percent of these economically significant (exceeding $100 million in costs); 27 percent significant enough to warrant review, but not due to economic impacts; and two-thirds non-significant, administrative, or routine.
Digital tokens have slid more than 50 percent in value from their peaks in early January, with steep drops on Monday pushing the value of Bitcoin specifically below $7,000.
Amidst these dramatic market moves, other problems with Bitcoin’s security and lack of regulation have arisen.
“Cryptocurrencies are almost a perfect vehicle for scams,” said Faculty Affiliate Kevin Werbach. “The combination of credulous buyers and low barriers for scammers were bound to lead to a high level of fraud, if and when the money involved got large. The fact that the money got huge almost overnight, before there were good regulatory or even self-regulatory models in place, made the problem acute.”
Faculty Affiliate Christina Roberto on why a recently proposed Philadelphia city council bill warning customers of high sodium menu items is critical for public health.
House passes another stopgap funding bill; Senate committee advances President Trumps EPA Deputy Nominee; Higher interest rates stall mortgage applications.
Senate leaders close to making a two-year budget deal to avoid government shutdown; House bill cuts ObamaCare public health fund by $2.85 billion and reallocates it; U.S. trade deficit reaches a nine-year high as import levels soar.
Senators release bipartisan immigration plan; Whitehouse Budget Director halts Equifax probe; Pay rises in US.
GOP looking at vote to fund government through March 23; U.S. added 200,000 jobs in January, and unemployment rate remains at 4.1%; U.S. consumer sentiment exceeds estimates on jobs and income; U.S. factory orders up 1.7% in December, compared to 1.5% expected increase.
This time, what’s driving the market is a shift in favor of owning rather than renting coming from the largest homebuying generation since the baby boomers: millennials.
“This is market, market and market … There’s no government incentive program in sight that is having this effect,” said Faculty Affiliate Susan Wachter, a professor of real estate and finance at the Wharton School. “This is back to basics.”
The income from Philadelphia’s new soda tax for this calendar year total falls more than $13 million shy of the Kenney Administration’s fiscal year projection of $92 million.
However, Faculty Affiliate Robert Inman deems the $78.8 million in total revenue a sign of the tax’s success. Inman said that any new tax – let alone a sugary drinks tax that has little historical data to build an estimate off of – would be considered a success if it hit within “85 to 90 percent of projections.” In this case, that’s a range of $78.2 million to $82.8 million.
House GOP warming to change that will help stabilize ObamaCare; U.S. jobless claims drop as job market strengthens; U.S. construction spending rises as private outlays reaches record high.
It is never too early to start thinking about what you want to do next summer. Some government agencies start their recruiting for summer interns in the fall, while most look for interns later in the winter or early spring. Here are some tips for how to find, apply, and fund a summer internship in DC.
Also in the news - Mnuchin calls on Congress to prevent shutdown by raising debt ceiling; Fed holds interest rates steady, in line with expectations; Private payrolls, labor costs up in the fourth quarter.
Trump declines to implement new sanctions on Russia; The FCC votes to require wireless providers to deliver more precise emergency alerts; U.S. Consumer Confidence Increases More Than Expected in January.
NAFTA talks progress as sixth round ends; FCC Chairman Pai opposed Trump Whitehouse’s national 5G network plan; December consumer spending higher, with savings at decade low.
Faculty Affiliate Mauro Guillen discusses U.S. tariffs on solar panels and the U.S.-China trade relationship:
“It’s a little bit naïve to think that by imposing a 30% tariff on solar panels, we are going to be creating jobs,” he says.
According to the Wall Street Journal, Idaho will allow insurers to offer state-based plans whose premiums are determined by their clients’ medical histories, a practice known as underwriting that is prohibited under Obamacare.
“I don’t see how this is reconciled with the basic ACA requirements,” said Faculty Affiliate Scott E. Harrington, a healthcare management professor at the University of Pennsylvania’s Wharton School.
Faculty Affiliate Michael Knoll, a professor at the University of Pennsylvania Law School, discusses New York governor Andrew Cuomo’s plan to challenge the Republican tax plan, which he has labeled “ultimate fraud.”
Faculty Affiliate Professor Kevin Werbach says that blockchain brings with it “a new architecture of trust,” a system where you do not deal with an intermediary person, institution or authority which could revolutionize the way businesses interact with their customers.
Still curious about blockchain? Professor Werbach further explains the technology and the Rise of Trustless Trust in his seminar, here.
Amazon has narrowed down its hunt for a second home to 20 locations. And the chosen city is likely to get an economic jolt – particularly to its housing market.
Faculty Affiliate Fernando Ferreira warns that in locations where housing is already in limited supply, home values could rise even more with a surge of new residents to staff the new headquarters.
If Boston becomes the new home of Amazon, it would be “chaos,” he said. “The housing market would be three times worse than it already is.”
What are the biggest risks that individuals, businesses and governments face in the year ahead, and beyond? According to the 2018 Global Risks Report, published by the World Economic Forum, the environment, cyber security and geopolitics are the areas drawing the most concern.
“The big message that came out of this report is the tremendous importance of the environment” as an area to watch, said Faculty Affiliate Howard Kunreuther, co-director of the Risk Management and Decision Processes Center. “It’s not that that wasn’t [a concern] earlier, but it certainly didn’t have as high a profile.”
As the world becomes increasingly unpredictable, the ways that organizations manage risk will become even more important.
In an increasingly volatile world, risk must be much more reactive and open-minded about the issues that could come along, says Faculty Affiliate Peter Cappelli, George W. Taylor professor of management at The Wharton School, and director of Wharton’s Center for Human Resources. “The tools for managing [risk] have gotten better but I don’t think knowledge of them has spread that far,” he says.
EPA loosens regulatory compliance standards on air pollution; GDP grows at 2.6% annual rate in the 4th quarter of 2017; U.S. durable goods orders increase 2.9% in December, compared to 0.8% expected increase.
Faculty Affiliate Walter Licht explains how Kensington’s opioid crisis has resulted in the areas change over time, pointing to the 1920s when mass-market manufactured goods began flooding the U.S. market causing local firms and industry to disintegrate.
Faculty Affiliate Peter Conti-Brown discusses waivers given to banks accused of errant trading practices.
“Don’t give us the worst of both worlds, which is to criminalize this activity but then not enforce this in the way that we would expect for criminal activity,” he says on how to deal with the criminality of large banks.
Senate confirms Jerome Powell as the new Chair of the Federal Reserve; Schumer withdraws offer to fund Mexican border wall; Existing home sales decrease 3.6% in December compared to 1.5% decline estimated.
Trump signs bill ending shutdown; PA Supreme Court orders new Congressional districts in advance of 2018 primaries; Rosy IMF growth outlook props up oil prices.
Senate reaches a deal to reopen the federal government; Supreme Court rules against Trump administration on Clean Water rule; U.S. economy to grow nearly 3 percent in 2018 due to Trump tax cuts, IMF says.
Senate approaches showdown vote on Friday with government shutdown at stake; Trump administration creates new protections for health workers who have religious and moral objections to certain procedures; Consumer sentiment decreases in January, while tax reform viewed with optimism.
Not a single country in Latin America is really growing at a “robust” rate, notes Faculty Affiliate Mauro Guillen. Unemployment is very high in countries such as Brazil and Argentina, while inflation is high in Argentina and Venezuela, which has the highest rate in the world. Guillen identifies two broad categories of uncertainty that continue to hamper Latin America’s performance: politics and relationships outside the region, such as with the United States and China.
A recent study coauthored by Faculty Affiliate Olivia S. Mitchell, executive director of the Pension Research Council at the Wharton School of the University of Pennsylvania, finds that growing debt obligations of older households leave them vulnerable to rising rates - and that an increasing share of their incomes will need to go to servicing debt.
Also, Trump administration bans Haitians from low-skilled work visas; Jobless claims at 45-year low, housing starts down.
House passes a tariff-relief bill; Lawmakers consider new measure to fight high drug prices; U.S. Industrial Production Up 0.9% in December, compared to 0.4% expected increase.
Companies that stockpiled trillions of dollars offshore free of U.S. income tax may get one last break before paying up – provided their fiscal years don’t follow the calendar year.The tax bill’s international provisions “were put out in a rush,” and the IRS notice “is prime evidence of this and probably a bellwether for other problems to come,” said Faculty Affiliate Chris Sanchirico.
Trump administration to allow Medicaid work requirements; Lawmakers indicate they’re close to a deal on CHIP funding; DACA deal hits opposition from the left; Producer prices drop on services, jobless claims up for fourth week in a row.
Federal regulators reject Perry coal and nuclear subsidization plan; CBO revises downward children’s health insurance cost estimate; Euro zone unemployment at 9-year low.
Judge rules that Trump must keep DACA protections for now; U.S. import prices post smallest increase in 5 months as inventories rise; U.S. wholesale inventories rebound strongly in November.
Senate bill to reverse net neutrality repeal gains 30th co-sponsor and ensures floor vote; U.S. trade gap rose 3.2% to $50.5 billion in November; Employment growth expected to remain solid, according to Employment Trends Index.
Americans are more likely than ever before to enter retirement carrying debt, which leaves them vulnerable to rising interest rates. A recent study coauthored by Faculty Affiliate Olivia S. Mitchell, executive director of the Pension Research Council at the Wharton School of the University of Pennsylvania, finds that growing debt obligations of older households leave them vulnerable to rising rates - and that an increasing share of their incomes will need to go to servicing debt.
The FCC unveils final version of bill to roll back net neutrality regulations; U.S. Added 148,000 Jobs in December; Unemployment at 4.1%; U.S. factory orders increase more than expected in November.
Trump administration to roll back Obama administration marijuana policy; US State Department places Pakistan on religious freedom watch list; Hiring up, as are jobless claims.
Private sector pension coverage started during World War II and reached its peak in the 1980s. But by 2013, just 13 percent of non-union private sector workers were covered by a defined benefit pension.
Faculty Affiliate and executive director of the Pension Research Council at the Wharton School of The University Of Pennsylvania, said that these types of pensions have had funding issues since their inception.
Faculty Affiliate Mauro Guillen said the most important issue for President Moon Jae-in of Korea to address in the new year is U.S. protectionism.
“The threat of protectionism in the U.S. … would be very negative for an economy such as Korea,” he said in an interview. “It is hard to anticipate how that may play out in practice but the U.S. is becoming more protectionist. The U.S. is not a leader in free markets anymore.”
At a recent meeting of educational technology policy advisors, a well-informed university CIO casually declared that MOOCs were history. It’s true they stopped making headlines a while ago, but they have hardly abated. Research from Faculty Affiliate Ezekiel Emanuel on who’s benefiting from MOOCs and why informs this discussion.
It was an unexpectedly stellar year for U.S. stock markets in 2017 – up about 24% thanks to a stronger economy, falling unemployment and expected tax breaks for companies that finally materialized at the last hour. According to Faculty Affiliate Jeremy Siegel, since most of the good news has been baked into indexes now, markets will likely take a breather in 2018.
ObamaCare repeal and entitlement reform top priorities for House Republicans in 2018; House Democrats call for bill barring Trump for launching preemptive nuclear strike on North Korea without Congressional approval; U.S. factory activity accelerates as construction spending reaches record high.
Faculty Affiliate Adam Grant, the professor at Wharton University said, “A.I. is going to help us learn from our own successful routines.” The technology is already available in speech-coaching apps like Ummo. Grant also believes that the companies will start adding new positions called “CLO (chief learning officer)”. He further added, “If you don’t think it’s strategic to have a function that comes right down from the C-suite — to think how do we retrain, and how do we reskill? — then you’re going to be missing out on a really high-qualified workforce to do jobs that don’t exist today.”
Congress to open 2018 on DACA, with a shutdown looming; White House threatens new sanctions against Iran as crackdown on protesters continues; US oil prices start 2018 high amid protests in Iran.
Stock prices boomed this year all over the world, including the United States. It was the best year for the market since 2013. But many market-watchers say prices have probably topped off for a while.
But Wharton School finance professor Jeremy Siegel says, regardless of what the stock market has done, there’s not a lot of evidence yet that overall economic growth is increasing as much.
“I mean, I see some encouraging signs the last two quarters, these last three quarters. But I’m not ready to say that a new trend has really been established.”
Siegel also says that since the tax bill has been signed into law, the benefits of the cuts have already been priced into the market. Siegel says given the sharp partisan divide in Washington, Congress is unlikely to accomplish anything else of real economic significance. And that means 2018 is unlikely to be as good a year for stocks as 2017 has been.
Many owners of beloved local businesses, especially in pricier cities, have been forced to swallow their pride and appeal to their customers in times of crisis – a process streamlined by the rise of online crowdfunding platforms.
Crowdfunding campaigns frequently fall far short of their goals, research shows. Estimates of failure in the industry vary, but study after study reveals that more than half of campaigns fail – and those that fail, fail hard. A 2014 study by Faculty Affiliate Ethan Mollick of about 48,500 Kickstarter projects found that among the failed projects, the mean amount of funds raised was just north of 10 percent. Only 3 percent of the projects that failed to reach their goal made it to the halfway point.
Faculty Affiliate Peter Cappelli says that the world economy is in much better shape than in possibly two decades. That includes in the U.S., so it looks to be a continued good year for jobs. He also says the fastest growing fields are expected to be in largely unskilled jobs, especially home healthcare.
Trump signs tax bill into law; Sen. Susan Collins (R-Maine) to support GOP tax plan; U.S. New Home Sales Grow to Highest Level in 10 Years in November; U.S. Personal Income Rises 0.3% in November, less than expected.
House Republicans close in on votes to keep government open past deadline; US economy expanded 3.2 percent in the third quarter of 2017.
Faculty Affiliate Kevin Werbach, a former FCC lawyer, wrote a paper 20 years ago which predicted that the internet’s feedback loop — what is produced by online activities would inform the internet continuously and create new activities — was an “endless spiral of connectivity” like the vortex of a tornado that would keep fueling its growth.
“In many ways, we got it right,” he said.
Natural disaster costs are mushrooming while government coffers shrink. This year alone, economic losses from Hurricanes Harvey, Irma and Maria could hit $200 billion, plus another $85 billion to pay for the California wildfires. How can public and private rescue efforts coordinate more closely to put as many resources as possible toward rescue and recovery efforts? Faculty Affiliate Michael Useem explores.
When the Republican-led Federal Communications Commission repealed Obama-era net neutrality regulations last week, all eyes turned to Comcast.
The Philly-headquartered cable company, the biggest in the country, is smack at the center of the debate over the future of the internet. Everyone wants to know: How will the repeal affect Comcast? What changes will we see from the company? And who will alert consumers of any potential disasters?
Faculty Affiliates Christopher Yoo and Kevin Werbach, experts on internet policy, commented.
The tax bill speeding through Congress would dramatically reduce the tax rate for U.S. corporations. Faculty Affiliate Jennifer Blouin discusses the possible changes, and about whether or not a cut in corporate taxes will significantly impact the economy.
House approves tax reform bill, sending the package to President Trump; Senate GOP pushes off two ObamaCare bills into next year; U.S. home sales hit 11-year high, supply still tight.
Proponents of free college programs say they will reduce the financial barriers to college and help more people get the education and training they need to get the jobs of today and tomorrow.
But will free college programs achieve their promise? Can they make college more affordable and increase college attainment? Faculty Affiliate Laura Perna explores this issue in her article.
House unveils $81 billion disaster aid bill; GOP expected to pass tax bill Tuesday; Senate rejects Export-Import bank nominee; Single family housing starts and permits surge in November.
Trump seeks to make national security strategy “America First”; Sen. Susan Collins (R-Maine) to support GOP tax plan; U.S. Housing Market Index Hits Highest Level in 18 Years.
CVS and Aetna herald their merger as supplying a new model for the financing and delivery of medical care and prescription drugs - but how do we actually evaluate their claims of “synergies”? Faculty Affiliate Mark V. Pauly writes for the Hill:
Bitcoin is back on an upswing as its futures trading has begun in Chicago, and some investors believe this could signal Bitcoin’s move toward the mainstream. Despite many warnings of a bubble, investors at home and abroad are still betting on the leading digital currency. The Korea Times interviewed Faculty Affiliate Mauro Guillen for his opinion on the digital coin’s listing on the futures exchange and to look at the future course of Bitcoin and other digital currencies.
Locales across the country have offered the company big tax breaks and more to attract its second headquarters. Here’s why the secrecy surrounding Philly’s bid should concern you.
Faculty Affiliate Cary Coglianese, a University of Pennsylvania law professor specializing in regulation and business-government relations, said that, given the stakes, Philly and other local governments could have legitimate reasons to maintain secrecy in the midst of the HQ2 competition — but with a catch.
“In a context like this … any city competing for Amazon will want to keep its secret,” Coglianese said. “It’s not necessarily nefarious. It could just be that they want to make sure that their bidding is not undercut by some other city that knows what they’re providing.”
But in keeping citizens in the dark about potential offers, the city is creating “somewhat of a bias” toward Amazon, Coglianese said. He added that there is a “compelling need” for constituents to be made aware of proposals that will affect the rest of the city – such as promises of tax relief or “other favorable positions” that require full city approval through City Council or other boards or processes.
Trump has unprecedented power to remake the Fed, even without Yellen’s exit. Faculty Affiliate Peter Conti-Brown explains how this administration can reshape the institution.
Faculty Affiliate Cary Coglianese highlights findings from his recent study, “What Congress’s Repeal Efforts Can Teach Us About Regulatory Reform”. Congress’s most significant initiatives recently — its derailed attempts to repeal and replace the Affordable Care Act and its successful efforts to repeal fifteen regulations under the Congressional Review Act — exhibited a startling lack of democratic deliberation. Coglianese explores this issue, and more, in this podcast:
GOP leaders expand child tax credit as Rubio threatens to oppose final tax bill; The FCC votes to repeal net neutrality rules; U.S. industrial production rose 0.2% in November.
FCC to repeal net neutrality protections; GOP strikes deal on tax cuts; Federal reserve lifts interest rates; Retail sales jump over forecasts.
Senate Minority Leader calls for GOP to delay tax bill after Alabama election; GOP reaches tentative agreement to increase corporate tax rate in bill from 20 percent; Trump signs $700 billion defense policy bill; U.S. Consumer Prices Rise by 0.4% in November.
Over two dozen university and college presidents are teaming up to foster legal protection for undocumented “Dreamers”; US Small Business Optimism at Highest Level since 1983; Wholesale prices higher than expected in November.
The price of Bitcoin has soared to more than $15,000, and now investors can trade bitcoin futures on the public market.
“Clearly there is a speculative frenzy going on, which doesn’t necessarily tell us at all why it’s going on or where it’s going to go from here,” says Faculty Affiliate Kevin Werbach.
University endowments have remained tax-exempt. But that appears likely to change under the tax proposal backed by President Trump and congressional Republicans.
Some schools also may resort to tuition increases to pay for the tax, said Faculty Affiliate Joni E. Finney, director of the Institute for Research on Higher Education at Penn.
“That further exacerbates the problem we are trying to address,” Finney said.
House to vote on bill to overhaul Department of Homeland Security cyber unit; Congressional leaders pass two-week stopgap spending measure, scramble to reach agreement on spending bill; Conference Board’s Employment Index Decreases in November.
How can workers hire more minorities and women? The answer is simple and embarrassing, and it’s been well-documented by Faculty Affiliate Peter Cappelli. Employers don’t go find the talent. Cappelli says there are two other answers to “the talent shortage: employers fail to train and develop both employees and new hires, meaning they have no internal pipeline, and employers refuse to pay market rates to hire the talent they need.
U.S. adds 228,000 jobs in November, signaling solid job growth; Consumer sentiment slips unexpectedly in December, falling from October highs.
Shutdown looms as GOP scrambles for votes; Jobless claims decline for third week in a row.
Senate panel approves Jay Powell to serve as chairman of Federal Reserve; U.S. labor productivity increases 3.0% in Q3 2017; Private sector employers added 190,000 jobs in November.
As interest grows, faculty and staff at the top business schools are under pressure to allocate more time and resources to this new area of technology. Kevin Werbach, associate professor of legal studies and business ethics at Wharton, is researching regulation of cryptocurrencies.
“A lot of people think tech overcomes law which is a gross oversimplification. We need to figure out control and regulation,” Werbach told CNBC.
When the fees paid to healthcare providers by the Medicaid insurance program for the poor go up, appointments with primary care doctors suddenly become more available to Medicaid beneficiaries – and the opposite happens when fees go down, according to a recent U.S. study by Faculty Affiliate Daniel Polsky.
“As funding declines it threatens the breadth of provider participation in Medicaid,” he said.
The Justice Department is suing to block AT&T’s proposed deal for Time Warner Inc., saying the deal could lead to higher costs and less choice for U.S. consumers.
Comcast was prevented from engaging in some of that same behavior when the Philadelphia cable giant bought NBCUniversal in 2011. But those restrictions on Comcast are set to expire in 2018.
