Over the course of the Biden administration, the federal government borrowed more than $5 trillion to pay for programs it did not have the tax revenue to finance. Under current law, the Congressional Budget Office projects these primary deficits — the difference between non-interest spending and tax revenue — to total $7.4 trillion over the next decade.
Financing government spending with deficits is not inherently bad. In fact, it is often necessary to support the economy temporarily during widely recognized emergencies such as wars or recessions. When the crisis subsides, the government can raise taxes or reduce spending to compensate, and the debt is either repaid or at least shrinks as a share of the economy. Debt can also be a useful tool to make investments that will grow our economy over the long-term, such as funding scientific research that lays the foundation for technological progress.
But most federal debt isn’t taken out for these productive purposes. Before the COVID-19 pandemic, more than half of the national debt could be attributed to the cumulative cost of interest payments. This means that most of our debt wasn’t used to finance tangible benefits like providing public goods, uplifting the poor, or subsidizing long-term investments. Instead, it was borrowed just to pay the cost of past debt.
Although it might appear that the share of debt attributable to interest has since shrunk, this is an artifact from the unusual surge of borrowing to finance temporary programs following the COVID-19 pandemic. As the federal government begins paying interest on the debt accumulated over the past four years, and then pays interest on the debt used to pay for future interest payments, cumulative interest payments will snowball to the point where they again make up the majority of debt within the next decade.
The problem will only get worse as time goes on if current law remains unchanged. Over the next 30 years, cumulative interest payments are projected to grow twice as fast as gross domestic product. At the end of that window, the amount of money spent financing past debts will exceed the total value of all goods and services produced by our economy each year.
When we borrow, we are making a transfer from future taxpayers to current ones. By continuing to neglect the long-term cost of debt, we are setting our future selves and subsequent generations for a snowballing debt burden, most of which will not even have been used to buy anything other than time for politicians to procrastinate.
Despite the nation’s deteriorating fiscal health, President-elect Trump and his Republican allies in Congress want to accumulate even more debt. Their top fiscal policy priority for next year — fully extending the expiring provisions of the 2017 Tax Cuts and Jobs Act without offsetting the cost — would increase primary deficits by $5.2 trillion over the next 10 years alone. Implementing all of Trump’s proposals from his 2024 presidential campaign, including tax cuts on income from tips, overtime pay, and social security payments, could add as much as $13.5 trillion to primary deficits over the coming decade.
If there is one key takeaway from this analysis, it is that when policymakers pass unfunded tax cuts today, future taxpayers will be stuck with a debt burden that is many times the cost of the tax cuts themselves. When each dollar of debt we undertake is unlikely to be repaid soon, it comes with a far higher cost of interest. This should set the standard for what’s worth borrowing for higher, not lower.
President-elect Donald Trump believes Americans have given him an “unprecedented and powerful mandate to govern.” Like so much of what he says, this claim blurs the line between hyperbole and fantasy. His Nov. 5 victory was solid, but no landslide.
Trump won just under half the popular vote, only 1.6% more than Vice President Kamala Harris received. With a public disapproval rating of 50%, he is the least popular presidential winner in modern times.
It’s certainly possible to look at Trump’s return to power as reflecting the new norm in U.S. elections of small and unstable majorities. Since Barack Obama’s departure, U.S. voters have tossed out the incumbents in one “change” election after another.
But such an interpretation might tempt Democrats, who were shut out of power in Congress as well as the White House, to do little but wait for their chance two and four years hence. That would be a colossal mistake.
Instead, Democrats must face a hard truth: their coalition is inexorably shrinking as non-college voters continue to defect. It’s time for honest answers to three vexing questions:
How did they lose again to the deeply flawed Trump? Does their loss signal a U.S. political realignment? And why are Democrats — and indeed center-left parties across Europe — alienating the working-class voters they once championed?
The sweep of Trump’s victory — both demographically and geographically — came as a shock. He shaved his losing margins in Democratic regions and made large gains among Democratic-leaning voter groups — young voters, Blacks, and especially Latinos.
Despite spending a half-billion dollars more than Trump, Harris won not one of the seven battleground states. In the brief time allotted her (107 days), she ran a competent campaign but could not avoid being sucked into the undertow of President Biden’s unpopularity.
Tactics aside, however, the defeat highlighted Democrats’ strategic political failure under Biden-Harris to stop hemorrhaging working-class voters.
Biden talked incessantly about fighting for working people, but his policies did not align with their interests.
Instead, he and his advisors fell victim to the fallacy of “deliverism” — the notion that passing big, multitrillion-dollar bills in Washington would impress working families and show them the “system” at last was working for them.
Instead, they got blindsided by inflation. Forty percent of these voters identified the high cost of living as their top concern. Economists differ as to its causes, but working-class voters link inflation to high government spending.
Immigration ranked second for these voters. Here again, they blamed the Biden administration for liberalizing asylum policy and presiding over a surge of over 7 million illegal migrants over the past four years. In fact, on almost all the key issues except for abortion, non-college voters expressed far higher levels of trust in Republicans than Democrats. They also were more likely to say Democrats had moved too far to the left than Republicans had to the right.
The aftershocks of Trump’s victory and U.S. voters’ rightward shift are felt across the Atlantic. Like his populist-right counterparts in Europe, Trump is riding a working-class revolt against governing elites. First confined to white Americans without college degrees, it’s now spreading to the non-white working class.
In fact, social class, now defined chiefly by education level, is replacing race and ethnicity as America’s deepest political fault line.