“It’s pretty clear that the Justice Department is taking a different approach to AT&T/Time Warner than it did with Comcast/NBCU,” said Faculty Affiliate Kevin Werbach.
“The tide has turned in antitrust with [the Justice Department] being more skeptical of media and technology deals,” he said. Werbach said it was “entirely possible” that a Hillary Clinton administration also would have blocked an AT&T/Time Warner deal.
Faculty Affiliate Jennifer Blouin comments on the Republican tax plan that aims to cut corporate taxes in order to incentivize spending on jobs for the middle class.
“How much of that $3 trillion is likely to come back to be used to hire folks, invest in research and development, build new plant facilities and manufacturing? I would suspect its fairly low,” says Faculty Affiliate Jennifer Blouin.
Trump reduces two Utah national monuments; Supreme Court allows travel ban to go into effect; The US trade deficit reaches 9 month high.
Faculty Affiliate Atul Gupta’s study entitled “Estimating Effects of Public Insurance Expansion for Adults: Evidence from California Hospitals” asked what happens when people suddenly get access to insurance coverage.
Read more about the positive findings here:
On Tuesday December 5th, the Penn Wharton Public Policy Initiative and the Wharton Neuroscience Initiative co-sponsored a talk by Dr. Kimberly G. Noble (C’98 GR’05 M’07), Associate Professor of Neuroscience and Education at Teachers College, Columbia University. Trained as a neuroscientist and pediatrician, Professor Noble studies how inequality relates to children’s cognitive and brain development across infancy, childhood and adolescence. Her research is focused on the study of neurologic development in children under 3 years old, the socioeconomic factors that correlate with brain development disparity, and the ways we might harness this research to inform the design of public policy interventions.
A major decision on the way the U.S. government collects information about race and ethnicity through the census and other surveys was expected to be announced by the Trump administration.
“To the extent that an administration were to show racial animus and to make decisions about the statistical classification or the questions on surveys that relate to race in a manner that was motivated by racial animus, that would be clearly illegal and unconstitutional,” Faculty Affiliate Cary Coglianese says.
Senate Republicans Pass Tax Bill; GOP pushes to pass measure to avoid government shutdown; U.S. factory orders edge slightly lower and core capital goods orders revised up.
EPA to hold biofuels quota steady; Global trade steams ahead in uncertain geopolitics; Price pressures strengthen case for rate hike.
St. Louis Federal Reserve Bank president James Bullard joined Faculty Affiliate Jeremy Siegel for a wide-ranging conversation about the future of interest rates, inflation, the state of the economy, overall monetary policy, the possible over-valuation of stock prices — and more — on “Behind the Markets,” on Wharton Business Radio on SiriusXM channel 111. Bullard oversees the Eighth Federal Reserve District, which includes all of Arkansas and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.
Sens. Marc Rubio (Fla.) and Mike Lee (Utah) plan to offer Senate tax bill amendment to further expand child tax credit; The U.S. Economy Grows Faster than Expected in Third Quarter, as GDP Expands at 3.3 Percent Annual Rate; Pending home sales rebound 3.5% in October as South recovers from hurricane.
New Federal Reserve Chair nominee pledges to continue policies of Yellen and Bernanke; 2018 global economic growth predictions strong.
Two directors battle for control of Consumer Financial Protection Bureau; CBO finds that proposed Senate tax bill would hurt low-income Americans; U.S. new home sales surge in October, hitting a 10-year-high.
With the on-demand economy and automation on the rise, questions concerning what the impact will be on the future workforce emerge. Vikrum Aiyer, Strategic Communications and Public Policy Lead for the on-demand logistics and delivery platform, Postmates, Inc., sat down with Dan Loney from Knowledge@Wharton Business Radio to discuss his work and policy questions surrounding the on-demand industry.
Homeland Security ends temporary residency for 60,000 Haitians; US home sales speed up.
In 1953, President Dwight D. Eisenhower delivered his landmark “Atoms for Peace” speech at the United Nations General Assembly. There, he charted the pivotal role nuclear energy would play in ensuring a bright future for mankind: “The United States knows that peaceful power from atomic energy is no dream of the future. The capability, already proved, is here today.” Four years later, the International Atomic Energy Agency was born, and by 1970, the United States could produce 100 gigawatts of nuclear energy. Hopes were so high that the Atomic Energy Commission projected the United States would construct over 1000 nuclear plants by 2000. 
When the fees paid to healthcare providers by Medicaid go up, appointments with primary care doctors suddenly become more available to Medicaid beneficiaries – and the opposite happens when fees go down, according to a recent U.S. study.
“As funding declines it threatens the breadth of provider participation in Medicaid,” said Faculty Affiliate Daniel Polsky.
“I don’t want to overestimate its result on patient welfare, but I think it’s a good thing to have broad choices of doctors when you’re looking to make a new patient appointment,” he said.
The first drug with a sensor embedded in a pill that alerts doctors when patients have taken their medications was approved by the Food and Drug Administration, raiding issues involving privacy, cost, and whether patients really want caregivers looking over their shoulders.
Faculty Affiliate Kevin Volpp says that the technology could make a big impact on non-adherence, since 40 - 45 percent of people with common cardiovascular and other chronic diseases such as diabetes do not take their medications as prescribed.
“That’s a big deal because medication non-adherence is a huge public-health challenge in the United States,” he said.
On November 20th, the Penn Wharton Public Policy Initiative welcomed PPI Visiting Fellow Vikrum Aiyer for a campus visit. Aiyer currently leads strategic communications and public policy for the on-demand logistics and delivery platform, Postmates, Inc. He previously was a senior official in the Obama Administration, serving as Chief of Staff to the Under Secretary of Commerce and as President Barack Obama’s senior advisor for innovation and manufacturing policy in the White House National Economic Council.
The recently unveiled Republican tax reform plan has been particularly unpopular with many in the real estate industry. The plan caps the mortgage interest deduction at $500,000 for new purchases and the property tax deduction at $10,000, but eliminates deductions for state and local tax payments. Faculty Affiliate Michael Knoll, co-director of the Center for Tax Law and Policy at the University of Pennsylvania Law School, discussed what the bill would mean for individual homeowners and for the housing market.
Congress faces growing health crisis in Puerto Rico; Leading Economic Indicators increased by 1.2 percent in October.
Crowdfunding has expanded to being a great place to invest money or help new products come to market by pre-purchasing. The Crowdfunding market saw over 87 Billion dollars exchanged in the market in 2016. This market has attracted scammers whose only purpose is to rip off with good hearts.
Faculty Affiliate Ethan Mollick in 2015 found that 9% of projects on Kickstarter fail to deliver as promised to their backers, and this number does include fraudulent projects. Based on this, consumers should closely watch for scams.
Faculty Affiliate Jennifer Blouin says it may be hard to tell. “The trouble is, we really don’t have a good way to measure what the effects on growth are, because once we have the rate cut, other things start happening over time,” she says.
“We have natural disasters. We have failures in commodity markets. The whole credit crisis. And so once you mix that into the fold, how can you predict what the aggregate effect of just that piece of tax legislation is? And I would argue we really don’t know.”
Tuesday was the “worst day of my business life,” former General Electric vice chairman Bob Wright told CNBC, after shares plunged for the second day in a row.
Faculty Affiliate Michael Useem, a Wharton professor and director of the school’s Center for Leadership and Change Management, said new CEO John Flannery’s work is going to be extremely difficult.
“A remake of this scale … it’s like turning a battleship. It’s going to take some serious time,” he said. “With a tough-minded executive in charge you can do it and the betting is probably going to be on Flannery doing it,” he added.
Senate passes defense bill and sends to Trump’s desk for signature; U.S. Housing Starts Increase More Than Expected in October.
House declares US Yemen involvement unauthorized; Produce prices up on services, inflation ticking up; Central Bankers to continue investor guidance.
Faculty Affiliate Arthur van Benthem says yes, states can mitigate damage done by the federal government.
“Given the state of affairs in Washington, D.C., states should adopt their own policies to promote renewable energy and limit the emissions of greenhouse gases,” he says.
As Chancellor Merkel was continuing to forge a coalition government following the September elections, Germans overall remained strongly supportive of the goal of Energiewende, or energy transition. An August 2017 poll found “95 percent of Germans support further expanding renewable energy” . Still, in Germany and abroad, Energiewende faces criticism for not delivering enough greenhouse gas emission reductions for the given level of investments .
President Trump calls for repeal of ObamaCare’s individual mandate and cuts to top tax rate; Annual defense policy bill nearly complete; Analysis determines that Senate tax bill would make taxes jump for many earning under $200,000.
How will China’s leadership handle the challenges of the world’s second-largest economy, especially within its chaotic financial system?
Faculty Affiliate Franklin Allen questions Xi’s appetite for painful reforms that are needed to rebalance China’s economy away from its longtime heavy reliance on construction investment and exports. “Xi has established tremendous political power. Now the question is how much of that he will turn into economic reforms,” Allen says.
President Trump’s “America First” plan places significant focus on the creation of job opportunities for the millions of currently unemployed Americans. The expansion of Apprenticeship programs, having received bipartisan support, is one strategy being used to meet this goal. Senators Tim Scott and Cory Booker introduced the “Leveraging and Energizing America’s Apprenticeship Programs Act”, or LEAP act, this February, providing tax credits to companies per apprentice hired . In the summer, President Trump affirmed his commitment to create 5 million new apprenticeships by 2022.  He signed an executive order this past June doubling the money for apprenticeship grants to $200 million while cutting the Department of Labor’s (DOL) main job training vehicle, the Workforce Innovation and Opportunity Act (WIOA), by 36%. 
The tax bill released by Republicans on Thursday proposed capping the mortgage-interest deduction, limiting the portion of a mortgage on which people can deduct their interest at $500,000, down from the current level of $1 million.
Though Faculty Affiliate Todd Sinai says that the deduction doesn’t appear to encourage homeownership however, which it was ostensibly designed to do.
The Republican tax plan going through Congress would give a break to companies such as Apple that have spent years dodging taxes. They could bring the money home by paying a nominal tax. The bill would also sharply cut the tax rate companies such as Apple pay, says Faculty Affiliate Jennifer Blouin.
Trump announced Thursday he would not name Yellen — the first woman to hold the post — for a second term when her tenure expires at the end of January.
“This is stunningly unusual,” says Faculty Affiliate Peter Conti-Brown, a financial historian who studies the Fed at the University of Pennsylvania’s Wharton School.
Senate GOP takes different approach to tax reform than House; Trump Administration taking steps to crack down on opioid trafficking; Consumer sentiment reaches 97.8 in November compared to 100.9 estimate.
Early and developing companies push digital transformation through managerial directive or by technology provision. In contrast, maturing companies tend to pull digital transformation by cultivating the conditions that are ripe for transformation to occur.
Research from Faculty Affiliate Lynn Wu further explores these differences and how they impact employee performance:
Critics decry Amazon amendment in military funding legislation; GOP Senators mark-up tax code, delaying corporate tax cuts until 2019; Stocks fall on tax plan worries; Jobless claims hover below 240,000.
Repealing ObamaCare mandate would save $338 billion over 10 years, according to CBO analysis; Demand for construction workers soft, even after hurricanes.
“Paying for dirt” refers to the ballooning land costs that now comprise an unprecedented part of house values, such as in severely unaffordable metropolitan markets. This has created an environment where affordability is impossible.
Faculty Affiliate Joseph Gyourko has researched how home costs and the costs of construction are affected.
The United States is currently facing a massive opioid crisis. Over half a million people have died from overdose since 2000, and almost 800,000 people are addicted to opioids (43% of whom have Hepatitis C and 2% of whom suffer from HIV). President Trump recently declared a national emergency on the opioid crisis, and created the President’s Commission on Combating Drug Addiction and the Opioid Crisis. Although the Commission recommended many policies to reduce addiction and prevent overdose, more can be done. One policy currently being researched and pushed in several cities throughout the United States is the implementation of Safe Injection Facilities (SIFs). An SIF is a safe, environment where people who inject drugs are provided with a sterile equipment, medical oversight, and overdose-reversal medication immediately on hand in case of emergency.
Trump puts pressure on Congress to repeal ObamaCare health insurance mandate; William Wehrum nominated by Trump as new leader of EPA Office of Air and Radiation; Employment Index rises after hurricane-related declines.
House votes to repeal ObamaCare Medicare Independent Payment Advisory Board (IPAB); U.S. Added 261,000 Jobs in October; Unemployment Rate at 4.1%; U.S. trade deficit widens despite increase in exports.
Pop culture’s fascination with science, technology, engineering, and math jobs is vast. From a fixation on the applications and impacts of automation and artificial intelligence, to an enduring interest in startups and technology entrepreneurship, it seems we cannot go more than a day without a headline using the phrase “Jobs of the Future.”
How European Reliance on Russian Fuel Enables Manipulation from Moscow
GOP Chairman says he plans to include deduction for local property taxes in forthcoming legislation; Bipartisan group calls to reauthorize funding for community health centers; Trump Administration issues new airport security rules; U.S. consumer spending grows at fastest rate since 2009.
In September of 2012, California Governor Jerry Brown signed assembly Bill 685 into law, which states “that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes” and further that all state agencies have to consider Bill 685 when “revising, adopting, or establishing policies” related to the uses of water described.” Bill 685 and other Brown water initiatives have only become more difficult to implement in the nearly 40 years since Brown took office for the first time (he also served from 1975 to 1983) as the population of California has nearly doubled in size (from 20 million to 38 million), largely in the southern part of the state. Unfortunately, most of the rain falls in the northern part of the state, which creates massive infrastructure needs for California in terms of the movement of water through aqueducts.
FCC Chairman indicates Commission will vote to roll back regulations on media diversity; GOP budget squeaks by the House; Jobless claims up, labor market tight; Trump to declare opioid crisis a public health emergency.
John Taylor has a complicated history with the U.S. Federal Reserve that could force him into a hard pivot if he’s selected as its next leader.
The Stanford University economist, who is on President Donald Trump’s short list to lead the central bank, wrote the monetary policy rule that Fed officials use as a constant reference, and many of the institution’s own economists are schooled in his ideas. Some critics have said that the so-called Taylor Rule could lead officials to make mistakes because it is not forward-looking and doesn’t incorporate key forces shaping the economy.
Faculty Affiliate Peter Conti-Brown has commented on the issue, saying that “John Taylor could be one of the most disruptive Fed chairs in its history, if he can persuade the internal actors within the system that all this time, he was right, and they were wrong.”
Just last month, the City of Newark, New Jersey voted against a housing law that aimed to curb gentrification in the city. The law sought to “mandate 20 percent of large residential projects to be set aside for low and moderate income residents.”  The law did not pass, but it was an attempt nonetheless by the city’s legislators to try and find a balance between, “development and affordability.” 
Recently, the research and development of new antibiotics has plummeted due to small cumulative profits . The overuse of antibiotics is the driving force behind the emergence of antimicrobial resistance. The potential repercussions from this include significantly greater health care expenses due to the increased difficulty of treatment and surgeries and infections becoming life-threatening once again. Now the main question is if a combination of federal initiatives and research-based solutions will be enough to mitigate the effects.
CBO reports that bipartisan health care bill would reduce deficit by $4B over 10 years; Congressional Democrats introduce legislation to allow states to set up public option for health-care insurance; GOP congressional leaders scrambling to agree on tax deduction before budget vote; U.S. durable goods orders increase 2.2% in September, vs. 1.0% expected increase; U.S. new home sales race to nearly 10-year high in September.
“For most businesses, the issue of location choice now is driven by labor: Will we be able to attract the white collar skills we need?” says Faculty Affiliate Peter Cappelli, director of School’s Center for Human Resources. “For unskilled or semi-skilled jobs, will we be able to get it at a price we want to pay? No business goes to the Silicon Valley or New York City because it is cheap; they go because of the labor supply.”
Bipartisan group of senators to announce bill for NSA reform; House to vote on Senate Budget Thursday; Oil gains on exit plan news, shrinking stockpiles.
Living in a diverse urban environment, I had believed that in Philadelphia I had daily experience with the complexity of this country, from its industrial past to its gentrifying present, and all the social contexts that change as a result of closed industry. After November 9th, I scoured the Internet, attended university events that I believed would lend some answers, and read Hillbilly Elegy, as many around me recommended. Step by step I attempted to breakdown my Northeastern biases about the United States, yet never physically stepped out of my comfort zone. Little did I know that the true way that I would break down my implicit biases about my own country would be through an international context.
Since the inception of The Elementary and Secondary Education Act (ESEA) in 1965 there have been a variety of measures instituted to address disparities in the quality of education such as changing fund allocation mechanisms, providing incentives for schools, altering tax distribution (local, state, and federal), and enforcing accountability measures. Despite these measures, there are still significant differences in the quality of education across different demographics. In order to close these gaps, the U.S. government needs to reassess the funding mechanism for public schools in order to minimize the disparities between the resources available to school districts in wealthy and poor neighborhoods.
Trump voices support for higher tax bracket for wealthy in new tax plan; Trump promises no changes to 401(k) in proposed tax plan; Florida, Texas lose 135,000 jobs in midst of hurricanes, but likely to rebound.
In his OpEd for the Hill, Faculty Affiliate Chris Sanchirico explains some basic economic principals as they relate to findings from the CEA and Trump’s tax plan.
“The CEA’s presentation of economic science is largely pretense. No one knows how much employees would benefit from a corporate tax reduction, and no one has a good answer to why directly lowering wage taxes wouldn’t better serve employees — assuming, that is, that this is the goal.”
The European Union is at a cross-roads in the wake of Brexit and the rise of Eurosceptic populism. Do European leaders push for renewed political and economic union, or allow the existing trend of disengagement to continue or even spiral into the EU’s dissolution? For many who favor greater cooperation among EU member states, the next step is to pursue defense integration. For EU leaders, defense integration effectively revolves around two ideas: increased military cooperation and the creation of a common EU nuclear program. The former posits the necessity of a “Schengen of defense” premised on the sharing of military capabilities while the latter would see the European Union seek its own nuclear deterrent with France’s arsenal.
Bipartisan senators strike deal on health care subsidies; Newly controversial opioid enforcement law under fire; Housing starts total 1.127 million in September, vs. 1.18 million expected starts
The information age has created a paradox: though our access to news articles is greater than ever, it is also easier to miss news, particularly that which does not seem alarming or directly relevant to our lives. One such topic is the recruitment by and funding of terrorist organizations in the Western Hemisphere. While terrorist attacks—whether successful or foiled—conjure prominent headlines, the issues of recruitment and funding are often largely overlooked by the media.
The Jones Act has received a lot of press in the wake of Hurricane Maria for inhibiting aid to Puerto Rico in their time of need. Nearly a decade after being signed into law, the Act has become the target of scrutiny, with politicians such as Senator McCain (R-AZ) calling for the amendment of the “antiquated” law . In addition to its controversial role in disaster relief, many organizations (such as the National Renewable Energy Laboratory) have drawn attention to the bill’s consequences for offshore wind energy production – an area in which the US has traditionally been lacking .
Senate Democrats introduce bill to repeal opioid distribution law; Congress nearing deal to loosen bank regulations; Federal Reserve Chair Janet Yellen signals likely interest rate hike.
On Wednesday, August 2, President Trump endorsed a piece of legislation authored by Senators Tom Cotton (R-AR) and David Perdue (R-GA) that would radically change immigration policy in the United States.  Known as the RAISE (Reforming American Immigration for a Strong Economy) Act, the goal of the bill is, in the words of the President, to “not only restore [America’s] competitive edge in the 21st century”, but to also “restore the sacred bonds of trust between America and its citizens.”  
President Trump to decertify Iran nuclear deal; Trump to scrap critical health care subsidies for Obamacare; House Approves $36.5 billion hurricane and wildfire aid package; Inflation surges after hurricane increases gas prices, U.S. consumer price index increased 0.5% in September; U.S. retail sales rose 1.6% in September, driven by autos and gasoline purchases.
A couple of decades ago, hospitals and clinics did not advertise much to customers. Now, they are spending more and more each year on marketing, according to university professors who study advertising, and are keeping track. The optimism at the heart of these ad campaigns by care providers, feature slogans like “Thrive” and “Smile Out.” Is this spreading a message of false positivity?
Thirty years ago, health care providers marketed to physicians more than consumers. The ads were drier, more factual, says Faculty Affiliate Guy David, an economist and professor of health care management at the University of Pennsylvania.
“When the ads are more consumer-facing as opposed to professional-facing, the content tends to be more passionate,” David says.
Trump to sign healthcare executive order; Jobless claims fall below estimates, producer prices rise; December rate hike very likely according to Fed minutes.
What happens when big investment money moves into mass home ownership? Faculty Affiliate Susan Wachter comments on how private equity funds are changing the real estate market and rentals.
“With their heavy emphasis on financial rewards and punishments and their end-of-year structure, [performance reviews] hold people accountable for past behavior at the expense of improving current performance and grooming talent for the future,” Faculty Affiliate Peter Cappelli wrote in the Harvard Business Review. “In contrast, regular conversations about performance and development change the focus to building the workforce your organization needs to be competitive both today and years from now.”
Contract workers are in wide use today, and it’s easy to see why: The short-term financial gains are simply too alluring to pass up, says Faculty Affiliate Peter Cappelli.
“Investors hate ‘employment’ because it seems like a fixed cost, even though most companies have no reluctance to get rid of employees, and many keep contractors around as long as their average employee,” says Cappelli, director of Wharton’s Center for Human Resources. “Even though it is typically more expensive per hour to hire contractors, it shows up on different budgets. But it also reflects a general short-term view of strategy: Rather than getting really good at something, which requires investing in competencies, we are going instead to just find new opportunities quickly.”
Older women in the U.S. are eager to work. And employers, facing a tight labor market and a dwindling supply of workers as older baby boomers retire, need these women. Yet women over 50 find the doors of American corporations are often closed to them, according to academic studies, employment experts and interviews with women struggling to get hiring managers to take them seriously.
For employers, the scarcity of workers shows no signs of abating. That will force them to look for talent in populations they might otherwise have ignored, says Faculty Affiliate Olivia Mitchell, a professor at the University of Pennsylvania’s Wharton School of Business. If they don’t explore those neglected pools, “they won’t find the trained, educated, mature workforce they need,” she says.
The Trump administration announced the outline of their tax reform plan last week. While many details have not been released, their blueprint includes reducing the corporate rate from 35% to 20%, eliminating the Estate Tax and the Alternative Minimum Tax, reducing the number tax brackets, and increasing the standard deduction. Faculty Affiliate Michael Knoll comments on the plan for WHYY Radio, adding that a reduction in corporate tax rate is widely agreed upon among economists, but the lost revenue will have to be made up elsewhere.
Republicans elected to the House of Representative, Senate, and the Presidency from 2012 to 2016 ran on the promise to “repeal and replace” the Affordable Care Act signed into law by former President Obama. The Affordable Care Act, otherwise known as Obamacare, revolutionized the healthcare market completely by leveling an individual mandate, offering subsidies to those who could not afford to buy health care, and bringing more people into the insurance market to offset costs. 
Trump indicates he may use executive order on health care; Working class Americans face growing debt burden; IMF raises worldwide economic outlook.
A well-known study by Oxford professors estimates that in one or two decades, half of the number of U.S. jobs will become automated.  The projections for job computerization have moved beyond production occupations and have entered service and other non-routine jobs that required cognitive tasks. Some have even claimed that, in the future, Artificial Intelligence (AI) will do everything better than humans. 
EPA head to sign rule on withdrawal from the Clean Power Plan; Houses passes budget, paving way for tax reform; U.S. deficit spending reached $668 billion in fiscal 2017.
For much of the second half of the 20th Century, cities in the United States developed by suburbanizing – wealthier families fled urban cores and settled in outlying areas, where the size of one’s house became a preeminent status symbol. Yet over the last few decades, these trends have reversed, at least among young, well-educated millennials. Between 2010 and 2015, in all but six of the country’s 33 largest metropolitan areas, population growth among educated millennials in core cities eclipsed that of their surrounding suburbs, with such populations in 13 cities growing at more than double the rate of their suburbs. 
Treasury to withdraw estate-tax rules proposed by the Obama administration; Service sector index registers highest reading in over 12 years; U.S. private sector adds 135,000 jobs in September, according to ADP.
On May 16th, President Donald Trump released his budget plan for the federal government. The plan proposed sharp cuts to many governmental departments while increasing the resources available to the military and defense agencies. The details of the proposed budget are portrayed in the diagram below. 
Supreme Court hears arguments on gerrymandering case; GOP tax plan hits political opposition; Auto sales boom post Harvey.
Congress to vote on budget and tax reform this week; Tom Price resigns as Health and Human Services Secretary; U.S. manufacturing activity reaches a 13-year high, as construction spending increases.
The private sector has a huge role in addressing climate change and other environmental issues. This was on full display during and after President Trump’s announcement to withdraw the U.S. from the Paris Climate Agreement. Silicon Valley’s Elon Musk gathered huge criticism for his advisory role to the President, but, in a belief that he could do more good from the inside, he pushed for the Trump administration to stay committed to the Paris framework. Apple’s CEO Tim Cook also spoke with the President to persuade him to stay, however, the President chose to follow through with his campaign promises.
Divestiture. It is a word anyone who follows mega-mergers and antitrust law hears on almost a daily basis. The first time that I thought about it was in a course I took, “Economic Analysis of Law” and the idea did not make too much sense. When companies merge aren’t they planning on creating some sort of new efficiency by becoming a larger company? Wouldn’t they be giving up any economies of scale by unloading a sizable chunk of their companies? That’s why when I stumbled across a New York Times article with some anecdotal evidence that supported my skepticism [Sagers, “Limits of Divestiture”], I wanted to delve deeper into the issue. During my summer at the FTC, I have been involved on a case that analyzed a divestiture remedy and I have been able to read some FTC resources to better verse myself on the subject.
The Penn Wharton Public Policy Initiative is pleased to announce that Vikrum Aiyer will be our Visiting Fellow for the Fall 2017 semester.
US Bombardier tax overshadows NAFTA trade talks; Trump lifts the Jones Act to speed aid to Puerto Rico; US proposed tax plan boosts dollar; Jobless claims spike on Irma.
The World Bank Group: A case in point
By Kirtika Challa
Senate passes bipartisan Medicare reform legislation; Senate Republicans say that they will not vote on ObamaCare repeal bill; Trump tax plan would cut corporate rates and nearly double standard deduction; August pending home sales drop 2.6%; U.S. durable goods orders increase 1.7% in August, more than expected by economists.
The changes to the political landscape in Germany – Europe’s largest economy — has implications both for the country and also for the European Union as a whole. It also brings up serious questions as to whether Merkel will be able to end her political career on a productive note – and about who will succeed her as de facto leader of the EU.
“You can interpret the French election [of President Emmanuel Macron in May] in different ways, but neither one of these leaders comes up with a very strong mandate,” says Faculty Affiliate Joao Gomes.
The problem isn’t unique to marketplace plans, said Faculty Affiliate Daniel Polsky. “I would argue that the challenge isn’t necessarily a lack of primary care physicians, it’s a need to reorganize care to meet the needs of the population,” he added. “Team-based care is an opportunity to meet those needs.”
After CBO score, GOP repeal effort appears dead; GOP tax plan likely to include new pass-through business rates; Home prices in 20 cities increase more than forecast; Oil gains, then falls on geopolitical concerns.
The federal minimum wage was last raised in 2009 to $7.25.  However, 29 states and the District of Columbia have already raised their state wages above the federal minimum. This is largely due to the fact that low-wage workers are being left behind by the modernized U.S. economy. As productivity, inflation, and cost of living have all risen, wages have not kept up.
U.S. trade agency rules in favor of U.S. solar panel manufacturers, allowing President Trump to set up sanctions on foreign solar panels; Key Republican Senators oppose ObamaCare repeal measure; Economists expect slower U.S. economy growth than Trump’s 3 percent GDP growth target.
The sequence of events is so familiar now as to be predictable. A CEO or high-profile employee commits a blunder or transgression, a social-media campaign fans the flames of outrage, and employer and employee appear to be left with no other choice but to part ways.
Are there alternatives, or have we firmly settled into a culture that prefers firings and forced resignations?
“Punishments are bigger for leaders because the audience for them is bigger: The message value of the punishment is more important,” says Faculty Affiliate professor Peter Cappelli. “Transgressions that have to do with ethics and values are more serious and require bigger punishments because the internal audience is bigger — corporate culture is influenced by it.”
In light of JPMorgan Chase CEO Jamie Dimon’s recent description of the digital currency Bitcoin as a fraud, Faculty Affiliate Kevin Werbach responds to the criticisms of the currency from incumbents.
“Jamie Dimon surely appreciates that in financial markets, risk is also opportunity. And as his company seems to recognize, for incumbents facing potentially revolutionary innovation, the riskiest approach is doing nothing.”
Trump’s Department of Health and Human Services says it’s cutting the advertising budget for open enrollment from $100 million down to $10 million - a reduction in spending of 90%.
“Cutting ACA Advertising by 90% is evidence-based policy … if policy goal is sabotage,” Faculty Affiliate Daniel Polsky, executive director of the Leonard Davis Institute of Health Economics at the University of Pennsylvania, said on Twitter.
New numbers from the U.S. Census Bureau show that the American poverty rate went down by 0.8 percent - but why aren’t American’s feeling the relief?
Faculty Affiliate Peter Cappelli comments for MarketPlace:
Faculty Affiliate Dr. Patricia Danzon said, most new cancer drugs today are developed this way: by small companies and for small groups of patients. The companies often license or sell successful drugs to the larger companies.
A new study, she said, “is shining a light on a sector of the industry that is becoming important now.” The evidence, she added, is “irrefutable” that the cost of research and development “is small relative to the revenues.”
Fixed-rate loans, thanks to their predictable, affordable payments, have stabilized home borrowing and protected families from being priced out of their neighborhoods, says Faculty Affiliate Susan Wachter. “It is a form of insurance, in fact, for the home, for your family, your job,” she says.
Philadelphia’s city pension plan needs reform: even before the new contracts, actuaries predicted two years ago that if the city obtained its assumed rate of return — 7.85 percent at the time — it would not reach its pension funding goal until 2031.
“The consensus estimate is that stock and bond markets are unlikely to earn the assumed 7.7 percent return, so the funding will be much below what is projected,” said Olivia S. Mitchell, executive director of the Pension Research Council at the University of Pennsylvania.
Medicaid directors say that latest ObamaCare repeal bill would place massive burden on states; U.S. announces $700 million in aid for Syrians in war zone; U.S. household wealth rises $1.7 trillion, setting another record.
President Trump promises more North Korea sanctions; Senate Health Committee schedules hearing on opioid crisis; Eurozone consumer confidence at highest since 2001; US jobless claims fall, hurricanes’ impact still unclear.
GOP Senators Graham and Cassidy continue pushing Obamacare repeal effort; Senate Republicans Agree to Move Forward on $1.5 trillion tax cut over next 10 years; U.S. existing home sales decrease 1.7 percent.
Senators reach a tentative deal on Republican tax policy, overriding deficit hawk’s worries; The White House throws its weight behind last ditch Obamacare repeal; US homebuilding weak on input scarcity, Harvey; US Treasury yields rise ahead of Fed meeting.
Senators near bipartisan deal to stabilize ObamaCare insurance markets; Senators near passage of annual defense policy bill; Homebuilder confidence hit hard in September, likely due to hurricanes.
Stanley Fischer, vice chair of the Federal Reserve, announced he will resign in mid-October, while a question remains over whether Janet Yellen will be reappointed as chair when her term ends in January. Fisher’s departure leaves the seven-member board with as few as three sitting members, creating a vacuum of power and an unprecedented opportunity for President Donald Trump to reshape America’s central bank. Faculty Affiliates Krista Schwarz and Peter Conti-Brown discuss what lies ahead for the Fed under the Trump Administration.
Senator says he nearly has enough votes for ObamaCare repeal; Retail sales fall unexpectedly in August; Industrial production hit by Harvey, drops by most in 8 years; Consumer sentiment falls slightly in September, amid concerns about Hurricane Harvey.
Schumer, Pelosi and President Trump strike deal on DACA, border patrol; Sanders, Progressives unveil single payer healthcare plan; US inflation rises, finally hitting monthly targets; Consumer comfort falls for a second week in a row.
Senators announce bipartisan extension of children’s health insurance program; U.S. Producer Price Index up 0.2% in August, vs. expected 0.3% increase; U.S. Household Incomes Rose in 2016 to Record High.
On September 12th, the Penn Wharton Public Policy Initiative was pleased to welcome Yochi Dreazen (C’99), Deputy Managing Editor and Foreign Editor of Vox. He began his journalism career at the Wall Street Journal, where he worked for 11 years and served as the paper’s main Iraq correspondent. In addition to his foreign reporting duties, Dreazen wrote about the US military at home, and in 2010, the Military Reporters & Editors Association recognized his work with its top award for domestic coverage. Dreazen published an award winning book titled The Invisible Front: Love and Loss in an Era of Endless War, and after leaving WSJ but prior to joining Vox, also worked for Foreign Policy magazine, The Atlantic, and the National Journal.
Senate to take up annual defense policy bill this week; Trump pushes Congress towards tax reform; Treasury Yields advance as investors look to debt auction.
“There’s a lot of excitement about it,” said Kevin Werbach, a Wharton School professor who studies bitcoin and its underlying technology, called blockchain. “It’s a commodity, and demand is exceeding supply.
“The magnitude of the rise this year has been a speculative bubble which will in time deflate,” Werbach said, “but how fast and how far we don’t know.”
Coastlines will continue to become ever denser population and economic centers, which guarantees that storm-related disasters will get even costlier. What should be done about it?
Faculty Affiliate Howard Kunreuther suggests changing the way that risk is communicated to homeowners could potentially mitigate the disastrous effects of floods.
Faculty Affiliate David Musto discusses the late Stephen A. Ross, this year’s winner of the Wharton-Jacobs Levy Prize for Quantitative Financial Innovation. Many in the field consider him to be one of the most important thinkers in modern finance. One of his best-known ideas, for which he is receiving this award, is arbitrage pricing theory, or APT. It has been a staple of finance since he developed it in 1976 while at Wharton.
Presentations from Fed chair Janet Yellen, European Central Bank President Mario Draghi and a host of researchers amounted to a broad rebuttal of many of the ideas that carried Trump to office at a Fed Conference in August.
“Renegotiating NAFTA and protectionist measures against China will not save jobs,” Faculty Affiliate Ann Harrison said, arguing that the decline in manufacturing jobs was due to labor-saving management and technologies.
These dark and accumulating clouds hanging over Wells Fargo lead us to ask the existential question: Can the bank survive? Faculty Affiliate Peter Conti-Brown writes on the future of the bank after fraud.
As floodwaters from Hurricane Harvey recede in Houston, one thing that’s been revealed is that some of the damage — financial, physical, emotional — could have been avoided.
“It gives people a feeling of complacency if they are not required to buy insurance,” said Howard Kunreuther, the co-director of the Wharton Risk Management and Decision Processes Center at the University of Pennsylvania. He would like to see FEMA provide people the “gradation of their risk.”
The House on Friday gave final approval to a fiscal deal that raises the debt ceiling and keeps the government funded until December, while providing $15 billion in hurricane relief.
he House on Wednesday overwhelmingly approved nearly $8 billion in disaster aid in response to Hurricane Harvey. Top Democrats said on Wednesday that they will support linking immediate help for Hurricane Harvey recovery with a short-term debt limit increase of three months. U.S. Trade Gap Widened Less than Expected in July.
In a tweet, President Trump announced Tuesday that he will let the DACA program expire in six months. US factory orders fell by the largest margin in nearly three years.
The Department of Health and Human Services announced cuts to Obamacare outreach programs. US manufacturing beating analyst estimates by a wide margin, signaling higher consumer and business demand.
President Trump focused on his vision for tax reform in a speech on Wednesday. Rather than issuing concrete plans, the president discussed “bringing back Main Street,” as well as middle class tax cuts. The Bloomberg Consumer Comfort Index rose to a sixteen year high.
Congress may dole out Harvey relief in stages, rather than a catch-all relief bill as was the case with Superstorm Sandy. GDP growth signals upward trajectory at its revised 3% rate.
The massive destruction caused by Hurricane Harvey in Houston and other parts of Southern Texas will require Congress to converge on multiple needs. Consumer confidence, meanwhile, is high.
President Trump rolls back an Obama era regulation, allowing the Department of Defense to once again transfer excess military equipment to local police. Texas is hit with a Category 4 hurricane, Harvey, causing widespread flooding and damage to a key energy sector of the Unites States.
A BRAC (Base Realignment and Closure) is a “congressionally authorized process” influenced by the Department of Defense (DOD) that involves the closure of some military base installations and realignment into other existing bases, in order to consolidate resources and energy spent.  When the military is functioning with more than 20% excess capacity (as is foreseen by 2019), efforts such as promoting a BRAC round can cut down on that excess. 
American consumers routinely come into contact with harmful chemicals, including those hiding within products they might have assumed safe. The Federal Government historically had very little oversight of chemicals in the marketplace, and now an estimated 85,000 chemicals are available for common use.  On June 22nd, 2016, Congress took action to address this issue through amending the Toxic Substances Control Act (TSCA). New TSCA was passed with overwhelming bipartisan support, and grants the Environmental Protection Agency (EPA) the authority to require health-based safety findings for new chemicals before they can enter the marketplace.
We currently face innumerable policy challenges at the national level, but sometimes you just need to look close to home to see a policy success.
Imagine receiving a monthly check from the federal government that covers all your basic expenses. Think food, shelter, clothing. What would you do? Would you take that leap of faith to be the entrepreneur you’ve always dreamt of being? Take on another professional challenge you’ve eyed for the last twenty years but never pursued because it presents too much of a financial risk? Or would you grow lazy, spending your days on the couch watching reruns of the latest hit Netflix series?
Senator Jeff Flake wants to break up the 9th Circuit Court of Appeals, arguing that it is currently too large. The ACLU is suing California over ballots which were discarded in the 2016 Presidential election. Janet Yellen is defending the financial system, which she believes to be stable and effective. Oil prices are up due to Hurricane Harvey, which is expected to hit Houston.
Among one of the most important concepts in modern administrative law is so-called Chevron deference. The 1984 landmark opinion in Chevron U.S.A. Inc v. Natural Res. Def. Council, Inc. requires courts to apply a two-step test when deciding whether an administrative agency has properly interpreted a statute granting it policymaking authority on an issue. 
In 2015, six companies dominated the seed and agricultural chemical markets: BASF and Bayer from Germany, Dow Chemical, Dupont and Monsanto from the United States, and Syngenta from Switzerland. Their combined pest control and seed business generated over 60 billion dollars in revenue. 
Among policymakers, as well as statisticians and analysts, Foreign Direct Investment (FDI) is considered to be an important macroeconomic variable in defining the makeup of a country’s economy. While the statistical definition of FDI is often debated, the consensus is that the investment into another country must achieve lasting interest in an enterprise in order for it to be considered FDI. 
The U.S. economy is facing the crisis of an aging workforce that has the potential to harm the economy as more people begin to exit the workforce than enter it. By 2030, it’s predicted that 20% of U.S. residents will be aged 65 and older, compared to only 13% in 2010 and 9.8% in 1970.  The U.S. fertility rate is also at a historic low, sitting at 62.0 births per 1000 women aged 15 to 44.  This combination leads to a slowdown in the replacement rate, and makes it difficult for the U.S. to sustain or increase its economic growth. Additionally, an aging population can have other drags on the economy, especially the costs associated with neurodegenerative disorders and other diseases associated with aging.
The continuing proliferation of algorithmic decision-making, automation, and the use of artificial intelligence has once again brought to the forefront of the minds of those employed and those seeking to keep unemployment numbers down the question of the potential impact of automation and artificial intelligence on the labor market. While some are most concerned about the potential effect of job replacement and job loss thanks to automation, others are more concerned about biased decision-making coming from algorithms, a lack of quality checks for algorithms and automated systems, and the potential implications of automating jobs such as those of government employees or regulators.
America’s infrastructure is in disrepair. Every four years the American Society of Civil Engineers (ASCE), an organization made up of over 150,000 civil engineers, gives the United States an “infrastructure report card.” In March the organization gave the U.S. a grade of “D+,” an improvement from a “D” in 2009. 
Nine states banded together to form a coalition to cut greenhouse gas emissions in the North East and Mid Atlantic region. Jobless claims are still at healthy levels, and housing sales have dropped.
In 2016, almost 753,000 immigrants had cause to celebrate as they entered the final stage of the naturalization process: the Naturalization Ceremony.  While becoming an official U.S citizen is a great accomplishment for many, countless more immigrants never get that far. Not because they do not desire citizenship, but because they cannot afford the price of naturalization.
Trump has threatened to withdraw from NAFTA as well as to shut down the government over his border wall project. U.S. home sales have fallen because of low construction and higher prices. Inventories of crude oil have also dropped.
Faculty Affiliate Olivia Mitchell talks on CNBC about how a husband’s mortality is a driving force behind gains in women’s financial literacy late in life.
“So what we can see as time marched forward, is that the women tended to start out as less financially literate — but as the day approached where their husband passed away, the women gained financial skills.”
President Trump announced that he would be increasing the number of troops in Afghanistan. He also declined to provide exemptions to a coal CEO and friend, who wanted to ignore environmental rules. Because of limited supply, U.S. housing prices have continued to increase. Emerging markets are being hit by the end of the ECB’s quantitative easing.