Since the high-water mark of Barack Obama’s presidency, Democrats have experienced a 30-point drop in non-white working-class support. That’s shattered a cherished progressive myth that “voters of color” think and vote alike along reliably Democratic lines. Harris improved on Biden’s 2020 performance with only one group — white college graduates. Yet that only underscored the strange inversion of America’s partisan loyalties: Democrats have become the party of the highly educated and professionals, while Republicans represent a multiethnic working class.
For the first time in memory, Harris won Americans making more than $100,000, while Trump won those making less than $50,000.The blue-collar exodus from the Democratic Party has been decades in the making. It won’t be fixed by minor tweaks. Democrats need to make dramatic course correction to head off a U.S. political realignment around a new populist right majority.
Voters without college degrees constitute roughly two-thirds of the U.S. electorate. Mathematically, there’s no way to build durable governing majorities with college-educated voters alone.
Morally, if Democrats hope to resume their historical role as the “party of the people,” they’ll need to reflect the mainstream values of middle-class America rather than the rarefied “luxury beliefs” of upper-class elites.
According to a post-election analysis by More in Common, Americans overwhelmingly believe that Democrats care more about advancing progressive social causes than the economic interests of average working families.
Asked to describe the party’s highest priorities, they picked “LGBT/transgender policy” second, after abortion. Actually, Democrats, like all other voter groups, picked the cost of living first, followed by health care and abortion. Transgender issues were 13th on their priority list.
Why are public perceptions so skewed? A big reason is that U.S. political discourse is mainly driven by progressive activists and right-wing populists. This leads members of both parties to assume the other party holds more extreme views that it actually does.
The outsized influence of progressive activists associates Democrats with a raft of unpopular positions on race/gender, immigration, crime and education. Trump exploited that to devastating effect against Harris.
The most lethal attack ad of the presidential campaign was a clip from a 2019 interview in which Harris explains her support for publicly-funded sex change surgery for prisoners, including detained immigrants. The kicker: “Kamala is for they/them; President Trump is for you.”
After watching the ad, 2.7% of voters shifted to Trump. That’s a stunning result. And even if most Democrats hold more moderate views on culturally fraught issues, they pay the opportunity costs that come with the progressive left’s fixation on race, gender, police brutality, fossil abolitionism and other “social justice” issues. The amount of time Democrats spend talking about such issues diverts their focus from the kitchen table struggles of working-class families.
It is the kitchen table struggles of working-class families that now need to become the fixation for Democrats. PPI has been working with Deborah Mattinson, most recently director of strategy to U.K. Labour leader and now Prime Minister Keir Starmer, to understand how those crucial voters experienced the U.S. election. In this report, PPI presents insight and analysis of the election, and draws on our learning from the center-left around the world to set out the way ahead for Democrats.
Only by re-connecting with the working-class Americans we have lost, and providing them with a credible alternative for change, can we hope to win the next Presidential election. That work has to start now.
WASHINGTON — As the cost of higher education continues to rise, students and families are turning to Advanced Placement (AP) and International Baccalaureate (IB) programs to reduce tuition expenses and graduate sooner. However, despite the increasing popularity of these programs — over 5.2 million AP exams were taken in 2023 — a new analysis from the Progressive Policy Institute (PPI) reveals that many colleges and universities are imposing restrictive policies on how AP and IB credits are applied, making it harder for students to save both time and money.
A new PPI report, “Diminishing Credit II: How Colleges and Universities Restrict the Use of AP and IB Towards Earning a Degree in Less Than Four Years”, authored by PPI Senior Fellow Paul Weinstein Jr., dives deeper into these trends. The report highlights how institutions limit the value of pre-college coursework through measures such as capping the total credits allowed, raising minimum exam score thresholds, and making credit policies opaque and difficult to navigate. These restrictions force students to take more courses than necessary, prolonging their time to degree completion and inflating the overall cost of a college education.
The report is a follow-up to PPI’s groundbreaking 2016 study and reveals that colleges are increasingly reducing the value of pre-college coursework, worsening the student debt crisis. Key findings include:
Credit Caps: Half of the surveyed institutions cap the number of AP and IB credits students can apply toward graduation.
Minimum Score Inflation: The percentage of top schools requiring a minimum AP score of 4 or higher has grown, with some elite institutions only accepting scores of 5.
Opaque Policies: Many colleges bury or omit information about their AP/IB credit policies, leaving students in the dark until after enrollment.
“Colleges and universities are creating unnecessary obstacles for students striving to graduate early and reduce tuition costs,” said Weinstein. “By capping credits, raising score requirements, and limiting transparency around AP and IB policies, these institutions are driving up the cost of a degree and forcing families to shoulder even greater financial burdens. It’s time for policymakers and colleges to remove these barriers and deliver on the promise of affordable, accessible higher education for all students.”
The report recommends reforms to make credit policies more transparent and equitable, including:
A national database detailing AP and IB credit policies for all colleges
Mandating that colleges provide detailed credit assessments to admitted students before enrollment
Limiting caps on AP/IB credits to one year of coursework
Expanding access to AP and IB programs in underserved schools
The findings are especially timely given the Biden administration’s focus on reducing student loan debt. While President Biden has made strides to address the financial burden of student loans, such as his executive order to cancel up to $20,000 of student debt for many borrowers, PPI maintains that these measures are not enough to tackle the root cause of the crisis: skyrocketing tuition costs.