Professor Peter Conti-Brown discusses the recent appointment of Elizabeth Duke as the Chairman of the scandal-ridden bank’s board. She was formerly a Federal Reserve governor.
“She is a superb choice for a troubled institution in need of steady, principled, and pragmatic leadership.”
Faculty Affiliate Kevin Werbach tempers excitement around the new technology’s ability to cut down on corruption in Nigeria’s environmental cleanup initiatives.
“It’s still very early. It’s still not as solid and reliable as where they need to be, but it is clearly where we’re going to see more activity.”
Early in childhood many children begin to repeatedly hear the same advice from their families, teachers and mentors; be exceptional in high school and get into a top college, choose a “useful” major, graduate on time, get a well-paying job, and work your way up. Beyond simply being a list of ways to get young adults out of their parent’s home, generationally these instructions have been passed down as keys to socioeconomic mobility. Within the United States, this concept of economic mobility is a norm. It is the epitome of the American Dream, but in practice there are gaps in execution and the hoarding of a dream for particular groups of people.
Coming off of the celebration of our nation’s independence, it is certainly fair to say the last few weeks and days have produced a glut of think pieces pondering whether or not America is still, in 2017, exceptional.
America’s clean energy economy is growing: about 3 million people in the United States work in the clean energy economy, one out of 50 new jobs in 2016 was in the solar industry, and solar industry jobs are expected to increase another 10 percent in the next year. 
Last month, the Alaska Legislature narrowly avoided a government shutdown after months of gridlock and frustration by approving a nearly $9 billion operating budget for the upcoming fiscal year.
Most of you probably had the chance to drive on any of the interstate highways in the United States, but have you ever thought about the process of building these roads for public use? When you pay a bill to a local electricity company, do you think about how electricity is generated from a power plant and transferred to you through an electrical grid?
Following World War II, the European continent was left ravished and defenseless. With the rise of the Soviet Union as a threat to democracy, the North Atlantic Treaty Organization (NATO) was formed.
The Member of Congress I am interning for this summer is a pro-life Democrat, a rare breed in today’s political landscape. Not surprisingly, he has been attracting a fair amount of criticism recently from pro-life conservatives who argue that his voting record is far from that of a pro-life politician. Two recent votes, one against the reinstatement of the Mexico City policy and one against defunding Planned Parenthood, are often highlighted as evidence of this, but the issue is not that black and white.
Global income inequality has gotten a lot of attention in recent years. The gap between the world’s haves and have-nots is increasing; the persistent disadvantage that some individuals face violates the fundamental intuitions of fairness and justice.
There exists a paradox in the pharmaceutical industry. Despite the pharmaceutical sector providing some of the highest value of any industry in modern economies, the industry is almost universally viewed with suspicion and is frequently criticized.
The battle over repealing and replacing the Patient Protection and Affordable Care Act has been one of the most central policy debates in the United States since the 2016 elections. After several months, the battle seemingly came to an end in a late night Senate vote that struck down Senate Republicans’ bill to repeal major provisions of the Affordable Care Act (ACA). However, within days, President Trump added another layer of uncertainty to the future of health insurance markets by threatening to stop payments to insurance companies that have helped ensure coverage of low-income Americans.
Faculty Affiliate Patricia Danzon discusses the cost of health care and specifically how treatments’ effectiveness or value don’t necessarily mean they’re affordable for most consumers.
“Now, you can have a new product that meets that cost effectiveness threshold, but the total cost of paying for all of the patients who might be eligible, breaks the budget.”
The Ban-the-Box advocacy movement has been an incredibly successful bipartisan effort. As of May 2017, 27 states, the District of Columbia, and 150 local municipalities have enacted policies which banned the question on employment applications concerning criminal history.
As one of his first acts as president, Donald Trump withdrew the United States from the Trans Pacific Partnership. The cohort of twelves nations negotiating the agreement constituted 40% of the world’s economic output. Trump’s decision to pull out to focus on bilateral trade agreements< understandably reshuffled the order of trade in Asia for the coming year.
Companies are usually known for being self-centered organizations. Thus, decades ago it would have sounded quite outlandish to talk about their responsibilities towards the social and political community in which they operate.
Democrats are looking into the cost of multiple sclerosis treatment pricing. Wisconsin announced that they would be giving Foxconn $3 billion in cash and tax incentives to create 13,000 jobs in the state. Consumer sentiment is up, although partisanly, and oil futures are down.
Faculty Affiliate Kevin Werbach comments for Philly.com on Bitcoin’s rapid rise this summer and its prevalence in Philadelphia.
“The magnitude of the rise this year has been a speculative bubble which will in time deflate but how fast and how far we don’t know.”
Lawmakers, Academics and Policy experts alike are flummoxed on how to reduce the ever-widening wealth gap between White Americans and other minorities particularly African Americans. Well, one idea is to begin by addressing the historical explanations for such stark racial wealth disparities.
Faculty Affiliate Professor Gilles Duranton discusses the prospective future of cities’ population.
He predicts that the forces of dispersion will mean that “cities won’t get to 80 to 100 million people.”
The Presidential Executive Order on Promoting Energy Independence and Economic Growth, signed on March 28, 2017 by President Trump at EPA headquarters, dramatically changes the U.S. energy sector’s regulatory landscape.
While the White House has decided to continue Obamacare payments, Trump has cut contraception regulations that protect women’s rights to health coverage. The labor market continues to tighten, however manufacturing in Philadelphia has declined slightly.
Donald Trump’s comments during the election have shaped a vision of U.S.’s trade policy mixing strong protectionist retaliatory threats with complaints concerning existing trade agreements and relations.
According to the NAACP, the United States makes up only 5% of the world’s population but holds 25% of the world’s prison population. Four times more prisoners are incarcerated in the U.S. today than in 1980 due to the War on Drugs. 
Imagine a manufacturer of widgets, let’s call them Widget Corporation, which commands a forty percent share of the widget supply market. After assessing the market, Widget Corporation decides to acquire its closest competitor, Widgets-R-Us, which represents thirty-five percent of the market. Post-acquisition, the combined company would have a seventy-five percent share of the widget supply market. An acquisition which results in such a high market-share concentration would likely raise red flags to U.S. government antitrust enforcement agencies, the Department of Justice and the Federal Trade Commission, as it may substantially lessen competition in the widget market.
President Trump’s infrastructure plan is largely based on removing regulations that would prepare the country for climate change. The FOMC’s anticipated minutes have pushed the dollar up. Britain’s unemployment dropped to it’s lowest level since 1975.
Trump signed an executive order on infrastructure. California and other states and municipalities have sued the Trump Administration over funding cuts for sanctuary cities. The US is seeing gains to spending, as China’s economy starts to cool down.
The White House is looking to address NAFTA renegotiations and trade with China this week. Markets are calming now that North Korean fears are cooling. The Bundesbank, Germany’s central bank, is supporting lower interest rates.
On March 16th, 2017 White House budget director Mike Mulvaney drew headlines for his press briefing regarding the administration’s budget proposal. His comments on one topic, after school programs that provide meals for low-income students, received significant airplay.
Jobless claims rose last month, despite still being well below the measure for a healthy labor market. Insurance companies are asking for rate hikes from the government due to Obamacare uncertainty caused by the President. The dollar is sliding as President Trump continues to stoke fears of conflict.
Insurance companies are waiting to hear about the future of Obamacare. The EPA is looking to roll back standards for fuel economy despite industry pushback. Inflation continues to rise slowly and the housing market is becoming increasingly unaffordable.
President Donald Trump ran his campaign largely on the premise that the United States’ engagement in international trade, diplomacy, and development has weakened its position in international politics.
The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, more commonly known as Dodd-Frank, is a target for repeal among conservative lawmakers hoping to eliminate a signature legislative achievement of the Obama Administration.
On November 8, 2016, Donald Trump was elected into office as the President of the United States. Upon entering the office, he made quite a few promises to the American public on what he would accomplish during his term.
In hosting the World Cup in 2014 and the Olympic games in 2016, the Brazilian economy may appear to be on the up-and-up. Once the booming center of Latin America, Goldman Sachs economist Jim O’Neill thought Brazil worthy of the now-famous “BRICS” moniker in 2001, placing it among economic powerhouses Russia, China, India, and South Africa.  As of late, however, Brazil has suffered a fall from grace; 0.1% GDP growth in 2014 followed by 3.8% and 3.3% declines in 2015 and 2016 respectively. 
Border Adjustment – politicians on both sides of the aisle have lobbied the term back and forth, representing it both as a cure to America’s broken tax code and as an “idea so stupid that only an intellectual would believe [it].”  With House Republicans promising a comprehensive tax reform package by 2018, it is important to understand the fundamentals of the proposal.
For thousands of years, the only oil that most people thought came out of the Mediterranean was meant for dipping bread in. However, recently discovered natural gas fields off the coasts of Cyprus, Israel, and Egypt are dramatically changing the playing field.
President Trump’s stunning election victory last November breathed new life into the “Audit the Fed” movement. He promised supporters along the campaign trail to increase transparency over monetary policy decisions made by the Federal Reserve.
Apple is being investigated by U.S. trade authorities for patent infringement. It is looking increasingly unlikely that a “clean” debt ceiling bill passes. The tension in North Korea is likely to spook markets. Productivity in the U.S. has risen as oil prices drop.
If regulations are not enforced to curb environmental damage or stop-gap processes are not implemented to assist struggling farmers in coping with climate change, the agriculture industry in Vietnam will face major changes by the end of the century. The salinization of the Mekong Delta and decrease in agricultural land highlight the issues the nation will face.
Thomas Jefferson wrote, “The most sacred of the duties of government [is] to do equal and impartial justice to all its citizens.” Since it was founded in 1870, the Department of Justice’s mission has been to: “enforce the law and defend the interests of the United States according the law; to provide federal leadership in preventing and controlling crime; to seek just punishment for those guilty of unlawful behavior; and to ensure fair and impartial administration of justice for all Americans.” 
In November 2014, a worldwide bribery investigation involving tens of millions of dollars, four continents, and the law enforcement agents of ten nations came to an end at a courthouse in New Haven, Connecticut . There, the United States Department of Justice assessed the largest sanction in the history of its enforcement of the Foreign Corrupt Practices Act (FCPA) and fined French rail transport company Alstom S.A. $772 million .
The Justice Department under Attorney General Jeff Sessions is targeting sanctuary cities. The Interior Department is looking to expand mining and drilling on federal and native land. Job openings hit a record high and small business confidence rises.
Following additional missile testing, the UN Security Council voted unanimously to impose more sanctions on North Korea. The U.S. oil rig count fell by one and infrastructure spending also decreased.
We live in an age in which terrorism takes a broad range of forms from rudimentary Molotov cocktails and home-made bombs to cyber hacking. As technologic capabilities soar, terrorism includes a wider variety of threats, and the U.S. government must add and adapt policy to address the ever-broadening term “terror.”
Trump’s new policy towards foreign investment in Cuba reverses rapprochement and will have significant implications on the U.S., Cuba, and other nations with heavy investments in Cuba.
Employers added 209,000 jobs in July, while hourly wages increased by 2.5%. The Senate also approved a right-to-try bill for unapproved healthcare options. Brexit also appears to be affecting GDP growth estimates for the UK.
The GOP has moved the debate over the future of healthcare back to the committees, increasing hope that they will return to bipartisanship. Republican governors are also working to reform healthcare within their states. Jobless claims have continued to fall as the labor market tightens, but despite this, inflation continues to stagnate.
One of the main benchmark tests that has been used for the past several decades in determining the success and efficiency of government regulations, in particular EPA regulations, is cost-benefit analysis.
President Trump signed a sanctions bill overwhelmingly passed by the House and Senate. Courts also ruled that Democratic state attorneys general can defend Obamacare subsidies. The U.S. has also signaled that it will crack down on the trade relationship with China. Oil prices have also fallen as job growth has risen and the DOW has hit a record high.
For too many of us, the American Dream has become a pipe dream. The nation is currently in the midst of an affordable housing crisis, where rents have skyrocketed while homeownership rates have plummeted.
Debate over the best way to improve education has been raging for years. Proponents for school choice believe the education system should act like a market economy – give consumers (parents and students) the option to choose what school fits their needs best.
Democrats in the Senate laid out their plan for reforming the U.S. tax system. Senators from both parties also introduced an Internet of Things cybersecurity bill. European manufacturing is on a tear as U.S. spending slows and the dollar continues to slide.
Faculty Affiliate Ethan Mollick discusses Tesla’s problems with returning the deposits of potential customers who no longer wish to purchase the upcoming Model 3 sedan.
“A deposit says, I’m part of your team, I believe in you Tesla, I believe in you Elon. But it also hurts more when Tesla takes two months to return your money, instead of two weeks. It breaks the social contract, as much as it does any financial contract.”
Senator Bernie Sanders has released a plan meant to limit over-priced drugs. The debt ceiling also continues to approach, with the GOP debating how best to deal with it. The U.S. oil rig count is up again, along with housing prices, as the market continues to deal with a shortage of properties.
Real Estate Professor and Faculty Affiliate Susan Wachter speaks with NBC Philadelphia about the current hot housing situation.
“The impact of the lack of supply of owner housing means that millennials go to where they can go which is the rental market, and they drive up rents.”
It turns out, most people don’t know and that could be a problem. Faculty Affiliate Peter Conti-Brown is worried about this.
“People don’t quite know what the Fed does, but public trust in the Fed is at a historic low. It’s that combination that is dangerous.”
Faculty Affiliate Robert Inman discusses the upcoming Trump infrastructure bill. He weighs the benefits and risks of public private partnerships, specifically.
“You’ve got to make sure that [the private contractors] are not short-changing quality in favor of lowering costs in order to make money.”
Faculty Affiliate Robert Inman weighs in on the controversial tax. He defends the projections surrounding the revenue expected by the city despite them being too optimistic. He says that getting within “85-90 percent of their projections is pretty good.”
Professor Mauro Guillen writes for the World Economic Forum on why larger companies may be the most important drivers of innovation going forward.
“Perhaps the single most important factor in the future development of technology will not be the process of innovation itself but how effectively companies align themselves with large transformations in the marketplace so that they can gain scale quickly.”
Professor Joseph Gyourko’s research from 2003 on land zoning and land use was used in the L.A. Times to explain the housing crisis in San Diego.
“[Gyourko] reasoned that in a competitive market with low barriers to new supply, the price of a new house should be very close to the marginal, physical cost of construction, with older houses costing less than an industry index of construction costs (materials and labor).”
On May 11, 2017, the Trump administration announced a new trade deal with Chinese President Xi Jinping. While this deal aims to address the growing trade deficit between the United States and China, it does so by creating greater market access for American firms as opposed to levying steep tariffs on Chinese imports.
On June 1st, President Trump announced that the US would be withdrawing from the Paris Climate Agreement, a non-binding international commitment to reduce domestic emissions 26-28% by 2025 from a 2005 baseline.
John McCain (R-Ariz.) cast the deciding vote against the Senate Obamacare repeal, which would not have been possible without Senators Susan Collins (R-Maine) and Lisa Murkowski (R-Alaska). The U.S. economy has entered its 9th year of expansion, the third longest period of growth since WWII. Unemployment continues to hover near record lows while wages are increasing.
Senate Republicans are continuing their efforts to repeal Obamacare this week. The next vote could be on Thursday evening or Friday morning but Senators are not yet sure what is in the bill. Tax policy guidelines are to be released by the White House, as well. Unemployment filings continue to be at a healthy level and capital spending is robust.
Faculty Affiliate Professor Daniel Polsky’s research found that physicians are more likely to take on patients with private health insurance. He also found that their willingness to take on Medicaid patients was directly tied to reimbursement rates.
Wharton Research co-authored by Faculty Affiliate Howard Kunreuther examines the potential for privatizing federal flood insurance. His research found that the National Flood Insurance Program (NFIP) often overcharges policyholders.
Faculty Affiliate Professor Jeremy Siegel leads a discussion between Northwestern University Professors Robert Gordon and Joel Mokyr.
Treasury Secretary Steve Mnuchin has continued to raise awareness that the debt ceiling is approaching, despite slow movement by Congress. The Federal Reserve has also signaled that they will begin winding down their balance sheet. Inventories of oil have fallen recently, as well.
Professor Susan Wachter comments for NBC Philadelphia on how housing has become increasingly out of reach for Millennials.
“If you have a $50,000 income, you’re going to be able to afford a $200,000 house no problem, but that $200,000 house you could get in 2000, is maybe $300,000 today.”
Among the greatest paradoxes in the politics of our modern world, international aid programs have become more of a hindrance to development than a gateway into it. Since their inception, American aid programs and agencies, particularly USAID, have invested billions of dollars in resources and projects to provide assistance to nations around the world. Though the desire to aid is not a uniquely American one, America leads the world in the amount that it spends yearly on economic developmental assistance–nearly $31 billion dollars was spent on projects in 2015 alone according to the Organization for Economic Cooperation and Development (OECD) .
As part of their “Better Deal,” Democrats are introducing legislation that would incentivise tech training in cybersecurity. The Federal Reserve continues to be worried about low inflation. Consumer confidence is up, and so is manufacturing purchasing.
One of the countless attributes on which America prides itself is having the most powerful economy in the history of the world. In many ways, this pride is hardly ill-placed—the numbers speak for themselves. The International Monetary Fund lists the 2016 U.S. nominal GDP at over $18.5 trillion, exceeding China (in second place) by over $7 trillion .
In the aftermath of the November 8th election, the United States appears to be a country deeply divided along partisan lines. Democrats and Republicans can hardly agree on the major issues, whether they are discussing immigration, health care, or tax reform.
A recent study found that the mortgage interest deduction, as is, is not effective in boosting home ownership. This comes as home sales are down, primarily due to low inventory. In other news, the House has not put a vote on the budget on their agenda yet, due to disagreements over how to move forward. Finally, the national oil rig count is down in what is expected to be a brief pause.
“This really has a very strong benefit for a variety of people. These things are really cheap and you get great protection.”
Professor Olivia Mitchell discusses how lifetime annuities can be an important part of a retirement plan.
“Once people are able to manage their identity, other possibilities open up. People will be able to band together in virtual countries and set their own rules.”
Faculty Affiliate Kevin Werbach comments on how blockchain technology is changing systems of trust and the institutions on which that is based.
“If you do things to lower costs you may have to pay the money back.”
Professor Scott Harrington comments on the Senate Obamacare repeal bill and how it would affect the Medical Loss Ratio.
The proposed Cadiz Water Project is an example of how business interests, environmental policy, and political power are fundamentally intertwined in a way that underlies many decisions made in Washington. Sometimes called the “Cadiz Valley Groundwater Storage Project,” or alternatively, the “Cadiz Water Conveyance Project,” this private water infrastructure project has become increasingly controversial in recent months as the Bureau of Land Management under President Trump has come closer to giving the project the green light.
Although school choice is currently a hot topic in the news, the alternative approach to K-12 education is not always well understood. This primer to school choice will explain what school choice means, present the school choice movement and its surrounding debate, and connect the ideology to current federal policy priorities outlined by the Trump Administration.
Numerous American cities have recorded incidents where police officers’ use of force led to unnecessary civilian deaths. Those incidents spurred organizations like Black Lives Matter, the ACLU, and the President’s Task Force on 21st Century Policing to petition for increased police accountability, under the belief that accountability on police results in increased citizen safety. Video evidence from deadly incidents with Eric Garner, Tamir Rice, and Zachary Hammond demonstrate accountability’s centrality, particularly when considered with testimonies of other police misconduct such as assault .
Yesterday, Senator John McCain announced that he was diagnosed with brain cancer. His absence will loom large in the Senate, both as a leader and in crucial votes to come. As the labor market continues to tighten, low-income earners are seeing large salary increases. GDP is also improving, with the NY Fed raising expectations for the indicator.
The latest CBO estimates for the Senate Obamacare repeal and replace bill, which has died, would leave 22 million more uninsured within the next 10 years. More news out of the Senate: Trump’s tax policy nominee was advanced out of Committee. Jobless claims continue to fall, which the Fed is anticipated to cite in raising rates in the coming months.
Since the Patient Protection and Affordable Care Act, well-known as Obamacare, was enacted in 2010, the US healthcare system has been a hot potato on Capitol Hill. President Trump promised to repeal Obamacare, the House of Representatives passed the American Health Care Act on May 4, and sent the bill to the Senate. The Senate unveiled their version of Obamacare’s replacement on June 22, and this release provoked confrontations between Republicans and Democrats, and even within the Republican bloc. Why has the US healthcare system been a war of words so long?
The Trump administration released their first budget proposal last month, requesting sweeping cuts to many government programs . The cuts included a massive 30 percent cut in the foreign aid budget, slashing funds to the State Department, USAID, and bilateral foreign aid to countries across the world .
There is increasing murmurs that the Federal Reserve and ECB may be prolonging their easing policies too long and may be creating excesses in the economy. Oil prices also jumped on news that U.S. inventories decreased by almost 5%. Further, housing is rebounding following three months of decline.
As the White House looks to renegotiate NAFTA, the GOP is looking towards tax reform, now that healthcare reform has collapsed. Homebuilding sentiment and trade prices are also down.
China seems to be unwilling to agree to terms that Secretary of Commerce Wilbur Ross claimed they would in May. Homeland Security has also stated that they will allow 15,000 more seasonal work visas to help with industries unrelated to agriculture. This all comes as student loans are reported to be the driving reason behind lower homeownership among millennials.
Volvo recently announced that it would stop making cars that weren’t hybrids or electric powered vehicles after 2019. Faculty Affiliate Mauro Guillen considers it a bold move.
Professor David Zaring writes in the New York Times about the new process of confidentially filing reports to the SEC prior to an IPO. The SEC has recently begun expanding this ability to more companies, which could create conflicts of interest.
“The possibility that insider trading will occur does not mean the policy is a bad idea. But it does suggest that the commission will have to be vigilant in ensuring that its confidential reviews stay confidential.”
Professor Peter Cappelli contributes to a piece analyzing the changing landscape around working-from-home policies in the private sector. He generally takes a nuanced take on the issue.
“Is it a good thing or a bad thing? The answer is, it depends.”
When we typically think about government contracts, prominent companies such Lockheed Martin, Exxon Mobile, and AT&T usually come to mind as key players who take the lead on large, high-valued projects.
PPI Intern Kevin Lawler discusses the software designation and its future.
The GOP is expected to tie raising the debt ceiling to a more popular bill, like expanding veteran’s health insurance options. Amazon’s purchase of Whole Foods is also being looked at by Democrats, who are looking to hold a Congressional hearing on the matter. June retail sales fell slightly while consumer prices remained constant.
The Congressional Budget Office (CBO) released their analysis of both the White House budget proposal and the revised Senate healthcare bill. The Labor Market is continuing to stay strong, although forecasts for economic growth are being revised down due to gridlock in Washington, D.C.
The GOP campaign promise to repeal and replace the Affordable Care Act has been central to the political action in Congress since President Trump’s inauguration. The questions now, are what will the replacement be and what consequences will the legislation have?
In late May, newly elected President Donald Trump released his first full budget proposal detailing the administration’s fiscal priorities. At surface-level, the $4.1 trillion budget for 2018 appeared comparable to that of last year’s; however, upon closer review, it became clear that funds dedicated to scientific research – among other departments – had been significantly reduced .
Janet Yellen testified before a House committee on future policy, which largely hinges on inflation, which has been lower than desirable. The CFRB has evaluated the Trump budget and found that it would raise debt to 80% of GDP, despite White House claims that it would lower to 60%. Oil prices have risen slightly and E.U. industrial output is also up.
The fight against the opioid epidemic is one of the few issues that enjoys almost unanimous bipartisan support on Capitol Hill. That’s primarily because in every district, in every state, communities are grappling with how to fight a public health crisis that has transcended age, race, and socioeconomic status. The emotional and economic costs of the crisis are hitting hard, as communities feel the impact not only in real dollars but also in opportunity costs.
The recent JOLTS report shows that hiring in May was the strongest it has been since 2004. The housing market is also rebounding, as bankruptcies are wiped from consumer’s records. The White House has nominated a new Federal Reserve Bank Regulator. The CFPB has also proposed a rule that would allow consumers to bring class-action lawsuits against banks.
The Federal Reserve, the Bank of Canada, and the European Central Bank all see growth going forward. This is matched by economic news showing that Black and Hispanic Americans are seeing historically low unemployment on the horizon. Unfortunately, 2 million more Americans are uninsured this year, compared to last year.
The Middle East and North Africa region is considered one of the most politically unstable regions in the world, yet the region has always had extreme significance in foreign affairs as a result of its great economic potential.
Faculty Affiliate Mauro Guillen speaks with Asia Times about the future of China, from a demographic and labor composition perspective. He sees China’s aging population as a real liability, saying:
“I think the impact will be felt relatively quickly - in the next 10 or 15 years or so.”
In a New York Times article on the experiences of those who speak out against unethical workplace practices, Faculty Affiliate Mary-Hunter McDonnell discusses the regrets that some whistleblowers feel. She elaborates on the repercussions that many face.
“He said if he could relive it he wouldn’t have done it because it devastated his social life…. He was basically boxed out of the social world he had created for himself as part of his job.”
In a recent paper by Penn Law’s Institute for Law and Economics written by Faculty Affiliate Tom Baker, the viability of robots as investment advisors is questioned.
“A robo-adviser will always provide the advice that it is programmed to provide.”
Professor Scott Harrington is quoted in a piece on how startups are helping bring life insurance to the almost 40% of Americans who currently lack it. He points out that traditional insurance companies are working to remain competitive against an increasing number of startups in the space.
A Knowledge@Wharton article looks into the problems that emanate from compensations systems. Faculty Affiliate Peter Cappelli, as the Director of the Center for Human Resources at Wharton, illustrates the changing landscape of salaries.
“It is that we want pay to do lots of different things, some of which are in conflict…. So, we generated new systems, especially for executives, that based pay on firm performance and also individual performance. Then we opened up the labor market, with people being hired across companies. The focus shifted to basing pay on opportunities elsewhere.”
The E.U. and Japan plan to put a free trade agreement into force within the next two years. The EPA is facing a lawsuit from 5 States over a pesticide. The U.S. economy continues to do well, with a strong dollar and labor market.
Following the successful launch of an ICBM, the White House is pushing for more sanctions against the nation. The Education Department is also facing a lawsuit brought by 18 states regarding for-profit colleges. Meanwhile, the trade deficit has fallen and the labor market continues to be strong.
Senate Republicans are working hard to update their healthcare bill to make it passable, and Sen. Ted Cruz’s amendment may make that possible. Economically, the U.S. currently meets multiple key criteria that tend to predict recessions.
While only 36% of fourth graders are proficient in reading , the question of how American children will access education should be on everyone’s mind.
A Trump tweet has caused the debate over how Internet sales are taxed. After rising for 23 weeks, the number of oil rigs in the U.S. declined slightly. So did automotive sales. Construction spending is flat for the month, but up for the year.
Professor Ethan Mollick, a faculty affiliate, comments on recent efforts in the recruiting sphere to fairly boost diversity. Unilever is trying out a strategy where entry level applicants will be evaluated based on how they perform on online games.
“Games in recruiting have had ups and downs over the years,” Mollick said, at least in part because of the fact that, “every kind of game discourages some people and encourages others.”
Professor Peter Cappelli, a faculty affiliate, discusses the chance to the storied tech company’s change in policy with Knowledge@Wharton.
He applauds the company’s nuance, criticizing Yahoo’s effort earlier, “I think the problem here was really this kind of one-size-fits-all thinking. Is it a good thing or a bad thing? The answer is, it depends.”
In an article focusing on recent developments in the blockchain-based cryptocurrencies, faculty affiliate Kevin Werbach shares some of his concerns about the products.
He wants investors to ask themselves a simple question: “Why does this token add value? For something like Brave, which is trying to monetize attention as an alternative to the current Web advertising model, there’s a logical reason why the system uses tokens.”
Faculty Affiliate Michael Useem comments on the recent phenomenon, where legacy companies are struggling to compete with their silicon valley counterparts. He and others note that leadership plays an important role in this.
He comments, “who ever thought Ford would be competing with Google? But they are, and Mark Fields wasn’t moving fast enough.”
In a recent tweet, the President claimed that “Obamacare has led to fewer health insurance options for millions of Americans.” Professor Polsky found that to be partially true.
He states, “Fewer plan options will be available when compared to the early years of the Affordable Care Act.”
President Trump is being urged by his advisors, against the wishes of his cabinet, to increase tariffs to protect U.S. steel. This comes as inflation continues to stagnate.
The House is expected to pass a bill that would cut funding to cities who do not comply with ICE detainer requests. There is also confusion about how the limited-scope travel ban will be enforced, now that the Supreme Court has allowed it. GDP growth has been revised up and the labor market continues to be strong.
The rollout of the GOP budget for 2018 will be released after the July 4th recess. President Trump has also nominated a second attorney to the NLRB. The labor market continues to grow, causing problems with construction. Home prices are starting to cool overall, however, there are some markets with double digit growth.
The Senate Healthcare bill is facing criticism from the right and left following a CBO report anticipating 22 million fewer Americans would have insurance under the law. Seattle’s minimum wage increase also received some damning analysis. The IMF has also downgraded its expectations for the U.S. economy. In better news, ECB President Mario Draghi has implied optimism about European economic growth.
An appropriations bill in the House would raise military spending above the President’s budget proposal. The Supreme Court ruled in favor of government regulators when it comes to certain environmental regulations. Finally, oil rig counts are up for the 23rd week in a row.
Decades ago, the answer would have been yes. This was primarily due to concern over the widespread use of drugs and the desire of policy makers to stop drug use from spreading across the country.
The US is currently leading the world with a new rise of populism centered around ‘putting America first’. Some have interpreted this as a desire to withdraw from the global stage. However, remaining active in global partnerships, treaties, and geopolitical trade may be the best way to insure America’s national security and economic success.
Uber recently announced that they would add a tip function to their ridesharing app, in line with what their competitor, Lyft, has done. They continue to make changes without the leadership of Travis Kalanick.
Faculty Affiliate Professor Peter Cappelli comments on the departed CEO’s affinity for President Trump, “the thing that is important to remember about Uber and Lyft is who their customers are. Almost all their customers and all their money come from urban areas, and those areas are Democratic.”
The U.S. Supreme Court ruled that lying during a naturalization interview is not evidence enough to revoke said citizenship later in life. Trump is planning on pushing for stricter protections for the domestic steel industry in the name of national security. The labor market continues to tighten, although more indicators are showing that those benefits might not be reaching Americans with disabilities.
Senate Republicans recently released their much-anticipated healthcare bill. The law that that bill seeks to replace is the Affordable Care Act, which was devised by Faculty Affiliate Ezekiel Emanual.
He comments on some recent, negative statistics surrounding healthcare in the U.S. right now, “The problem is a lot of this uncertainty makes insurance companies nervous. When insurance companies are nervous, they do two things: they exit markets and they raise premiums. That’s exactly what you’re seeing.”
Knowledge@Wharton looks into China and its finance industry’s future in a piece that features Faculty Affiliate, Franklin Allen.
“China needs to do a lot of work. For example, its capital markets do not work well.”
U.S jobless claims continue to be at very healthy levels and some of the only hiccups in the labor market now are issues with getting working visas for some companies. The Senate healthcare bill is moving somewhat to the center, due to Mitch McConnell’s narrow margin for error. Missouri has joined Ohio and Mississippi in trying to hold pharmaceutical companies to account for their role in the opioid epidemic.
Politifact looked into a recent tweet by the White House, which claimed that the Affordable Care Act, also known as Obamacare, “led to fewer health insurance options for millions of Americans.” The website found this statement to be false.
Faculty Affiliate Daniel Polsky discussed the situation in rural America going forward, “Fewer plan options will be available when compared to the early years of the Affordable Care Act.”
As the Executive branch is dealing with increasing criticism of its budget proposal, Republicans in Congress are beginning to see backlash over their healthcare bill. Overseas, Germany is increasing its trade with Asia as a hedge against potential trade issues with the United States.
Faculty Affiliate Jennifer Blouin weighs in on how effective a repatriation scheme similar to the one in 2004 would be.
“If there are good investment projects, companies that have cash overseas very easily borrow domestically to make those investments happen. The reality is, there’s not much profitable investment they want to do in the U.S.”
Faculty Affiliate Kevin Werbach comments for Politico on Uber’s future. The company recently let its CEO, Travis Kalanick, go, and is looking to right the ship.
He makes a point about what would need to happen before an IPO: “the company would want to put its house in order first before going and doing an IPO, which would definitely include a willingness to resolve some of its disputes with localities.”
Environmental groups have brought the fight over methane regulation to the court system, hoping to slow President Trump’s push for deregulation. The House and Senate are still grappling with healthcare and taxes, with little progress visible yet. President Trump is also taking unilateral action to protect domestic steel, which could cause international problems.
Leaders in the House and Senate are increasingly being pressured to shorten or cancel the August legislative recess to focus on delivering legislative promises to their districts. As those talks stall, Brexit negotiations begin and economic indicators continue to come in strong.
Faculty Affiliate Michael Useem comments for the Washington Post on the unprecedented departure of Uber CEO Travis Kalanick without a plan for his replacement.
“They’re going to go nuts if they don’t have a final arbiter,” he said. “It’s like Management 101… . Nothing runs without one person at the top. Nature abhors a power vacuum.”
President Trump signed his executive order promoting apprenticeships in the U.S. The Senate is trying to work in a more bipartisan fashion. Both consumer sentiment and U.S. exports to Mexico are down.
Faculty Affiliate Olivia Mitchell comments on the juxtaposition of General Electric’s $45 billion in stock buybacks in recent years to their growing pension liabilities.
“It’s a clear tension. Buybacks clearly use assets available not to fund the pension promise but to make shareholders happy.”
The Federal Reserve continues to have a rosy outlook for the economy, largely driven by strong indicators in the labor market. The Senate overwhelmingly passed a bill to impose sanctions on Russia. President Trump announces changes to the U.S.-Cuba relationship.
Faculty Affiliate Professor Howard Kunreuther writes an op-ed for Knowledge@Wharton discussing the American Health Care Act and the National Flood Insurance Program in an effort to explain this.
“Elected representatives on both sides of the aisle continually espouse the principle of fairness across a wide range of issues, including trade, tax reform, and jobs.”
The Senate is considering not cutting all taxes associated with Obamacare. The Interior Department is also considering delaying implementation on a rule meant to cut methane emissions. It is also becoming more clear that the Federal Reserve will raise rates and that the slight drop in consumer spending earlier in the year was just temporary.
The future Janet Yellen’s position is unclear at the moment, with President Trump’s longtime advisor Gary Cohn being chosen to lead her replacement effort. Although Trump criticized Yellen during the campaign, he has praised her since becoming President. Professor Peter Conti-Brown believes this is short lived.
“The minute that ‘Morning Joe’ has a report about a Fed action that could harm Donald Trump, set an egg timer and see how long before he tweets,” he said.
Pennsylvania Governor Tom Wolf signed legislation that would restructure future public employee’s pension plans to be solvent. The plan does not fix the current shortfall, however, as it only affects future employees.
Faculty Affiliate Olivia Mitchell commented, “The fact that they have to reform for all future hires means that, eventually, and very eventually, there will be some relief. However, the current defined benefit plan is underfunded and is not fixed by that reform.”
As Uber faces increasing pressure and changes, especially in light of CEO Travis Kalanick’s leave of absence, Professor Kevin Werbach comments on how the company could rebound.
”One possible strategy to improve its image would be to pay drivers more and scale back its losses. That would mean higher prices for riders.”
As Republicans are starting to feel emboldened by insurers leaving ACA marketplaces, top health care groups are opposing their House bill. Unrelatedly, the Treasury believes that the government will be funded through September, but fails to give specifics and the proposed “border adjustment tax” may get a phase-in period.
Apprenticeships are going to a centerpiece of President Trump’s plan to fill record levels of open jobs in the U.S. economy. The Consumer Financial Protection Bureau is expected to lose some of its power in the wake of a recent Treasury report.
Radio Sputnik interviewed Faculty Affiliate Professor Mauro Guillen on the issue. Numerous reports have stated that the President is reconsidering some of the Obama Administration actions to foster a relationship with Cuba.
Professor Guillen acknowledged that things would be changing but stated, “in the long term, there’s no other solution for the two countries than to be on good terms.”
Faculty Affiliate Howard Kunreuther, Ph.D., and his co-author Robert Meyer write in Psychology Today about their research on natural disasters and the psychology behind a lack of preparedness.
They write, “people resettle in floodplains, stock market crashes come in cycles, and careless drivers suffer repeated crashes. Each time such an event occurs, one hears pledges to take steps to ensure that the adverse event never occurs again, but inevitably it does—something routinely attributed to short memories.”
Professor Kevin Werbach, a faculty affiliate, discusses the potential of blockchain and smart contracts with Knowledge@Wharton and Professor Nicolas Cornell, from the Legal Studies department.
He explains, “a smart contract, in theory at least, takes away the legal system entirely. Now there is nothing but that digital agreement. That is the entirety of the relationship, and everything from the negotiating of the agreement, all the way to the full enforcement and clearing of the agreement, happens digitally.”
Faculty Affiliate Professor Katherine Milkman’s new findings on ‘nudges’ were published in Psychological Science, offering a low-cost, high-reward strategy for intervention in government. Nudges encourage certain behaviors - like retirement saving, college enrollment, energy conservation and more - without limiting the options available to the individual.
She states, “The changes in behavior produced by nudges tend to be quite cost effective relative to those produced by traditional policy tools – so there is a big opportunity to use nudging more widely in government in conjunction with traditional policy tools.”
U.S. Household income grew to almost $95 trillion, with rapid expansion in Q1 2017. Trade for April, however, dropped, as did the pound against the dollar. The Fiduciary Rule, written to protect those saving for retirement, also partially went into effect.
Faculty Affiliate Ann Harrison comments on the problems with focusing on manufacturing over service jobs for the United States. She is the author of The Factory-Free Economy.
Discussing the potential for emerging economies’ workforces, she says there is “a lot of supply for the actual manufacturing, but not a lot of supply for creating the next Google or Apple.”
Many wealthy Americans are deferring tax expenses to 2018 in anticipation of lower taxes following tax reform this year. This may cause the U.S. to hit the debt ceiling earlier. Unemployment is also down, with the U.S. economy seeing very low jobless claims. Further, the ECB is expected to stop cutting rates, with the economy in Europe improving the most since the recession in 2008.
Professor Tom Baker, a Faculty Affiliate, argues that financial advisory roles can be replaced by non-partial robots.
He states, “I’d find it much harder to imagine what happened at Wells Fargo that you would program a computer to do what its people did because you’d have to consciously do that. They gave people bad incentives and had weak controls, which is different than programming computers to rip customers off.”
Professor Eric Orts, a Faculty Affiliate from the Legal Studies and Business Ethics Department, discusses climate change on “Radio Times.” He detailed the Paris climate agreement and the effect of leaving it.
His counterpart, Michael Oppenheimer from Princeton University, explained, “It used to be in your face. I’m old enough to remember when the air was dirty where I lived in New York City. You could taste it. You could feel it.”
The White House invited transportation groups to discuss tax reform. The EPA delayed enforcement for a rule meant to curb ozone pollution. Job openings stand at 6.04 million, the highest ever recorded, while the housing market is shutting out young people.
The Penn Wharton Public Policy Initiative’s study, “The Business of Voting,” was heavily cited in a recent article highlighting that small elections technology companies were hacked in the weeks preceding the U.S. Presidential election in November.
Professor Lorin Hitt, who led the research process said, “the industry that provides the hardware and software for the election process has been scarcely studied and often is opaque.”
The White House is entering the second phase of their tax reform plan while also running into a few signs of opposition regarding infrastructure. The World Bank measured fast economic growth, but with signs for concern and the Department of Labor is looking for unique ways to cut costs.
The U.S. has added oil rigs for the past 20 months and productivity has been revised up for Q1 2017, good signs for the economy. The White House is unveiling parts of their infrastructure plan this week, as well, which should attract bipartisan support. Dodd-Frank is also expected to be repealed in the House, but its future in the Senate is unclear.
Knowledge@Wharton interviewed Faculty Affiliate Mauro Guillen and Stephen Szabo, executive director of the Transatlantic Academy, about Germany’s relationship with the United States. The conversation touched on issues surrounding NATO, trade, and the eurozone.
Professor Mauro Guillen discussed the changing relationship between Europe and the U.S.: “this is indicative of the times that we are living through in the sense that the outcome of certain elections… have called into question longstanding relationships in the world…. My concern is that we are not having an in-depth debate about the pros and cons of continuing with the current system.”
As the FCC looks to change network neutrality rules in favor of lighter regulation, the D.C. Circuit Court is likely to play a major role.
Faculty Affiliate Kevin Werbach comments on speculation about how the FCC might rule, “policymakers don’t have the luxury to make decisions based on how they believe the court should have ruled.”
Bloomberg finds that the answer is no. Using the research of Faculty Affiliate Ethan Mollick and firsthand accounts, the publication details how VC firms may be overlooking female founders.
Professor Mollick’s research found that “two-thirds of women thought a [crowdfunding] project was better when told it was created by a man than the project created by a woman, even when it was exactly the same project.”
Faculty Affiliate Susan Wachter weighs in on how the elimination of the mortgage-interest deduction could affect housing prices. While removing the deduction would likely cause a drop in prices, overall tax cuts would stimulate demand.
“Income after taxes is the most important factor for housing demand,” she says.