Instead of relying on costly and potentially inequitable debt forgiveness programs, PPI emphasizes the need for colleges and universities to lower costs and allow students to capitalize on pre-college achievements like AP and IB coursework. These steps would provide a more sustainable and equitable path forward by ensuring that families can reduce the cost of higher education upfront rather than retroactively addressing debt burdens.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visitingprogressivepolicy.org.Find an expertat PPI andfollow uson Twitter.
In 2016, the Progressive Policy Institute (PPI) released an analysis of school policies regarding Advanced Placement (AP) credit. Despite being one of the few ways students could seek to graduate in fewer than four years, we discovered that the vast majority of the nation’s top schools restricted students from applying AP coursework toward degree credits. Unfortunately, despite strong evidence that successfully completed AP courses meet the standards of achievement expected by colleges and universities, the situation has deteriorated significantly as more schools seek to protect their revenue streams.
Furthermore, schools have significantly diminished the value of other college-level coursework completed before matriculation. For example, U.S. universities and colleges limit the amount of course credit awarded to students who have completed coursework through the International Baccalaureate (IB) curriculum, which is increasingly offered throughout the country. PPI’s study shows that IB credit was typically denied at the same rate as credit as AP.
Today, more students than ever enroll in AP courses and exams. In 2023, 5.2 million AP exams were taken by high school students, up from 1.6 million in 2002. A study from the College Board, which owns AP, shows that 738,698 students, or 21.7% of students in the class of 2023, scored at least a 3, more than 2 points higher than the class of 2013.
Although still small by comparison to the reach of AP (almost 23,000 high schools offer AP courses), 900 high schools in America now offer the IB diploma. This number has risen considerably since 1971, when the first IB program was taught in a U.S. school. The granting of credit for AP and IB is one of the few ways students can reduce the cost of attending college. Presently, the average cost of attending a private, nonprofit college or university is $38,421, and $15,868 for a public university.
Students who successfully complete AP or IB courses in high school could graduate in some cases either one year or one semester early, saving them anywhere between 12.5% to 25% of the total cost of the degree.
Students have other tools that help them graduate college at a lower cost. According to the National Center for Education Statistics, between 20% to 50% of new university students have transferred from community college. But as students move between community college and four-year programs, many find it very difficult to navigate the system of credit transfers and agreements.
Furthermore, students looking for information on credits for AP or IB work (and courses completed at community colleges as well), often have to wait until they arrive on campus and have paid their first tuition installment. Many schools have made it increasingly difficult to figure out how much AP or IB credit will be awarded before stepping on campus. Many institutions are leaving that decision to academic departments. And more and more schools are offering only waivers on introductory courses in lieu of course credit.
For too long students have been at the mercy of college administrators — forced to pay higher tuition bills and fees for things that should be free — transcripts, tickets for graduation, etc. Policymakers need to help level the playing field by using the government’s bargaining power (the federal government is the largest source of financial aid and provides billions in research grants to colleges and universities) to negotiate lower prices and force schools to accept coursework completed elsewhere. An important step to help students get through college faster and, therefore, at a lower cost is to ensure they get credit for successfully completing college-level work before matriculating.
Diana Moss has spent the last 25 years advocating for a centrist, consumer- and economics-based antitrust policy. Recently, as Vice President and Director of Competition Policy at the Progressive Policy Institute (PPI), she has been particularly active, publishing several papers, intending, to my read, to revive an antitrust agenda focused on enforcement that matters to consumers’ pocket-book issues. She sat down with the Rethinking Antirust Podcast to discuss.
“Many Gen Z teens don’t feel career ready. What if we made students aware of all of the many options available to them early on, starting in middle school (or even sooner)?”
That’s the challenge for K-12 career education presented by the authors of a report entitled Success Redefined issued by American Student Assistance and Jobs for the Future. The report is based on a Morning Consult poll of over 1,100 high school graduates who opted not to go to college directly after high school.
Nearly one out of three non-college youth (32%) reports a lack confidence in knowing the steps to take to transition into a post-high school career and further education. Two out of three (64%) who did not take career pathway programs say they would have considered pathway programs if they knew more about them.
The barriers to not pursuing pathway programs include a lack of encouragement from those at school to explore them. The preferred sources of information for the post-high school plans of non-college youth were searching the web (87%) and watching online videos (81%).
WASHINGTON — High prices for essential goods and services force consumers to make tough choices about what to buy, where to live, and even what bills to pay. Anger around high prices and the high cost of living played a major role in the 2024 presidential election. Disillusionment with the “Bidenomics” agenda fueled a sense of disenfranchisement. Namely, the struggle to afford the necessities that account for most of consumers’ budgets were de-prioritized in favor of proposals to pay off college student loans, green the economy at substantial cost, and other policies that do not ease financial burdens for working class Americans.
Today, the Progressive Policy Institute (PPI) released a new report, “Can Antitrust Be Doing More to Protect Consumers?,” authored by Diana L. Moss, Vice President and Director of Competition Policy at PPI.Market power is an important contributor to higher prices in critical sectors that make up the bulk of consumer spending. The report unpacks evidence of high market concentration, flagging productivity, market power “bottlenecks,” and lackluster merger control in critical sectors such as housing, transportation, food, insurance, and health care.
“PPI’s findings highlight the need to rethink antitrust priorities to more directly and effectively protect consumers,” said Moss. “We know that antitrust enforcers make hard choices about what cases they pursue. But our analysis shows that enforcement could be doing a better job of championing the interests of consumers. We propose that enforcers prioritize sectors where high prices hit consumers hard in their pocketbooks and drive up their already high cost of living.”