Professor Cary Coglianese comments on President Trump’s recent plan to withdraw from the Paris climate agreement. The agreement was signed by the Obama Administration with the intention of slowing the effects of climate change.
“Withdrawing from the Paris agreement is hardly going to create jobs in the U.S. While specific environmental regulations can sometimes lead to job losses, they also can and do lead to job gains — with the result being roughly a wash.”
While it is often assumed that older workers are less entrepreneurial and less active in knowledge-based jobs, that is not what recent studies have shown. Faculty Affiliate Professor Peter Cappelli comments on the disparity between the effectiveness of older and younger workers.
“Older employees soundly thrash their younger colleagues. Every aspect of job performance gets better as we age. I thought the picture might be more mixed, but it isn’t. The juxtaposition between the superior performance of older workers and the discrimination against them in the workplace just really makes no sense.”
States and municipalities, led by California, are committing to fighting climate change as the U.S. has announced its withdrawal from the Paris Climate Accord. Gov. Jerry Brown has created a coalition with the intention of meeting the goals previously agreed upon. Further, Elon Musk and Robert Iger have left President Trump’s business advisory council over his decision. Additionally, unemployment is at its lowest levels since 2001, although labor force participation is also down. The U.S. trade deficit also widened in April.
Representative Marsha Blackburn has proposed a new bill that would reinstate under more strict terms the consumer protections that were stripped by a previous bill this year. Those following FCC rules and internet privacy rights were surprised by the move.
Professor Kevin Werbach comments, “it’s either an insignificant political stunt or a turning point in internet regulation.”
Faculty Affiliate Professor Chris William Sanchirico reviews the literature on policy tools for redistributing wealth.
The Law Professor Blogs Network states that his work “provides important background and insights into the evolving, and crucial, debate over the design of a fair and efficient tax system.”
The White House has disagreements with Treasury over whether an increase in the debt ceiling should be paired with spending cuts. Trump officially announced his intention to leave the Paris climate agreement, as well. The U.S. added more jobs than expected last month, however jobless claims were also above expectations. Construction spending eased in April, but is still up 5.8% from 2016.
In a biographical piece on Cecil Exum, Marriott’s longest serving employee, Professor Peter Cappelli comments on how unique the 79-year-old is in today’s economy.
“Experienced workers are higher paid, and if you’re trying to save money, you can save more, faster, by getting rid of older workers,” he said. “Fewer people are making it to traditional retirement age with one longtime employer.”
Professor Jennifer Blouin talks with Knowledge@Wharton about U.S tax reform and how it could affect the economy.
“By changing our system, whether it be through some sort of one-time transition tax and then we move onto a [new] system, these U.S. companies will now have the ability to remit or repatriate this accumulation of roughly $3 trillion of earnings back into the United States.”
President Trump is expected to remove the United States from the climate agreement signed in Paris. The Supreme Court has defined new limits on the rights of patent holders. Credit scores continue to rise in the U.S., hitting new records as inflation stagnates in Europe and the Canadian economy is roaring.
Faculty Affiliate Professor Peter Cappelli comments on the supremacy of investors and how companies pushing more holistic focuses are struggling to find success.
He states, “the investment community seems to object to being nice to employees. It’s a reminder that, in the corporate world, things are constantly yielding to the finance guys—whether they know what they’re doing or not.”
Tax reform is next on the agenda for Congress and the White House and the details are beginning to prove difficult. The GOP has a variety of options to complement their proposed tax cuts, but the approaching debt limit may slow progress. The ceiling may also affect the policies of the Federal Reserve, which may now hold off on raising rates in June. All this as consumer spending is up, inflation is down, and oil prices continue to stay low.
During the 2016 election and the following months, the Dodd-Frank Act received a lot of attention from Republicans and Democrats alike. While the parties disagree over the necessity of the Dodd-Frank Act, there is no doubt that it has strongly impacted the banking and financial services industry. As the act comes under fire from President Trump and Congressional Republicans, the main question now is whether this transformation is permanent, or as many current Republicans have promised, just a temporary blip in the history of banking regulations.
As President Trump’s first trip abroad begins to wrap up, NATO leaders are left with disappointment after the President failed to reaffirm the United States’ commitment to Article 5, the mutual defense pact of the alliance. Meanwhile, domestically, GDP has been measured to have grown at 1.2% last month, consumer sentiment is up, and durable goods orders ticked down. The Senate is also considering healthcare reform, with a debate over preexisting conditions taking center stage.
The Congressional Budget Office (CBO) has completed its summary of the revised GOP healthcare bill and found that it would leave 14 million more Americans uninsured in 2018 and as many as 23 million more without insurance in 2026. This as the Labor Department has found that the market is still strong, with jobless claims at their lowest levels since 1973. Trade data from April was also released, showing a widening deficit.
Faculty Affiliate Howard Kunreuther comments on why we underprepare for natural disasters as California is overdue for an earthquake on the San Andreas Fault.
“The challenge really is we are myopic,” he says. “We focus on the short run and as a result don’t really think about any kind of long-term decisions … about how we prepare.”
The Federal Reserve decided not to raise rates today due to the slowdown in consumer spending that took place earlier in the year. The Fed believes that the economy is still healthy, however, and may decide to raise rates in June. Meanwhile, the President’s budget is being further analyzed. Massive cuts to Medicaid and food assistance programs coupled with increases in spending on Defense and border security define the budget, but it is receiving criticism for overly optimistic economic growth assumptions.
Amazon’s expansion into brick and mortar retail outlets is commented on by Faculty Affiliate Professor Barbara Kahn. She discusses how Amazon’s retail locations are differentiated from their competitors’.
“What [Amazon wants] to do to be efficient is to have the consumer take control of that last mile,” Kahn said. “If you can make it convenient for the customer to pick up the groceries, then they’re handling the last mile.”
The GOP is looking ahead at tax reform cautiously after running into roadblocks with the American Health Care Act. Meanwhile, their colleagues in the Progressive Caucus are planning to release an infrastructure plan with more direct spending than the anticipated White House plan. The White House’s budget proposal is also facing scrutiny from many economists while the Federal Reserve is gauging the health of the economy before its June meeting.
Professor Ethan Mollick discusses the unpredictable and complex process of crowdfunding and the consulting companies that have sprung up to service it.
“Anyone who tells you they know is wrong. I cannot find any factors that predict virality and I’ve got all the data,” said the creator of the Wharton Crowdfunding Survey.
The CMS said it would allow people to bypass HealthCare.gov in order to buy an ACA-approved plan for 2018. Individuals will be able to get coverage directly from a broker or an insurer’s website instead of having to go through the federal marketplace, the CMS announced.
“If this works very well, there will be proposals to shrink or eliminate HealthCare.gov,” predicted Faculty Affiliate Mark Pauly, a health economist at the Wharton School of the University of Pennsylvania.
Many commentators suggest that gender diversity in the corporate boardroom improves company performance because of the different points of view and experience it offers. However, the results of numerous academic studies on the topic suggest that the presence of more female board members does not much improve — or worsen — a firm’s performance.
Faculty Affiliate Katherine Klein summarizes academic research on the topic and discusses the possible reasons and implications for these surprising findings.
Faculty member Cary Coglianese writes with David Lehr, a Penn Program on Regulation research fellow, on how artificial intelligence and computer algorithms could make government more efficient, fair, and transparent.
“Governments may soon undergo their own data revolution and find ways to use machine learning to support smarter public sector decision-making by administrative agencies—potentially even replacing certain human decisions.”
As the FCC considers rolling back net neutrality rules, Faculty Affiliate Kevin Werbach, an associate professor of legal studies at Wharton and former FCC adviser, comments on how these changes will impact the telecommunications industry.
“There are now no rules governing what ISPs can do with your data, and that’s something this FCC has endorsed,” he says.
Research from Faculty Affiliate Jeremy Siegel shows that inflation can truly impact investor returns, especially for consumer investments for retirement funds. Siegel tracked the average returns for stocks, bonds, bills, gold, and the dollar, between 1802 and 2012, showing that inflation really shrinks one’s results. Ignoring its effects puts you at risk of not having saved enough for retirement.
Police in Durham are preparing to go live with an artificial intelligence (AI) system designed to help officers decide whether or not a suspect should be kept in custody.
“To some extent, what learning models do is bring out into the foreground hidden and tacit assumptions that have been made all along by human beings,” warned Faculty Affiliate Cary Coglianese, a political scientist at the University of Pennsylvania who has studied algorithmic decision-making.
“These are very tricky [machine learning] models to try and assess the degree to which they are truly discriminatory.”
GOP Must Agree on Budget Before Advancing Tax Reform; Democratic lawmakers ask to meet with Ivanka Trump to discuss women’s healthcare issues; U.S. Jobless Claims Fell for Third Straight Week; Conference Board’s Leading Economic Indicators Index Rose Again in April.
House lawmakers have passed a bill aimed at helping state and local law enforcement officials combat cyber crime; GOP senators are gearing up to shape negotiations over competing ideas from the House and administration and put their own stamp on U.S. tax policy; Senate Republicans are coalescing around the idea of giving more generous subsidies to lower-income and older people than what’s laid out in the House-passed GOP healthcare reform bill; Nearly a third of U.S. cities and their suburbs haven’t regained all the jobs they shed during the last recession.
The Pacific Agreement for Closer Economic Relations (PACER) Plus revisits an original PACER agreement signed in 2001. This original PACER agreement existed as Australia and New Zealand’s response to the Pacific Island exclusive Pacific Island Countries Trade Agreement (PICTA), also signed in 2001, in an effort to include themselves in a free trade agreement with the region. Since April 20th of this year, Fiji and Papua New Guinea have refused to sign the finalized agreement, indicating that regional interests have not been equally represented.
As Spain’s economy is on the road to recovery, Italy’s Atlantia SpA announced on Monday a 16.34 billion-euro ($17.9 billion) bid for Abertis Infraestructuras SA to create the world’s biggest toll-road operator, a deal that may be the largest takeover of a Spanish company in a decade.
Atlantia’s offer is “a vote of confidence in Spain and shows how the country’s companies are now becoming anchored in the global economy,” said Faculty Affiliate Mauro Guillen, a professor of management and international relations at the University of Pennsylvania’s Wharton School.
As Direct-To-Consumer advertising for pharmaceutical medication increases, experts wonder whether the cost of running these ads is better allocated towards providing medicine to more patients, and whether these ads deceptively seem to make niche medicines applicable for a wider range of conditions. Faculty Affiliate Mark Pauly comments on these changes.
Dozens of Republican lawmakers are raising concerns or say they are undecided on Paul Ryan’s (R-Wis.) proposed tax on imports; The Trump administration is working on actions it can take without Congress to fight high drug prices; The Trump administration say their economic policies can deliver 3% to 4% growth year after year.
House Budget chair pushing for changes to Medicaid payments; Housing Sales Increase in First Quarter at Fastest Pace in a Decade; Trump Administration faces obstacles to goal of 3% annual economic growth.
Sen. John McCain (R-AZ) wants to slow the Senate’s approval of Trump’s plan to renegotiate NAFTA; Import prices advanced 0.5% in April, after ticking up 0.1% in the prior month; European Central Bank (ECB) President Mario Draghi defended the central bank’s monetary stimulus before Dutch lawmakers; Chinese producer prices cooled more than expected in April in a sign that the country’s manufacturing sector may be losing momentum.
White House officials enlisted Canadian Prime Minister Justin Trudeau to convince Trump to not withdraw from NAFTA; Review of Dodd-Frank financial reform to occur in stages; EPA seeks governors’ input to rewrite Obama water rule; NFIB Small Business Optimism Index Near Record Levels in April; Wholesale Inventories Gain 0.2% in March.
Faculty Affiliate Jeremy Siegel comments on the stock market’s upward movements, and whether or not he believes this high value environment is here to stay.
Siegel believes this “Goldilocks” environment of “low interest rates and great earnings guidance, and the rest of the world beginning to take off … is a perfect environment for stocks.”
A group of Senate Republicans is pushing a bill to eliminate the controversial Obama-era net neutrality rules, but their effort faces tough odds; The action on Affordable Care Act repeal and replacement now turns to the Senate; President Donald Trump is flirting with tax and spending plans that could widen the budget deficit; Hiring increased in April, and the unemployment rate fell to its lowest level in a decade.
The latest tax reform proposals outlined recently by the Trump administration have caused much discussion, especially due to an absence of details and a lack of revenue raisers.
“The biggest economic weakness of the Trump plan was the enormous level of debt it produced, which crowds out private capital formation,” said Faculty Affiliate Kent Smetters. Faculty Affiliate Michael Knoll, co-director of Penn Law’s Center for Tax Law and Policy, also noted that the proposals have “almost nothing in terms of revenue raisers, and a lot of cuts.”
Compliance oﬃcers, who try to keep financial firms out of trouble, are spooked by the tone coming from the White House.
Faculty Affiliate Michael Useem comments on the change in tone, saying that words alone don’t change rules, “but when repeated, promoted, articulated, in a whole variety of communication channels, it does affect the tone in the middle.” He went on, “The tone at the top right now coming from Washington may be sending a corrosive message on compliance, ethical behavior, and so on. I think it probably is, but we are going to have to wait and see.”
Faculty Affiliate Dan Polsky, director of the Leonard Davis Institute, spoke on the Wharton Business Radio’s “The Business of Health Care” program on Sirius XM 111 on why physician leadership has been lacking in the past and why physician leaders have recently begun to step up.
Faculty Affiliate Ann Harrison commented on the hot button issues of trade and globalization in this article for Bloomberg View:
“The idea behind globalization is the winners, the exporters, the consumers, are so much richer that it is easy and straightforward to redistribute some of the winnings to compensate the losers. That turned out not to be true.”
“Our package for helping the losers, Trade Adjustment Assistance, helped only about half those that it should have helped,” Harrison continued. “But, much more important than that, Americans do not want handouts. What they really want are jobs.”
House Passes Legislation to Repeal and Replace the Affordable Care Act; Senate passes $1.1 trillion funding bill Thursday to avert government shutdown, following House bill; House Financial Services Committee approved bill to rewrite Dodd-Frank; U.S. Economy Adds 211,000 Jobs in April; U.S. Trade Gap with Mexico Widens with Weak Peso.
The House of Representatives voted 309-118 on Wednesday to pass a budget bill to fund the government through September 30, a step toward avoiding a federal shutdown on Saturday; The House of Representatives is set on Thursday to again attempt to repeal and replace the Affordable Care Act; The goods and services trade deficit was $43.7 billion March, down $0.1 Billion from February; Initial jobless claims declined by 19,000 during the week ending April 29 to total 238,000 from the prior week’s unrevised level of 257,000, reflecting continued labor market stability.
The Trump administration is preparing to replace Comptroller of the Currency Thomas Curry, an Obama appointee, as chief regulator of federally chartered banks, with the expiry of Curry’s five-year term in April; The Federal Reserve Open Markets Committee (FOMC) held rates constant following its May meeting; Economic activity in the non-manufacturing sector grew in April for the 88th consecutive month; Private payrolls added 177,000 jobs from March to April; U.S. crude oil inventories decreased by 0.9 million barrels last week as total crude reserves stood at 527.8 million barrels, near the upper limit of the average range for this time of year.
Also, ISM Manufacturing Index Decreased to 54.8 in April from 57.2 in March; U.S. Consumer Spending Rises After Accounting for Inflation, While Prices Drop in March.
The advent of the Internet has led to the proliferation of technology startups in the United States, be it Uber, AirBnb or Snap. With buzzwords like “block chain”, “sharing economy”, “3D-printing”, “artificial intelligence”, “gene therapy” and more, it appears we live in an age of perpetual innovation and entrepreneurship. However, the pace of innovation in the United States, by some metrics, has stagnated over the last decade.
Senate passes stopgap funding to avoid government shutdown; Trump signs executive order to undo former President Obama’s limits on offshore oil and natural gas drilling; U.S. GDP Growth Slowed in First Quarter Amidst Tepid Consumer Spending; Consumer Sentiment Remains High Despitt GDP Report.
On Friday, April 14th, the Penn Wharton Public Policy Initiative co-sponsored a panel discussion with the American Enterprise Institute exploring the failure of the Republican-proposed AHCA and what may lie ahead for health care reform.
In light of the Trump Administration’s plans to renegotiate NAFTA and their departure from the TPP, we consider the differences between bilateral or multilateral trade agreements moving forward.
Multilateral agreements “have become unwieldy and large,” notes Faculty Affiliate Mauro Guillen, and so bilateral plans can be viewed as more manageable for negotiators and companies that rely on them to gain market access. He added, that bilateral deals, however, “risk treating some countries better than others.”
Faculty Affiliate Mark Pauly comments on the Republican Party’s American Health Care Act and its new amendments. The law’s “essential health benefits” provision was devised to keep insurance to a minimum standard and make it useful for people who need it.
“If they’re going to offer a tax credit for people who are buying insurance, well, what is insurance?” he said, noting that you might end up with the government paying for plans that covered aromatherapy but not hospital care. “You have to specify what’s included.”
Supporters of net neutrality rules knew they were in for a fierce debate when their leading opponent, Federal Communications Commission chairman Ajit Pai, scheduled a speech on the issue for this week. Pai’s efforts to dismantle net neutrality rules were greatly supported by the Republican party and AT&T, Verizon, and Comcast, three of the country’s largest Internet service providers, have all issued statements supporting Pai’s efforts.
The move to create a deep partisan divide over net neutrality troubles Faculty Affliate Kevin Werbach, a professor at the Wharton School at the University of Pennsylvania who worked on Internet issues at the FCC during the Clinton administration in the 1990s and comments in this Fortune article.
For the first time in a decade, more new U.S. households in the first quarter chose to buy homes than to rent, suggesting a long-term decline in homeownership rates might be coming to an end.
Faculty Affiliate Susan Wachter, however, is among those who predict the homeownership rate could fall closer to 50% by 2050.
President Donald Trump is set to unveil his proposal for comprehensive tax overhaul on Wednesday; Commerce Secretary Wilbur Ross said the Trump administration is considering launching trade actions to protect the U.S. aluminum, semiconductor, and shipbuilding industries; U.S. crude oil inventories decreased by 3.6 million barrels last week as total crude reserves stood at 528.7 million barrels.
Democrats introduce bill to create climate change bond program; U.S. home-price growth increases at fastest rate in nearly three years; New home sales rise to 8-month high; U.S. consumer falls according to Conference Board Index, yet confidence still remains high.
“Why is China going all-in on cleantech? And why did it recently condemn U.S. policy as “irresponsible and very disappointing,” but also vouch to stick to its own pledges?”
Faculty Affiliate Arthur van Benthem asks and answers questions about China’s rapid investment in a cleantech future as the United States moves towards opposite regulation.
“Green energy is a perfect fit for Trump’s agenda to bring back long-lasting jobs and infrastructure to left-behind places. If only he were to realize this himself.”
On Monday, March 27th the Penn Democrats and the Penn Wharton Public Policy Initiative welcomed former Senator Ted Kaufman. He spoke about his involvement in the Dodd Frank Wall Street reform, policy work on the Foreign Relations, Armed Services, Judiciary, and Homeland Security Committees, and his vast experience running a Senate office.
“Despite what you might hear from political pundits these days, the H1-B program isn’t about immigration. It’s about temporary workers, and a new study finds that bringing in foreign workers slows down the process through which the U.S. labor market adjusts to new demands.”
Faculty Affiliate Peter Cappelli writes on the politics behind the skilled immigration visas so hotly debated: “smart-thinking pundits like to point out how government intervention distorts markets, preventing the adjustments that are necessary. Isn’t that true here?”
President Trump’s nominee to lead the Department of Justice’s antitrust division, Makan Delrahim, is heading before a Senate panel; Mortgage rates dropped below 4% for the first time since November, providing more kindling to an already hot housing market as the crucial spring selling season gets under way; Emerging-market companies are bringing on U.S. dollar debt and that could become a source of trouble in some parts of the world if growth slows.
On April 4th, the Mack Institute for Innovation Management and the Penn Wharton Public Policy Initiative hosted a talk on the Delaware Blockchain Initiative, a joint venture between the State of Delaware and Symbiont—a blockchain technology provider—to develop a suite of programs promoting the use of distributed ledger and smart contract technologies by Delaware-incorporated businesses.
In American public discourse, charter schools remain a highly controversial and politicized issue. Those in favor, such as Senator Cory Booker, Harvard economist Edward Glaeser, and Success Academy founder Eva Moskowitz, point to charter schools as a welcome alternative to the mismanagement of public schools. Many others, including both NYU Professor Diane Ravitch and former Philadelphia School Reform Commissioner, see charter schools as beneficial for few but detrimental to many others.
Trump, who had campaigned on a promise to save U.S. jobs by getting tough on trade deals, seems to have learned that global commerce is hardly a silo. Pulling on one end of the economy inevitably impacts the other, sometimes in unexpected ways.