PPI’s analysis highlights the vital role of antitrust — especially stronger and more coordinated merger enforcement — in key sectors that account for the bulk of consumer spending. The report suggests several priorities that would sharpen antitrust priorities and bring it into closer touch with consumers, including:
The U.S. antitrust agencies should stop “splitting up” merger reviews for transactions in different parts of the food and health care supply chains. Oversight of all consolidation in these sectors should be assigned to one agency to ensure that competitive dynamics along a supply chain are fully accou
The antitrust agencies should revisit policy to approve virtually all retail grocery mergers subject to divestitures. Failed divestitures have unfairly transferred the burden of anticompetitive mergers to consumers through higher food prices. Reversing this damage will require concerted policy action moving forward.
The antitrust agencies should consider the impact of harmful consolidation and business practices on the stability and resiliency of supply chains. Consolidation in “intermediary” markets that are prone to market power bottlenecks have not been adequately addressed.
Agencies should organize public workshops to deepen their understanding of changes in business models, supply chains, and bargaining power in major consumer-facing supply chains over time.
“Competition is the lifeblood of a healthy market system,” said Moss. “To ensure it thrives, and consumers reap the benefits of competition. We should reevaluate antitrust priorities to provide more direct and effective relief in sectors that have the most impact on their budgets.”
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
FACT: 29 Haitian garment factories exported 300 million clothing articles to the U.S. last year.
THE NUMBERS: Haitian GDP (2023) –
Total
$19.6 billion
Remittances from abroad
$3.9 billion
HOPE/HELP exports
$0.8 billion
WHAT THEY MEAN:
In the holiday season, as we’re supposed to think at least a bit about those with less, here’s a useful last job for Congress: extend the U.S.’ three small ‘trade preference’ programs — acronyms “GSP,” “AGOA,” and HOPE/HELP” — for lower-income countries.
As an introduction, here’s an October piece from the International Labor Organization’s “Better Work” office in Port-au-Prince, worriedly entitled “Battling the Odds”. The ILO officers summarize the state of Haitian garment production and employment as follows:
“Throughout 2023 and the first half of 2024, Haiti has faced escalating crises, taking a toll on the nation’s socio-economic health. Gang-related violence is profoundly impacting daily life, with effects spilling over into the labour market, livelihoods and the well-being of workers. The garment industry has been seriously affected. Better Work Haiti’s most recent report delves into the data, revealing a troubling decline in operational factories, with one permanent and two temporary closures. The industry has seen a significant reduction in the workforce, with employment falling from 42,500 to 33,857 in just a few months, a loss of over 8,600 jobs.”
As they were writing up their report in September, “Better Work” was overseeing 29 Haitian garment factories in a handful of industrial parks — Port-au-Prince, Cap Haitien, Ouanaminthe — serving as guarantors for health and safety, wage and benefit, and other labor standards in lieu of a functioning labor ministry. Last year these factories produced about 300 million garments for American retailers and brands — mostly T-shirts, with some tracksuits, pullovers, and sweatshirts as well. Over the past decade, these factories have earned about $1 billion a year in export revenue, with 2023 shipments a bit lower at $800 million.
The figure, a bit more than 1% of American clothing imports, is about 5% of Haitian GDP. To draw an intellectually shaky but illustrative parallel to the American economy, by BEA’s GDP-By-Industry data, you could combine the GDP shares of U.S. automotive manufacturers and dealerships (1.9%), energy production and refining (1.7%), film and music (0.4%), and air transport (0.6%) to get a similar share. At a personal level, the ILO-regulated apparel jobs as of 2021 (mostly women, often with on-site clinics) made up about a tenth of Haiti’s regular, hourly-wage-paying jobs. Statistics have been scarce since then, but even with falling factory employment the share of formal labor may have been higher earlier this year.
As the ILO’s comment suggests, Haiti’s protracted political crisis has damaged but so far not broken these businesses and their workers. For most of this year, Better Work’s factories were shipping about 800,000 clothing articles to the U.S. daily via the 40-hour boat ride to the Port of Miami, together earning about $50 million a month.
The factories persist because of a special trade program — HOPE/HELP, suitably upbeat acronyms for “Haitian Hemispheric Opportunity through Partnership Encouragement”, and “Haitian Economic Lift Program” — created 20 years ago. This waives the pricy 16.5% tariff a cotton T-shirt normally gets, and has unusually simple and easy rules for the sorts of fabric factories can use to make the shirt. Last authorized in 2015, HOPE/HELP is scheduled to end in September next year. So each week the uncertainty about its future prospects grows, and the prospect of its end appears already to be pulling business away. As the ILO’s staffers were writing up their report, one of their factories had shut, and the other two were temporarily closed. This week, only 13 factories appear to be open and producing. So the already substantial worries facing the seamstresses and their employers are growing rapidly more intense.
Now back to Congress, in this session’s last days. Haiti relies more heavily than any other country in the world on American ‘trade preference’ support. Haiti’s is an exceptional case in which loss of trade preference could spark a national economic crisis as well as well as harm to the workers. But an exceptional case, HOPE/HELP isn’t alone. The 24-year-old benefit for Africa, the “African Growth and Opportunity Act” — frequently termed the “cornerstone” of U.S.-African economic relations — is also set to expire next year, and the broader “Generalized System of Preferences” has been in a sort of legal limbo since 2020, with renewal serially frustrated by intense arguments over what we see as relatively minor differences in the wording of eligibility criteria, and then by ‘hostage-taking’ on unrelated topics. Putting off renewal until next year is full of risk: a new Congress with new members unfamiliar with the programs, along with typically slow agency nominations, both make timely renewal hard to imagine and outright lapse fully possible.