“You cannot change the global economy just because you want to change it,” said Faculty Affiliate Mauro Guillen, a professor of management at the University of Pennsylvania’s Wharton School. “These are complicated issues.”
Since the conclusion of World War II, the United States has maintained largely unquestioned global hegemony, in part due to the vast technological and organizational superiority of its armed forces. The specter of American military might has long cast a protective shadow over the United States and its allies, limiting the inclination of foreign governments and agents to provoke the ire of American weaponry. Military innovation, however, hasn’t been a chance occurrence; whenever potential foes develop advanced military capabilities, defense leaders have pursued “offset strategies” to foster innovation and secure U.S. superiority.
As the new head of the FCC seeks to roll back Obama era rules, the issue of net neutrality becomes, once again, intensely debated.
Faculty Affiliate Kevin Werbach argues that the logical answer to this legal conundrum would be for Congress to come to a simple, bipartisan agreement. That is unlikely, given other legislative priorities such as health care and corporate tax, but in a less partisan universe, Republicans and Democrats would have little problem finding common ground on the subject, says Kevin Werbach of Wharton, a business school at the University of Pennsylvania.
The current rules have had no discernible negative impact on the companies, notes Professor Werbach.
Undocumented immigration and the state of border control have always been politically relevant topics. However, given U.S. President Trump’s campaign focus on border security, the issue has garnered special national attention this past election cycle. The population of undocumented immigrants has risen steadily over recent years, remaining the same from 2009 to 2014 at 11.1 million and accounting for roughly 3.5% of the total US population. 
Donald Trump has made no secret of his intentions to shake up American relations with the world. Verbal exchanges, including a tweet from the President’s first week in office that prompted Mexican President Enrique Peña Nieto to cancel their first meeting as heads of state, have brought the historically strong relationship to a tremendous low.  However, proposals from the Trump administration have officials from both states concerned about more than just words. Trump’s executive order for “the immediate construction of a physical wall on the southern border” and a proposed 20 percent tariff on all imports from Mexico will have serious effects on production and trade in North America.
During his recent presidential campaign, Donald Trump showed support for what he calls “auditing the fed,” which shined a new spotlight on a contentious bill proposed in 2015 by Senator Rand Paul known as “Audit the Fed.” Now, with Trump in the White House and Republicans in control of the House and Senate, the bill and the question of the Fed’s independence have returned to the forefront of national discussion. Here we investigate the arguments supporting the Audit the Fed bill, the current state of the Fed’s independence, how the bill could affect that independence, and the resulting economic consequences.
The U.S. Supreme Court will hear arguments on Wednesday in a case regarding the constitutionality of appropriating taxpayer funds to religious entities; Justices Grill SEC Over Limiting Power to Make Wrongdoers Give Back Gains; U.S. crude oil inventories decreased by 1.0 million barrels last week as total crude reserves stood at 532.2 million barrels.
“The United States must treat cybersecurity as one of the most important national security challenges it faces.” This was the central finding of a 2008 report from the Center for Strategic and International Studies Commission on Cybersecurity, prepared to inform the cybersecurity policy of the 44th presidency.  Almost a decade later, the integrity of public and private sector network infrastructure is even more crucial to national security.
Trump to overhaul visa program for high-skilled workers; U.S. Housing Starts Decreased 6.8% in March; IMF Increases Global Growth Forecast to 3.5%, Seeing Positive Signals on Global Investment, Manufacturing and Consumer Confidence.
What differentiates the financial success stories from the others turns out to be exposure–in school or the workplace–to financial education, says WSJ Wealth Expert Olivia Mitchell of the Wharton School.
“As the U.S. economy moves into a higher-interest rate environment, this will deeply challenge the rising number of Americans who hold more debt and are more financially fragile than ever before. Enhancing financial knowledge across the board can reduce wealth inequality and relieve much financial stress in this do-it-yourself world.”
As China shifts its growth engine from the industrial to the service sector, US companies are exploring new growth points.
While China is developing a consumption-driven economy, many sectors such as logistics services will improve to better serve Chinese consumers, said Faculty Affiliate David Bell during a visit to Shanghai Jiaotong University last month.
“Despite philosophical differences that will continue in the years to come, most scholars of business ethics agree that corporations should be doing more to create a culture where bad behavior is neither condoned nor ignored, and where misdeeds are not covered up but are attributable to both individuals and organisational factors. Better appreciation of moral responsibility in firms will allow managers to structure internal incentives, rules and policies to achieve the economic objectives of firms in an ethical manner. It will also help in providing an appropriate external legal framework to encourage good business conduct.”
Eric W. Orts writes for INSEAD on corporate ethics, and what can be done to combat the firm’s bad behavior.
In 1983, against the backdrop of accelerating globalization and capitalism throughout the world, the National Commission on Excellence in Education released a landmark report “Nation at Risk”, highlighting the gross inadequacies of the United States’ education system. This sparked a wave of neoliberalism in the education policy sphere and ultimately led to the passage of the No Child Left Behind (NCLB) Act of 2002. It introduced mandatory standardized testing, stricter state accountability systems, and higher teacher qualification requirements. Today, the debate on the NCLB Act remains as polarized as ever.
Last month, Congress voted to repeal landmark online privacy rules written by the Obama administration. The rules, which were scheduled to take effect this year, required Internet service providers (ISPs) like Comcast, AT&T and Verizon to get permission before collecting and sharing customers’ online information.
Faculty Affiliate Kevin Werbach weighs in on what the repeal means for everyday Philadelphians and what Internet privacy might look like a few years from now. He also tells us why the repeal puts Comcast in the best position compared to all of the other telecom giants.
President Trump is slated to pick a former top U.S. Treasury official to serve as the Federal Reserve’s vice chairman of supervision; The Federal Reserve is moving quickly to fill in the details of how it will wind down its securities holdings in the years ahead; Households, businesses and investors started the year expecting economic growth, but the same euphoria has not seemed to translate into broad economic gains.
Do alternative financial service providers merit their reputation as rip-off artists? Why do their customers choose to remain “unbanked?”
To better understand how these businesses operate and why people choose to patronize them, Faculty Affiliate Lisa Servon took a break from teaching at the University of Pennsylvania to work as a teller in the South Bronx and Oakland. She discovered that traditional banks are neglecting the poor and bilking the middle class, leaving payday lenders and check cashers to fill a crucial need.
Her new book, The Unbanking of America: How the New Middle Class Survives, a first-hand account of what may be America’s most widely misunderstood industry, explores why many people benefit from using non-traditional services with a negative stigma.
She found that individuals preferred check cashers and payday lenders due to lower costs than using a bank, more transparency about their funds and fees, and better people to people service. “We need to unpack this whole category of unbanked people, or subprime people, and look at the specific populations within those larger categories,” she said.
White House signals new direction on tax reform; U.S. financial markets are closed in observance of Good Friday; U.S. Retail Sales Decrease for Second Straight Month; U.S. Consumer Price Index Measuring Inflation Fell 0.3% in March compared to 0.2% expected increase.
Trump to lift Federal hiring freeze; U.S. import prices recorded their biggest drop in seven months in March as the cost of crude oil declined; U.S. crude oil inventories decreased by 2.2 million barrels last week as total crude reserves stood at 533.4 million barrels, near the upper limit of the average range for this time of year.
“Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”
- John Maynard Keynes
Rural areas comprise one quarter of America’s population but represent one third of the nation’s poor.  As a result, rural areas consistently poll as having poorer mental health compared to urban areas. Although the prevalence of mental illness remains quite constant between urban and suburban regions, the states of mental health care differs significantly between the two.
The Trump administration considers repealing former President Obama’s 2015 ozone pollution rule; President Trump is starting over with his tax plan; U.S. hiring slowed but broader trends suggest slack in the labor market is disappearing, leaving the Federal Reserve on track to keep raising interest rates.
Centrist Republicans in the Senate are still expressing resistance to revisions to Affordable Care Act repeal legislation; Private sector employment increased by 263,000 jobs from February to March in April’s reading of the ADP National Employment Report; U.S. crude oil inventories increased by 1.6 million barrels last week.
Research from Faculty Affiliate Olivia S. Mitchell explores the option of a deferred annuity instead of typical 401K payouts for retirees.
Lawmakers on Tuesday voted to overturn privacy rules that required telecom companies to get customers’ permission before sharing their web-browsing and app usage history with third parties. The White House said Wednesday President Donald Trump intends to sign the measure into law.
So what’s next for large wireless providers? “They could conceivably sell to the highest bidder someone’s browsing history, but it’s not clear that that would fly as a business model,” said Faculty Affiliate Kevin Werbach.
Faculty Affiliate Olivia S. Mitchell comments on how American companies are trying to stop employees from raiding their 401(k)s, in an attempt to ensure that older workers can afford to retire and make room for younger, less-expensive hires.
The new Republican health proposal would undermine coverage for pre-existing conditions; U.S. trade gap shrinks as exports increase; U.S. factory activity continued to expand in March.
Despite heavy rains and snowfall last winter, the water issues in the western United States have not been resolved for the long term. Groundwater tables are still low after being relied upon heavily during the previous drought years. The underlying legislative and infrastructural conditions prior to the drought have not changed. A sustainable, free-market solution, addressing future water crises could be a market for water trading. Instead of the government allocating water resources, water trading incentivizes and monetizes water conservation on the demand side while also helping water get to where it is most needed .
Is a traffic tax the solution to congestion in cities? Not necessarily, according to research from Faculty Affiliate Professor Gilles Duranton. He recently spoke to Knowledge@Wharton about the findings of his study, which is being funded by the Mack Institute for Innovation Management.
The president is expected to soon sign a bill that would block Internet privacy protections after Congress approved the change this week. And the Federal Communications Commission under Trump-appointed chairman Ajit Pai, a former lawyer for Verizon, has moved to rapidly to undo rules and decisions that major telecommunications carriers oppose.
Faculty Affiliate Kevin Werbach comments on Pai’s role in the deregulation of tech and the many changes to come. “He’s a good enough lawyer to understand that the FCC can’t just switch sides on an issue because someone new is in the White House–they’ll be overturned in court,” Werbach says. “So he’s trying to get Congress to move first.”
Recently, eyes have been turned towards North Korea, especially in light of recent actions taken by its closest ally; China. Following a series of weapons testing throughout 2016 and early 2017, many nations issued sanctions on North Korea.  However, it remained unclear whether the Chinese authorities, who enjoy a close relationship with Pyongyang, would follow suit. By banning the importation of North Korean coal in March 2017, Beijing made a decision that indicates a radical change in its attitude towards North Korea.  China’s previous ambivalence and hesitance to act has morphed into increased support for the UN’s position on North Korea and a stricter response towards North Korean aggression.
The American Enterprise Institute and the Penn Wharton Public Policy Initiative are pleased to co-present a special two-part program examining the first 100 days of the Trump Administration.
“Despite exaggerated claims, regulatory costs are usually a very small portion of many companies’ cost of doing business,” says Faculty Affiliate Cary Coglianese. He continued: “supply and demand are the fundamental forces driving markets, regulation is relatively trivial.”
The Supreme Court will not pause a case concerning the Obama administration’s Clean Water Rule in a rebuke to the Trump administration; President Trump will sign a bill eliminating privacy rules that would have given consumers a greater say in what internet providers can do with their data; A recent report from the NY Federal Reserve Bank finds that Americans continue to default on student loans at a “stubbornly high” rate; Federal Reserve officials are zeroing in on a strategy to begin winding down their $4.5 trillion portfolio of mortgage and Treasury securities.
On March 24, President Trump and congressional Republicans pulled their proposed American Health Care Act before it could come up for a House vote, realizing it was dead on arrival.
However, Faculty Affiliates Mark V. Pauly and Daniel Polsky agree that repealing the legislation isn’t the only way to get rid of it. There are many administrative and budgetary resources at the Trump administration’s disposal should they be determined to run Obamacare into the ground.
The Congressional Budget Office reported on Thursday that the national debt is on track to double over the next three decades; Personal incomes increased by 0.4% in February as personal consumption expenditures rose by 0.1%; Consumer sentiment is holding at its healthiest level in more than a decade; Chinese factory activity levels hit a five-year high in March, according to the country’s National Bureau of Statistics.
Shortly after last year’s dramatic US presidential election - when Republican nominee Donald Trump beat media-projected favorite Democrat Hillary Clinton - allegations of Russia’s hacking involvement in favor of Trump surfaced. US politicians demanded an investigation. Did the act of what people labeled as “cyber-crime” warrant this scale of public backlash? This article will attempt to provide a better understanding of the cyberwarfare scene from a trade and foreign policy perspective. It will conduct a deep-dive into the legislation and economics behind cybersecurity and cyberwarfare using case-studies, and an examination of current trends.
Trump signs Executive Order to Dismantle Clean Power Plan; Trump may consider advancing tax reforms and infrastructure spending bills together; U.S. consumer confidence reaches highest level since 2000; Home prices rise at fastest rate in 31 months in January; US trade deficits decreases sharply in February.
Contrary to the Republican party’s many assurances that the Affordable Care Act is “death spiral” bound, many independent experts predict that the Obamacare exchanges — should the GOP Congress fail to repeal the law as promised — likely will remain stable for many years.
“If nothing else changed they would probably stabilize at a lower level of enrollment,” says Faculty Affiliate Mark V. Pauly, a professor of health care management at the University of Pennsylvania’s Wharton School.
Pauly continued, stating that rising premiums could drive out everyone who isn’t heavily subsidized, but that wouldn’t cause a spiral. “The taxpayers will have to pay more so they could object but that is not what we usually mean by instability,” he says.
House Republicans and the Trump administration announced on Wednesday that they have restarted negotiations on legislation to repeal and replace the Affordable Care Act; Federal Reserve Chair Janet Yellen called for better educational opportunities for low-income communities to benefit the labor market; Pending home sales rebounded sharply in February; U.S. crude oil inventories increased by 0.9 million barrels last week as total crude reserves stood at 534.0 million barrels.
Republican lawmakers are pushing forward on reforming financial regulations with a series of hearings in the coming week; The House could vote as early as the coming week to eliminate the Federal Communications Commission’s 2016 broadband privacy rules; Republicans are heading for a major tax reform bill, however, they could face some difficulties along the way.
Treasury Secretary Steven Mnuchin says White House likely to release tax-reform plan soon; Trump announces Keystone XL pipeline project, calling it “historic”, Rise in aircraft purchases boost U.S. Durable-Goods Orders in February; Census Bureau population estimates reveal American outer suburbs outgrowing cities.
The early 20th century was a crucial point for the development of the Middle East. Prior to 1950, the region exhibited low levels of socioeconomic development; however, the discovery of vast oil reserves catalyzed the rapid creation of wealth. In particular, the economies of oil-rich countries were transformed from largely agricultural to rentier economies. Rentier economies derive a substantial part of their revenue from the outside world, and the accruing of external revenues (also called rents) are allocated and redistributed.
National spending on pharmaceutical drugs, while not the largest component of national health expenditures, has come under scrutiny from politicians on both sides of the political spectrum. Several high-profile controversies over drug pricing hikes have been the subject of public ire, and fingers are often pointed toward pricing as the culprit for increased spending on drugs. Yet pricing is not the only culprit: examined here are possible explanations for increasing pharmaceutical spending, along with an evaluation of several policy proposals.
In November 2008, Ford, GM, and Chrysler—the “Big 3” American automakers—asked Congress for $50 billion to stay afloat and prevent the loss of three million American manufacturing jobs. The firms’ CEOs warned that their bankruptcies could trigger the collapse of the American auto industry and exacerbate the ongoing recession.  Many lawmakers agreed that the looming failure of the Big 3 in the midst of the financial crisis represented a major systemic risk for the fragile economy. But many also feared setting the precedent that the federal government would step in to bailout large, irresponsible firms, especially at such a steep cost to taxpayers. Despite this concern, lawmakers and administration officials ultimately implemented an $80 billion bailout scheme to stabilize the failing automakers. 
How can working from home affect productivity and professionalism?
Research from Faculty Affiliate Lynn Wu finds younger workers without children may not be able to identify on a personal level and assume child-related distractions are unprofessional, she says.
“Working parents are much more understanding, but younger people are not,” she finds. “They thought, ‘that is very unprofessional to take care of your kids and work at the same time’.”
“I think South Korea needs a leader with the stature to meet with those neighboring leaders and assert Korea’s national interest,” Faculty Affiliate Mauro Guillen told The Korea Times.
“It is important to have a legitimate and outspoken leader.”
Senate Majority Leader Mitch McConnell (R-KY) rejected parts of President Trump’s budget proposal on Tuesday; Existing home sales retreated 3.7% to an annualized pace of 5.48 million units in February, down from 5.69 million units in January; The Federal Housing Finance Agency’s (FHFA) monthly house price index continued its upward trajectory in January; U.S. crude oil inventories surged by 5.0 million barrels last week as total crude reserves stood at 533.1 million barrels, meaningfully above the upper limit of the average range for this time of year.
Faculty Affiliate Ezekiel Emanuel helped forge the Affordable Care Act as part of the Obama White House. He is now trying to help steer Republicans as they seek to dismantle the law.
Now, however, such bipartisan discussion of the future of federal health-care law “doesn’t seem to be happening,” said Emanuel, who chairs the University of Pennsylvania’s Department of Medical Ethics and Health Policy. “I may be the only person on the Democratic side who, for crazy reasons, they’ve agreed to talk to.”
“In its present form, the bill is totally unacceptable to Democrats, myself included,” he said, and he is actively working with President Trump to develop effective, bipartisan solutions.
House Republicans announce changes to healthcare bill; House GOP committee chairman said Trump infrastructure package could be included in aviation bill; U.S. Current Account Trade Deficit Decreases 3.1% to $112.4B in Q4; Economic Confidence Strong, Yet Below Recent High.
President Trump’s executive order will first begin the process of undoing the Clean Power Plan, the Environmental Protection Agency’s (EPA) rule to limit greenhouse gas emissions from power plants; The Senate will move forward with vetting two of President Trump’s nominees for his picks to lead the Labor Department and Securities and Exchange Commission; Central banks around the world are signaling a move away from ultra-easy money, but financial markets are responding as if the era of low-interest-rates is not stopping.
If someone had to choose the most contentious foreign policy issue of today, they would instinctively point to the seemingly endless and grueling civil war in Syria. The country has been embroiled in a battle with sectarian clans, Islamist groups, rebel forces, and the Syrian government for nearly six years.Third-party interventions have virtually defined the conflict dynamics and power balances; for if it wasn’t for Russian and Iranian interference, the Assad regime would be practically defenseless.
The FDA serves as the gatekeeper of pharmaceutical innovation in the United States, ensuring the efficacy and safety of drugs through careful regulatory supervision. Founded in 1906 with the passage of the Pure Food and Drugs Act, the FDA is responsible for guaranteeing the integrity of America’s food and pharmaceutical industries. Succeeding legislation, from the Hatch-Waxman Act to the FDA Modernization Act, have enshrined the modern-day regulatory pathway a drug must successfully navigate in order to be taken to market. 
Faculty Affiliate Mark Pauly comments on the GOP’s healthcare overhaul bill, stating that the proposal could also send the individual and small business insurance market into a meltdown. He said the structure of the tax credits, when combined with regulatory changes that permit higher premium charges for elderly, unhealthy patients, and other factors, aren’t likely to drive more people into the insurance market — a critical factor in spreading the cost risk and holding down costs.
To help drive healthy patients to purchase coverage before they get sick — another key part of spreading risk — the proposal would allow insurance companies to charge them 30 percent more if they had dropped coverage in the previous year. But Pauly said this isn’t enough of a stick to convince healthy people to purchase coverage, warning that the system would still be plagued by “Evel Knievels” who choose to go without, despite the risk.
“It’s troublesome, even for a market-oriented person,” Pauly said. “Now I’m really scared about a death spiral” in the individual and small business insurance market, he added.
GOP leaders demand details before funding Trump’s proposed border wall; Republicans consider changes to healthcare bill; Consumer Sentiment Rises in March as Household Finances Improve; U.S. financial markets offsetting effect of central banks’ increase in rates.
Faculty Affiliate Ezekiel Emanuel, one of the original architects of the Affordable Care Act, is now being consulted by both the new White House and people in Congress as they consider how to change the law. He’s not a fan of the legislation as it stands, but shares his thoughts on Milwaukee Public Radio.
“I am one of these people who really desperately hopes that, you know, we put the country above partisan politics. But the Republicans are going to have to recognize, I think, here that the responsibility is on them,” he said.
Rapidly changing technology has ravaged the American workforce. But AT&T is determined to teach its old workforce to use its new equipment. The result is one of the largest challenges in the telecom titan’s 132-year history, with national implications.
Part of the problem is that companies have historically been resistant to look inside their own workforce to meet the demand for technical workers. The number of corporate apprenticeship programs, frequently cited as one of the best ways to get workers on-the-job training, fell by more than one-third to 21,339 from 2001 to 2016, according to Department of Labor statistics. And businesses—perhaps looking at the shrinking average tenure of their employees—provide less training than they used to, according to research Faculty Affiliate Professor Peter Cappelli. In 1979 the average young worker received 21⁄2 weeks per year of training, he found. A few decades later the average had fallen to just 11 hours.
Faculty Affiliate David Zaring writes for the New York Times on why ethical codes for bankers are a strange regulatory tool.
As Philadelphia’s Soda Tax, whose revenue goes towards funding Pre-K programs, begins to see positive impacts on the community, other industries are being negatively impacted. For example, reduced sales have led to cutbacks and job losses in grocery stores around the city.
Faculty Affiliate Robert Inman said turning the discussion to jobs misses the point. “They are shifting the conversation in a way that is unproductive,” he said. “No policy that has benefits is going to be funded by a tax that has no consequences.”
He also said a year’s worth of data is necessary for evaluations and that comparing jobs across multiple industries is fruitless. “How would you make a decision on something like a 45-year-old man who lost his job, but a 28-year-old woman got a job?” he asked.
The comparison we should make, he said, is the beverage tax versus the other possible sources of revenue for the pre-K and Rebuild programs. “You want to use the one that is least damaging to the community,” he said.
Monday’s release of the Congressional Budget Office (CBO) estimate of the economic and insurance impact of the Republicans’ Affordable Care Act (ACA) replacement plan shined a spotlight on a little-known government agency.
“Estimates of the number becoming uninsured seem on the high side to me; they are highly dependent on how states respond to changes in Medicaid financing, which ought to have less of an effect on the number with coverage and more of an effect on generosity of coverage,” Faculty Affiliate Mark Pauly, PhD wrote in an email. “But they are plausible and reflect the Administration’s policy decision to reduce federal spending on government health insurance, which will cause some people to choose not to take insurance coverage because it has become more costly for them.”
Research from Faculty Affiliate Arthur van Benthem has been featured in Bloomberg News as evidence for ending fuel efficiency standards for motor vehicles. The professor found that that among vehicles more than nine years old, the least fuel-efficient ones stay on the road the longest. By raising the prices of new vehicles, tighter fuel regulations encourage drivers to buy used ones or simply keep what they already have.
President Trump is set to detail spending cuts to domestic programs and foreign aid on Thursday in his release of a budget outline; The D.C. U.S. District Court denied a request by the Cheyenne River Sioux Tribe on Tuesday to issue an emergency injunction preventing oil from flowing through parts of the Dakota Access Pipeline; U.S. retail sales were largely unchanged in February – rising a marginal 0.1% from the prior month – consistent with market expectations; Consumer price growth intensified in February as inflation was up 0.1% during the month;
Congressional Budget Office estimates that Republican healthcare plan would save $337 billion yet increase the number of uninsured by 24 million by 2026; Work begins on Trump Administration’s $1 Trillion Infrastructure Plan; Student-Loan Defaults Increased by 1.1 Million in 2016; U.S. Producer Price Index Rose 0.3% in February.
The White House is due to release its budget outline in the coming week; Republicans are trying to replace the ACA with a more conservative plan centered around tax credits; The prospect of higher borrowing costs has been a source of panic for stocks in the past, yet major stock indexes are hitting fresh records; The U.S. economic expansion is now the third-longest on record and showed no signs of letting up in February.
Republican Health Plan May Delay, Not Repeal, ‘Cadillac Tax’; Two Major House Committees advance ACA repeal legislation; Commerce Secretary Indicates NAFTA Talks Could Start in Late June; U.S. Added 235,000 Jobs in February, Decreasing Unemployment Rate to 4.7%; U.S. Household Net Worth Climbs to Record $92.8 Trillion in Fourth Quarter of 2016.
“Change is pervasive in the world, and the only possible response to it is change itself. For that, global leaders will need to start talking and will need to start generating new ideas and solutions to vexing issues. The global liberal economic and geopolitical order has overwhelmingly served to improve the livelihood of people around the world. It still represents the best option for a peaceful and prosperous future, but it will need to be reformed or it will become moribund.”
Faculty Affiliate Mauro Guillen writes on the importance of the global liberal order in modern times.
Unfortunately, the advent of autonomous driving is unlikely to solve the problems of rush-hour gridlock that clog city streets and freeways.
An economic solution is necessary, especially since with remarkable consistency, the research finds the same thing: Whenever a road is built or an older road is widened, more people decide to drive more. Build more or widen further, and even more people decide to drive.
The extent of this failure was chronicled in a 2011 paper called “The Fundamental Law of Road Congestion,” by Faculty Affiliate Gilles Duranton,.
Sen. Rand Paul (R-Ky.) introduces ObamaCare repeal alternative; Republican U.S. health plan clears first hurdle on Thursday; U.S. weekly jobless claims rise from 223,000 to 243,000, U.S. Import and Export Prices Rise in February.
“This would be even worse than going back to the days before the Affordable Care Act. It would force states to ration care and deny some Americans lifesaving treatments or nursing home care. Cruel only begins to describe the Republican plan.”
In this OpEd from the New York Times, Faculty Affiliate Ezekiel Emanuel explores the Republican alternative to the Affordable Care Act.
“Climate change caused by the burning of fossil fuels in the past has opened up new business opportunities in the Arctic.”
Faculty Affiliate Sarah E. Light explores the wrongful benefit principle and
asks whether it should be permissible for companies to profit from past decisions that have proven to be detrimental. Late last year, President Obama issued an executive order to block drilling in the Arctic and Atlantic Oceans to preserve those territories. But the melting Arctic ice has opened up areas for possible drilling that had been buried just a few years ago. Her paper explores this paradox and is explained further in this Knowledge@Wharton podcast.
GOP Healthcare Bill Faces Opposition from Conservative Forces After Release; Republicans Divided on How and Whether to Pay for Tax Cuts; Senate passes bill ending Obama federal land-planning rule; Private-Sector Hiring Accelerates in February; U.S. Productivity Increased at 1.3% Rate in 4th Quarter.
The United Kingdom has always had a tenuous relationship with the supranational European Union. Protective of national sovereignty and parliamentary inviolability, the United Kingdom has had a ‘natural’ enmity toward continental power.
With the rise of digital innovation comes equally innovative business models, especially those tapping into the sharing economy. However, regulations don’t always evolve as quickly as technological change.
So what should policy makers and regulators do? Faculty Affiliate Professor Kevin Werbach explains his insights in this interview with Knowledge@Wharton, based on his previous Issue Brief entitled “Lessons for Policymakers and Regulators on the (Predictable) Future of the Digital Economy”.
Republicans must resolve several issues in ObamaCare repeal bill before passage; House to provide $578B in defense spending bill for 2017; Trump trade adviser Peter Navarro makes cutting trade deficit his top policy focus; U.S. factory orders increase 1.2% in January, surpassing 1% estimate; Fed Officials Signal Indicate Likely Rate Increase in March.
It is not hyperbole to blame Philadelphia’s underfunded pensions for the city’s high taxes, dirty sidewalks, potholed-filled streets, and struggling schools. Every dollar the city has to contribute to fill the pension gap is a dollar that could have gone towards fixing one of those pressing problems.
Last year Philadelphia’s pension fund floundered in the markets, taking a $149 million loss in the fiscal year that ended June 30th, 2016. That marked a 3.17 percent decline that followed the previous fiscal year’s anemic 0.29 percent return.
“Most public pension managers hope they will make a higher return by investing in riskier assets,” said Faculty Affiliate Olivia Mitchell. “But what they are not acknowledging up front is that risky assets are risky, and you will lose 20 percent sometime.”
With stocks, and even corporate bonds, “some of the time you flop, and sometimes you win big,” she said. “Pensions should go into much safer assets.”
Republicans fighting to undo net-neutrality rules have a lot of options now that Donald Trump is in the White House and their party controls Congress.
But any path to change the rule that mandates fair treatment of web traffic will rouse determined opposition from Democrats, who insist the strong, utility-style rules the commission passed in 2015 under Democratic control are needed to keep communications networks open to new competitors and new ideas.
“You need enforcement,” said Faculty Affiliate Kevin Werbach, who teaches internet policy at the University of Pennsylvania’s Wharton School and supports the FCC’s rule. “There’s too much opportunity for the big guys to cut deals that aren’t good for the little guys.”
The Department of Homeland Security reported on Wednesday that it could identify only $20 million in available funds to be redirected to begin construction of President Trump’s signature pledge to erect a border wall along the U.S.’s border with Mexico; Initial jobless claims declined to reach the lowest level for initial claims since March 31, 1973; Eurozone inflation accelerated to its fastest clip since January 2013 during February as consumer prices were up 2% from a year earlier; Chinese manufacturing activity rose at a faster-than-expected pace in February as demand picked up and stimulus momentum continued.
Faculty Affiliate Jeremy Siegel says “frankly, I was blown away by this speech…It was very much more Republican than just Trump.”
“The evidence we’ve generated does not support making major adjustments to the current Medicaid program,” Faculty Affiliate Daniel Polsky said on his research. “We can increase the number of people [who] can access care through Medicaid without seeing any decline in the number of doctors willing to see them.”
The Trump administration is preparing to ignore any rulings by the World Trade Organization (WTO) that it sees as an affront to U.S. sovereignty; Consumer spending growth slowed to 0.2% in January versus 0.5% in December as personal income ticked up to 0.4% from 0.3%; ISM’s manufacturing index reports that manufacturing activity in February, and the overall economy, grew for the 93rd consecutive month; U.S. crude oil inventories increased by 1.5 million barrels last week, meaningfully above the upper limit of the average range for this time of year.
The Penn Wharton Public Policy Initiative was proud to welcome Dr. Pat Harker, President and CEO of the Federal Reserve Bank of Philadelphia and former Dean of the Wharton School, for a talk on “Key Macroeconomic Trends for the Coming Year.” The views expressed by President Harker during the talk were his alone and do not reflect the position of the Federal Reserve.
Corporate world divided over GOP’s border tax; Trump moves towards repeal of Obama EPA water rule; Two House conservatives would vote against draft Obamacare repeal bill; U.S. GDP Increased 1.9% in Final Quarter of 2016; U.S. Home Prices Grew at Fastest Rate in 2.5 Years in December; Consumer Confidence Hits 114.8 in February, a 15-year-high.
President Trump is expected to demand major cuts to the Environmental Protection Agency and Department of State to fund boosts to military spending in his first budget; A debate is ensuing in Washington over a leaked draft of the GOP’s repeal and replacement health care bill; The Government Accountability Office warned further changes to the stock ownership requirement could have “wide-ranging policy implications” for the Fed’s structure, and could diminish the autonomy and independence of the 12 regional Fed banks.
Pensions are, in a sense, a necessary by-product of a rich economy. But what will it take to sell the idea to the rural poor? Especially when their income (never particularly substantial) is seasonal, increasing at harvest time and with demand in the cities for construction-related labor. What are the inducements that can convince them to invest for a future forced upon them by the changing social structure?
Faculty Affiliate Olivia S. Mitchell set out to answer these questions in a research paper titled, “Assessing the Demand for Micropensions among India’s Poor.”
“Even if [Yellen] doesn’t [leave], the President is going to have a real chance to remake the Fed,” said Faculty Affiliate David Zaring on a Knowledge@Wharton Podcast how the Federal Reserve can maintain its independence. Listen to his discussion below:
The landmark Supreme Court case Estelle v. Gamble addressed the medical treatment of US prisoners, affirming their Constitutional protection to sufficient health care. Over 40 years later, the practical application of this decision is still in question, as correctional health care often fails to meet the needs of inmates when administered by state facilities. And because alternatives, such as privatized health care, come with its own set of social and economic concerns, the lack of political pressure on this subject represents a gap in contemporary policy.
Donald Trump’s Federal Communications Commission is expected to roll back hard-fought rules on network neutrality — specifically the decision to make broadband as heavily regulated as landline phone service — but it will most likely take an act of Congress to do so, according to Wharton experts.
Due to the FCC’s internal procedures, it’s not easy to revoke Obama’s regulations — the 2015 Open Internet Order — which also was upheld by the courts. “The FCC can’t just change its mind every time there’s a new party in office,” Faculty Affiliate Kevin Werbach explains. “For them to put out another order saying we’ve changed our mind, they would have to come up with a reason why circumstances have changed again so much [in a short time] other than there’s a new party in charge.”
Congress, however, can change the law at any time and there are bills in circulation to do just that. “The real question is, how far do they want to pull things back?” says Werbach.
An excerpt from Faculty Affiliate Howard Kunreuther’s book the Ostrich Paradox: Why We Underprepare for Disasters explores how we can protect our environment for future generations with long term planning, dealing with cognitive biases, and engaging the community.
Wells Fargo’s board has turned to a powerful lobbying firm as the bank grapples with government scrutiny of its sales scandal, in what experts call an unusual move for the board of a public company.
Faculty Affiliate Michael Useem said that while hiring a lobbying firm “definitely is unusual” for a board, it reflects higher board accountability expected nowadays by investors and others.
“Outside parties, Congress in this case, state houses also, have recognized that boards are more engaged, more strategic and more responsible,” Useem said.
The landscape of the lending market has shifted dramatically over the past few years from domination by big banks to a market where more loans are made by non-banks — financial institutions that only make loans and do not offer deposit accounts such as a savings account or checking account.
Not only have banks reduced their mortgage loan volume, but the entire private market of investors in mortgages disappeared in 2007 and 2008 and, unlike other financial markets, has yet to come back, says Faculty Affiliate Susan Wachter.
Is a “strong” dollar a good thing? President Donald J. Trump has said that it is not, and his words caused ripples throughout the economy. But what, exactly, was he talking about?
“[M]any people view the dollar as a bit of a proxy for how the U.S. is performing overall, including the new administration,” says Franklin Allen, finance and economics professor at Wharton Business School. Too much appreciation, though, can dampen U.S. economic growth, he added. Read more below:
Treasury Secretary Steven Mnuchin said that Congress was working through differences on tax policy reform; Initial jobless claims increased by 6,000 during the week ending February 18, but remain at historically low levels; U.S. crude oil inventories increased by 0.6 million barrels last week as total crude reserves stood at 518.7 million barrels; Eurozone consumer prices were up in the past year, encouraging to the ECB, which has struggled to lift inflation.
Treasury Secretary Steven Mnuchin urged the IMF to assert stricter enforcement in policing exchange-rate policies of its members; The National Bureau of Economic Research (NBER) recently released a paper asserting President Trump’s immigration policies would strain an already-tight U.S. labor market; Federal Reserve Open Markets Committee members anticipate raising short term interest rates “fairly soon” on an improving economy; Existing home sales soared to a 10-year high in January to reach the fastest pace since February 2007.
CEOs write letter to defend proposed border-adjustment tax; Trump prepares executive orders on climate change; US Stocks Open at Record-Highs Tuesday Due to Rise in Oil Prices and Strong Retail Results; Momentum in U.S. manufacturing and service sectors slowed in February.
The Trump administration is considering changing how U.S. trade deficits are calculated, a move that would make the deficit look larger on paper; A tax debate is heating up and lawmakers are thinking of an alternative solution; Trump team’s growth forecasts far rosier than those of CBO, private economists.
Since Roe v. Wade established the legality of abortions, both national and state legislative branches have fought over how to interpret the decision. While national policies like the Hyde Amendment set limits on abortions, states have taken it upon themselves to either tighten or loosen rules within those guidelines, meaning that access to clinics is heavily dependent on where one lives. As President Trump takes the reigns with a decidedly pro-life stance, early signs help predict how he will change the current system.
The U.S. Centers for Medicare and Medicaid Services announced on Wednesday that healthcare costs will rise to 19.9% of GDP over the next decade; Federal Reserve Chair Janet Yellen rejected suggestions that the U.S. central bank would respond to Republican proposals for tax reform and increased spending with interest rate hikes; January housing starts declined as building permits rose; Initial jobless claims increased slightly but remain at historically low levels.
Faculty Affiliate Lisa Servon spent time working at a check casher in the Bronx to better understand the “unbanked”. Although prevailing wisdom holds that customers would be better served by using a bank, Servon found that check cashers were frequently cheaper and served customers’ needs better than banking institutions. Read more:
Environmental groups and their allies in Congress are pondering what they can to do save the stream protection rule, soon to be nixed by President Donald Trump.
Faculty Affiliate Cary Coglianese says that a long term solution could involve Congress passing a bill that either contains the stream rule or directs OSMRE to develop a new rule. Both options are viable and have been done before, he said.
Federal Reserve Chair Janet Yellen signaled a rate hike could come as soon as the March 14-15 meeting; The Consumer Price Index (CPI) increased in an upside surprise from the market consensus in January; Retail sales rebounded in January, suggesting positive consumer sentiment following the holiday season and the presidential inauguration; Industrial production fell by 0.3% in January as unseasonably warm weather caused a major 2.6% drop in utilities output; U.S. crude oil inventories increased meaningfully above the upper limit of the average range for this time of year.
Senate confirms Steven Mnuchin as new Treasury secretary; Federal Reserve Chair Janet Yellen Says Central Bank Will Consider Raising Short-Term Interest Rates; Pilot program could fund home-based assistance for some Medicare patients; Producer Price Index (PPI) posts largest gain in wholesale inflation since 2012; Small business optimism index rose in January to highest level since December 2004.
“The best way to stimulate jobs is something like a tax credit for every new job — that’s the brute-force economist ideal,” said Faculty Affiliate Mark Pauly on the idea of a second tax holiday for pharmaceutical companies. “This seems pretty far removed from that.”
Faculty Affiliate Peter Conti-Brown comments on changes at the Federal Reserve and how Tarullo’s departure affects monetary policy.
Suppose there were a way to pump up the economy, reduce inequality and put an end to destructive housing bubbles like the one that contributed to the Great Recession. The idea would be simple, but not easy, requiring a wholesale reframing of the United States economy and housing market.
The solution: Americans, together and all at once, would have to stop thinking about their homes as an investment.
This was the conclusion of a recent paper by Faculty Affiliate Joseph Gyourko.
“While our ability to foresee and protect against natural catastrophes has increased dramatically, it has done little to reduce material losses,” says Faculty Affiliate Howard Kunreuther.
Several major automakers are asking President Trump to reduce emissions standards for vehicles; U.S. could suffer a greater economic shock than China in a trade war.
Suddenly, and for the first time, some tech startups are hedging their bets on whether the U.S. is a hospitable place to be based, and major tech firms are adding their voices to lawsuits against the county’s president. The Trump administration’s proposed immigration restrictions are being challenged in court, but no matter the outcome, the tech sector has been seriously shaken by the executive action, experts say.
“It certainly is a big deal for these companies and the way they operate, and I think it reflects this big divide in this country that overlaid the election – that is, one person’s job-taking immigrant or H-1B is another’s valued employee,” says Faculty Affiliate Peter Cappelli. “So it is a pretty stark — and maybe the starkest — divide that was an underlying issue in this election that a lot of people in the tech industry maybe weren’t paying attention to.”
As Kickstarter, the crowdfunding platform, hits the $100 million mark for publishing projects, a study released by the University of Pennsylvania credits the platform with creating more than 300,000 full and part-time jobs. The study, by Faculty Affiliate Ethan Mollick, also reports that Kickstarter has been directly involved in creating nearly 9,000 new companies and nonprofit organizations. Mollick also found that Kickstarter is responsible for generating $5.3 billion in economic impact for its creators and their communities.
“What can we do to help increase the number of good jobs in the United States?…Substituting machines and software for people is not the only way to do that. And it is not necessarily even the most effective way,” says Faculty Affiliate Peter Cappelli in his OpEd article for the Washington Post.
“I think the real challenge is for people to pay attention before something happens, rather than afterwards,” says Faculty Affiliate Howard Kunreuther discussing his new book The Ostrich Paradox: Why We Underprepare for Disasters.
In a talk with Knowledge@Wharton, Professor Kunreuther explains why changing how we think about risk could better prepare communities for disaster.
As refugees and immigrants displaced by the Trump administration’s travel ban were halted in airports around the country, many used personal crowdfunding sites like GoFundMe to help defray the significant costs she incurred as a result of the ban.
House Republicans considered various efforts that could reduce overall Medicaid funding while giving states more control over the roughly $500 billion program; Senate confirms Trump’s Health and Human Services Secretary; Higher energy prices contribute to gain in U.S. import prices in January as consumer sentiment falls post-election.
Sen. Deb Fischer (R-NE) is to introduce bills targeting women’s economic issues such as equal pay and paid leave; The Trump administration will take its first steps this week toward crafting a bilateral trade agreement with Japan; Initial jobless claims decreased by 12,000 during the week ending February 4 to remain at historically low levels; Germany’s exports exceeded its imports by the widest yearly margin on record last year as the country’s trade surplus rose to €252.9 billion.
Hugo Chavez was a prominent Venezuelan leader