These three programs represent a small share of U.S. trade flows: $29 billion in imports in 2023, about 0.9% of the $3.1 trillion in total U.S. imports, and well below the $80 billion from Ireland or the $53 billion from Switzerland. Despite this modest total, HOPE/HELP, AGOA, and GSP remain of great importance to Port-au-Prince’s anxious seamstresses as they “battle the odds” against them — and (via AGOA) to their garment-industry sisters in Maseru, Antanarivo, and Nairobi, and (via GSP) to tuna cannery workers in Honiara, jewelry-makers in Yerevan, and tannery guys in Asuncion. For Congress, a few minutes’ work for the less fortunate, before the Members go home for their own Christmas holidays, would be time well spent.
Miami-based Haitian Times on remittances from expatriates — construction workers, restaurant dishwashers, professionals — as a second economic lifeline.
And what do “jobs,” “unemployment,” and similar terms mean in this context? World Bank databases say that Haiti’s labor force is about 5.2 million people — 45% in agriculture, 55% urban — with an unemployment rate of 15.7%. These figures suggest totals of 760,000 unemployed workers and 4.3 million with “jobs.” “Unemployment,” though, is a labor-market term invented in the 1880s and designed for wealthy countries in which most workers are in wage-paying jobs subject to national laws and taxes. The term, or at least its commonly understood American definition, doesn’t suit least-developed country realities in general, let alone in crisis. An actual on-the-ground WB report from 2021 guesses that even before the breakdown of government in 2022, 86% of “employed” Haitian workers, or about 4 million people, were in the “informal sector” — that is, doing irregular work in seasonal harvesting, maid and gardening work, day-labor on construction sites, and so on. These would be spottily paid, and not subject to minimum wage or occupational health and safety laws. This implies that about 500,000 Haitian jobs, such as those in the garment industry — 60,000 at the time, fewer now — offer safety inspection, minimum wage laws, and so on. The World Bank’s background on Haiti’s pre-COVID, pre-“gang era” private-sector economy.
ABOUT ED
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
Consumers and the dollars they spend are the backbone of the U.S. economy. For the last several years, consumers have grown frustrated by high prices for basic necessities like housing, food, and health care. Anger around rising prices and a high cost of living played a major role in the 2024 U.S. presidential election. Disillusionment with the “Bidenomics” agenda fueled a sense of disenfranchisement. Namely, consumers’ struggle to afford necessities was put on the back burner in favor of proposals that would benefit elite demographics, not working-class voters.
High prices in consumer-facing sectors that account for the vast bulk of spending are driven by a number of factors: inflation, economic scarcity, opportunistic price gouging, and market power wielded by powerful firms. This report by the Progressive Policy Institute (PPI) takes up the problem of market power, or the ability of powerful firms — rather than competition — to control prices.
To head off the skeptics, disentangling the role of market power from other drivers of high prices is unnecessary. There is substantial evidence that sectors that have an outsized impact on consumers’ pocketbooks lack robust competition. This results, in part, from decades of consolidation, sluggish growth in productivity, and some bottlenecked supply chains that contribute to high consumer prices.
This report asks if antitrust could be doing a better job of protecting consumers. Analysis of a number of key trends over the last 15 years indicates that the answer is “yes.” Indeed, by many measures, antitrust has lost touch with consumers. This finding is especially relevant with the changing of the antitrust guard from the Biden to Trump administrations. With little common bipartisan ground on a “populist” antitrust agenda, a scaling back or scrapping of the Neo-Brandeisian movement’s influence at the U.S. antitrust agencies is likely. This does not necessarily mean, however, that antitrust enforcement will decline in vigor.
The Biden antitrust enforcers focused on extending the reach of antitrust from traditional law enforcement to solve broader economic, political, and social problems; introducing new standards; and taming market power in the digital sector. This retooling of antitrust appeared in many ways to be tone deaf to the pleas of Americans besieged by high prices and living costs resulting from harmful consolidation and business practices. Moreover, it likely came at the expense of enforcement that more directly protects consumers’ pocketbooks.
PPI’s analysis breaks down major factors that highlight the importance of antitrust priorities focused on directly protecting consumers from the effect of market power on raising prices and their cost of living. It looks at flagging productivity in the top five sectors in which consumers spend 75% of their budgets. The analysis exposes high concentration and market power “bottlenecks” that supercharge high prices to consumers and destabilize critical supply chains, such as in health care and food. The analysis also finds lackluster merger enforcement — the most important tool for controlling consolidation that can drive up prices — in the top five consumer-facing sectors over the last 15 years.
The report concludes with policy recommendations. These range from reshuffling merger review responsibilities at the DOJ and FTC, to junking policies for approving harmful mergers subject to ineffective remedies. Other recommendations focus on how the agencies should consider the impact of market power on the stability and resiliency of critical supply chains, and call for the agencies to get up the learning curve on strengthening enforcement in consumer-facing sectors.
Given how events unfolded, it was never going to be easy for Kamala Harris. Many Democrats are convinced her campaign saved the party from an even worse result. To be fair, it achieved some real highs: she won the debate. But she never won the argument, at least not with the voters who mattered most.
The US election triggered a scary deja vu moment for those of us who had watched the 2019 UK general election from behind our sofas, hands over our eyes. The Democrats lost votes with almost everyone, almost everywhere, but, like Labour in the “red wall”, most dramatically with traditional heartland voters: working-class, low-paid, non-graduates. And, like Labour back in 2019, that lost connection with core voters had not happened overnight.
Working with the DC-based Progressive Policy Institute, we conducted post-election polling and focus groups with past Democrat voters who voted for Trump on 5 November. The work laid bare an anxious nation desperate for change. Be in no doubt, this was a change election: any candidate failing to offer the change the electorate craved had become a risky choice. Asking how voters felt about the results on 6 November, “relieved” was the word we heard most often.
Overwhelmingly, change focused on two issues: inflation and immigration. Trump enjoyed a clear lead on both. Sure, Harris had some popular policies (anti price-gouging, tax cuts, help for first-time buyers and small businesses), but these seemed sidelined in an overcrowded campaign, with voters concluding that she was not on their side and was too focused on “woke” issues.
Among working-class voters, 53% agreed the Dems had gone “too far in pushing a woke ideology”. They’ve “gone in a weird direction”, said one, “lost touch with our priorities”, said another. Worse still was the sense that any voter who disagreed with them was “a bad person”.
The nomination of Robert F. Kennedy Jr. to lead the Department of Health and Human Services comes at a pivotal moment for public health policy. Americans’ trust in public health institutions is at an all-time low, while the promise of rapidly advancing biotechnology is at an all-time high.
It is unfortunate that Kennedy seems a poor steward of both. His vaccine skepticism seems designed to relitigate public health battles of the past, while his distrust of the medical profession and pharmaceutical companies could imperil new drug discovery and approval. While the right has long questioned federal health initiatives, Kennedy’s nomination — alongside a slate of other science skeptics in key health roles — augurs a more consequential change than a reshuffling of political appointees: the Republican Party has rejected modern science. The Senate should reject this nomination due to the clear harm Kennedy would do to the nation’s health.
Rapid advancements in biotechnology promise exciting innovation in pharmaceuticals, alongside enormous potential risks. This is especially true with the development of artificial intelligence tools for drug discovery. This will be a pivotal time for the Food and Drug Administration, as the number of new drugs and novel therapeutics they have to approve dramatically increases. For example, the FDA made history in 2023 by approving the first CRISPR-based gene-edited drugs to treat sickle cell anemia. The agency will have to innovate and modernize to keep up with scientific developments.
It’s also an important moment for public health. In the wake of the COVID pandemic, trust in government health agencies has eroded. Partisanship has infected discussions of public health as climate change and dual-use technologies exacerbate the risk of future pandemics. Other than some modest internal reform at the Centers for Disease Control, the Biden administration did not give priority to fixing the structural issues that led to a shaky initial federal government response to COVID. Rebuilding public trust while balancing future pandemic risk would be a challenge for any incoming administration.
Unfortunately, Robert F. Kennedy Jr. is ill-suited to fulfill his department’s critical dual mandate to advance biomedical innovation while protecting Americans from disease. Kennedy’s unfounded skepticism of vaccines leaves America in danger of missing out on breakthrough drugs and treatments while leaving us vulnerable to diseases of the past. His strong opposition to the weight loss drug Ozempic also betrays a reflexive anti-progress attitude poorly suited to the coming acceleration of drug development. Kennedy also seems uninterested in future pandemic prevention, reportedly saying, “We’re going to give infectious disease a break for about eight years.”
Kennedy’s anti-vaccine activism warrants particular attention, given its grave real-world consequences. During a 2019 measles outbreak in Samoa that left 83 people dead, Kennedy’s organization, Children’s Health Defense, helped spread misinformation that contributed to vaccination rates dropping from 60% to 31%. Though Kennedy later claimed he “had nothing to do with people not vaccinating in Samoa,” he had visited the country months before the outbreak, supporting local anti-vaccine activists and suggesting the vaccine itself might be responsible for the deaths. Children’s Health Defense also funded the viral conspiracy film “Plandemic,” which falsely claims that influenza vaccines can cause COVID, and that the virus was somehow “manipulated.” That’s in line with his musings that COVID may have been deliberately engineered to target “Caucasians and Black people” while sparing “Ashkenazi Jews and Chinese.”
Some of Trump’s other health nominations have similar involvements with pseudoscience. Like Kennedy, Dr. David Weldon, Trump’s nominee for CDC director, believes the measles vaccine causes autism. Dr. Mehmet Oz, the president-elect’s nominee for the Centers for Medicare & Medicaid Services, has a well-documented history of promoting questionable medical treatments and products on his television show. A 2014 study in the British Medical Journal found that nearly half of his medical recommendations either lacked evidence or contradicted medical research.
Trump has proved reluctant to tout the main health policy success of his first term: Operation Warp Speed. A Progressive Policy Institute report found that the COVID vaccines saved 2.9 million lives, avoided 12.5 million hospitalizations, and saved $500 billion in hospitalization costs. This was an enormous success of government collaboration with the private sector, and it is very telling that the former president is shying away from claiming this victory.
The nomination of Robert F. Kennedy Jr. isn’t just a concerning personnel decision — it represents a dangerous turning point in American politics. While vaccine skepticism and distrust of medical institutions have long simmered on the fringes, their embrace by a major political party marks a stark departure from evidence-based public health policy. This rejection of scientific consensus comes at a particularly perilous moment: as we face evolving threats from bird flu, climate change, and emerging pathogens, while simultaneously standing on the cusp of revolutionary biotechnology breakthroughs. The Senate must reject this nomination to protect our public health institutions at this critical moment for America’s scientific future.
Peter Juul, director of national security at the Progressive Policy Institute, a center-left think tank, said the defense budget should increase given the dangerous state of the world, even though he agreed the Pentagon could be more efficient.
“It’s hard to see where you can do that right at this point, unless you’re [proposing] a massive personnel cuts,” he said. “You might be able to shave the top line a bit, but it’s not going to be this massive savings.”
On Capitol Hill, Juul said there is “more appetite” to “keep things where they are or to push them even further,” calling the hope for defense cuts “wishful thinking by progressives.”
FACT: Canada is the top export market for 36 U.S. states, and Mexico for six.
THE NUMBERS: Top export markets for U.S. states, 2023 –
Canada
36 – listed below*
Mexico
6 – Arizona, California, Kansas, New Mexico, Oregon, Texas
China
3 – Alaska, Louisiana, Washington
United Kingdom
2 – Utah and D.C.
Netherlands
1 – Puerto Rico
Japan
1 – Hawaii
Belgium
1 – Massachusetts
* Arkansas, Colorado, Connecticut, Delaware, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Vermont, Virginia, West Virginia, Wyoming.
WHAT THEY MEAN:
Some strange pre-Thanksgiving belligerence against Mexico/Canada/China: Mr. Trump threatens via social media to break up the 2019 “U.S.-Mexico-Canada” agreement by imposing 25% tariffs on Canadian and Mexican goods over migration and drug issues, with China thrown in as well. (For reference, here’s the text of USMCA’s core commitment from Article 2.4: “[N]o Party shall increase any customs duty, or adopt any new customs duty, on an originating good.”) It’s not clear how seriously to take this – see below for some likely national impacts and personal adjustments – but here’s some background:
Data: Canada and Mexico buy about a third of all American exported goods. Canada is the top export market for 36 U.S. states and Mexico for another six, including the four border states Texas, Arizona, New Mexico, and California. By one measure, New Mexico is most reliant of all states on Mexican customers, who buy $3.5 billion — 70% — of their $5 billion in total overseas sales. By another, it’s Texas, whose massive $130 billion in exports to Mexico is 5% of state GDP, even before adding the $36 billion in Texan sales to Canada. North Dakota meanwhile relies most heavily on Canada – 82% of $8.8 billion in worldwide exports of wheat, oil, farm machinery, etc. — with Maine, Michigan, and West Virginia all around 50%. To give the overall picture, U.S. export data in 2023 looked like this:
U.S. Export Sector
To World
To Canada/Mexico
Canada/Mexico share
All goods
$2.018 trillion
$678 billion
33.6%
Manufacturing
$1.601 trillion
$594 billion
37.5%
Agriculture
$174 billion
$56 billion
32.2%
Energy & metal ores
$351 billion
$81 billion
23.1%
A big tariff on incoming goods from Canada and Mexico would have three basic effects. The most direct would be higher U.S. prices, especially in the energy, car, appliance, and food industries that make up the largest share of North American trade. Mexico, for example, is the U.S.’ largest source of winter vegetables and fruit, supplying grocery stores this past February with 188,640 tons of tomatoes, 128,330 tons of peppers, 106,460 tons of avocadoes, 44,440 tons of lemons and limes, and other fresh produced valued at $2.25 billion — along with TV sets, cars, and home appliances, plus more cars, the largest single stream of energy imports, beef, cooking oil, and beer from Canada. The second and third effects are less direct but predictable: American exporting factories, labs, farms, ranches, and mines with Canadian and Mexican customers would (a) risk retaliation in kind, and (b) lose customers as Mexican and Canadian firms reliant on U.S. goods go bankrupt or lose out to competitors elsewhere in the world. Some illustrative examples:
Energy and Price Increases: Energy is the largest single import from Mexico and Canada. In 2023, American refineries and power plants bought $145 billion worth of crude and refined oil, gas, and electric power from the two countries. This was about 60% of all U.S. energy imports. ($122 billion from Canada, $23 billion from Mexico.) A 25% tariff on Mexican and Canadian energy adds a face value of $36 billion. Some might be replaced over the course of 2025 by Persian Gulf oil at market prices; on the other hand, the tariff itself might raise world market prices.
Export Losses (1) – Agriculture and Retaliation: When one country imposes tariffs on another’s goods, particularly in violation of an existing agreement, the offended country frequently retaliates by doing the same thing. The 2018/19 bout of tariffs on steel and most Chinese-made goods brought retaliatory tariffs against U.S. goods in China, the European Union, India, Turkey, and several other countries. Some U.S. firms responded by moving overseas to dodge the hit; Harley-Davidson, for example, moved some of its bike production from Milwaukee to India to avoid the EU tariffs. Others didn’t have that option. Farmers, unable to move production and then as now selling lots of products to China, took a heavier blow, leading the first Trump administration to institute a $20 billion annual reparations program for their lost income. Canada and Mexico now buy a third of all U.S. farm exports, and adding China in brings the total to half of last year’s $174.2 billion ag export total, putting about 10% of all U.S. farm income at risk.
Export Losses (2) – New Mexico Manufacturing and Customer Loss: Retaliation, though, wouldn’t be the only harm to come from the breakup of USMCA. Lots of American exports to Canada and Mexico — hundreds of billions of dollars worth of them, mainly in sophisticated manufacturing — go not to Canadian and Mexican homes and consumers but to industrial buyers. For example, New Mexico’s $3.5 billion in exports to Mexico includes $1.7 billion in computer parts, $230 million in magnetic and optical media, $290 million in electrical components, and $190 million in semiconductor chips — that is, high-tech inputs bought by Mexican auto plants and factories assembling refrigerators, computers, and other appliances, and consumer electronics. Imposing a high 25% tariff on the resulting cars and TVs as they flow back to the U.S. will naturally cut sales and, therefore, reduce not only the makers’ production and job counts but those of their suppliers in Las Cruces, Albuquerque, and the just-opened Rio Rancho semiconductor fab.
New Mexico’s risks, though probably particularly high, are typical rather than unusual. How much of North Dakota’s $580 million in farming machinery exports to Canada would survive? Ohio’s $21.8 billion in exports to Canada, with its $5 billion worth of metals and auto parts destined for Ontario and Quebec auto plants? What fraction of Texas’ $10.8 billion in semiconductor chips, $5.1 billion in electrical equipment, and $7.0 billion in auto parts to Mexico?
To sum up: Among big powers, the U.S. is unusually fortunate in having friendly and peaceful relationships with its two large neighbors. These involve deep and complex economic ties, which often raise policy problems and challenges but, in general, serve all three countries well. Replacement of the earlier North American Free Trade Agreement with the “USMCA” in 2020 has had mixed results — some useful innovations, also some things that seem to be working less well and may have been over-negotiated. If the agreement is still there next year, its scheduled review in 2026 might help fix some of the problems. Abandoning it to provoke an economic shock and pick fights with neighbors and allies, though, is much more likely to inflame than ease border problems – and generally seems unsound and a bad idea. Again, it isn’t clear how serious this really was. But just in case, and moving from unwise national policy to its possible personal impacts: make the down-payment this month if you’re buying a car or refrigerator, and with heating and gas as well as food prices maybe about to jump, take some time in mid-January to fill your tank and stock up on groceries.
FURTHER READING
“USMCA” text (see Chapter 2 on “National Treatment and Market Access for Goods,” Article 2.4, for tariff policy).
… and from the U.S. Department of Commerce, interactive U.S. state export figures for all countries, the world, and 323 “NAICS-4” products from oil seeds and grain at 1111 to “miscellaneous manufacturing” at 3999.
PPI looks at U.S./Canada/Mexico auto trade four years after USMCA and wonders whether the renegotiation of NAFTA tried to do a little too much in this area.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
Recorded live at the Centre for Progressive Policy’s Inclusive Growth Conference on 28th November, this special episode The Power Test looks at where we are six months into the new Labour government and what it needs to do to deliver its promise of a decade of national renewal.
Following the Budget, the reelection of Donald Trump in the US, farmer protests, and a rumoured government ‘relaunch’, Sam and Ayesha, together with Chief Executive of the New Economics Foundation Dr Danny Sriskandarajah, CPP’s Director of Place and Practice Annabel Smith, and Power Test regular and Director of the Project on Center-Left Renewal at the Progressive Policy Institute Claire Ainsley, look at what Labour needs to do to deliver, restore trust in politics and survive.
Many Ukrainians, used to making the best of bad situations, reacted to Donald Trump’s reelection with caustic humor. Among the most heard jokes play off his promise to end the war with Russia in 24 hours. “Has everyone set their timers?” one man asked on Facebook. But underneath the repartee, Ukrainians are tired—ground down by a war, now all but stalemated, that will soon enter its fourth year. So they wait, half-frightened, half-hopeful, for what could be a disastrous defeat or a welcome reprieve.
Few here doubt that Trump’s team will push for negotiations, requiring compromises from both sides but sacrifices mostly from Ukrainians. Morally, this is monstrous. Ukrainians are guilty of nothing but building their country, growing its economy, and yearning for an independent, democratic future. The Kremlin’s crimes, in contrast, are unending. They include the unlawful annexation of Crimea in 2014, a ten-year proxy war in eastern Ukraine, the unprovoked 2022 invasion, the kidnapping of some 20,000 Ukrainian children, and nearly three years of deadly missile strikes on schools, hospitals, and civilian targets in cities across a country of 40 million, to name just a few.
The world’s leading champion of might-makes-right, Vladimir Putin, flouts international norms and sides unashamedly with America’s enemies, from Iran to North Korea. Yet, under Trump, Kyiv and Moscow will now be treated as moral equivalents, two equal parties across a negotiating table, each expected to give a little to get a deal.
But indignation and outrage will do little to help Ukraine in the months ahead as the two sides jockey and the Trump team fine-tunes its approach. Even as the grim game plays out, some outcomes would be better than others—a relatively good peace versus an unspeakable, debilitating deal.
Preparing for a career and entering the workforce are more challenging tasks than ever for young people. They must navigate four job-launch pain points that involve career exposure, career aspirations, career skills, and career experience. These pain points are the result of a fundamental disconnect young people experience between the career preparation K-12 schools offer them and the career preparation they want from K-12 schools.
K-12 school systems can fix this problem by putting in place a systematic approach to career education and career development for students. As National Career Development Month comes to a close, let’s examine these job-launch pain points and suggest a solution.
