InfoAlert

February 28, 2007

American Economy | Globalization | Trade |
Industries: Pharmaceutical Industry

B1 - Realizing America's Economic Potential: A Growth Agenda for the New Abundant Economy Economic Growth Program
New America Foundation, Policy Papers, October 30, 2006
Over the past 15 years, two developments have created conditions for a potential new golden era of economic growth and prosperity. First, the information technology revolution, the revolution in business and finance, and the efficiency revolution in materials and energy are factors for productivity growth. Second, the integration of China, India, and the former Soviet Union into the world economy has resulted in surpluses in labor, capital, and productive capacity. But the new abundant economy can bring with it a new set of challenges, for which many of the supply-side policies of the 1980s and 1990s are inappropriate. This report calls for a transition strategy to stimulate both investment and demand, and a global program to increase consumption in newly industrialized countries like China, as the best way to avert the next recession and put the U.S. economy on a more sustainable path to realizing its full growth potential. Fulltext

B2 - How Cronyism Harms the Investment Climate
Desai, Raj M.
Global Views 2007-01, January 2007, online edition, 8p
"Cronyism undermines markets in several ways. It increases the costs of doing business for firms excluded from inner, "favored" circles. It encourages firms to spend more on cultivating political ties and less on innovation. It allows regulators and policymakers to benefit privately from relationships with certain firms. Reducing the inequality in influence between the most-powerful and least-powerful firms — the "influence gap" — can limit the harmful effects of cronyism. This can be done through support for greater public accountability, anti-monopoly enforcement, and more inclusive consultation mechanisms." Raj M. Desai, Visiting Fellow, Wolfensohn Center for Development, Global Economy and Development. Fulltext

B3 - Not Everyone Hates Sarbox; The Much Maligned Rules as a Big Hit with Investors
Henry, David
Business Week, January 29, 2007, #4019, p37
“There has been no shortage of public outcry over Sarbanes-Oxley, the controversial 2002 accounting reform legislation that requires top corporate executives to fill out reams of new forms and personally certify their financial reports…. The complaints have been so passionate that regulators are now planning to loosen the rules, probably before the year is out. Not so fast, says a growing chorus of investors. Lost amid all the boos over SarbOx, they say, are some major benefits. The biggest: SarbOx and related reforms have produced much more reliable corporate financial statements, which investors rely on when deciding whether to buy or sell shares.” David Henry is a senior writer with Business Week. Fulltext

B4 - American Made: The Impact of Immigrant Entrepreneurs and Professionals on U.S.Competitiveness
Anderson, Stuart; Platzer, Michaela
National Venture Capital Association, November 2006, online edition, 40p
"Immigrant entrepreneurs and professionals contribute significantly to job creation and innovation in the United States. This analysis shows the striking propensity of immigrants to start and grow successful American companies, particularly in the technology field. The study’s findings reflect the benefits of an open policy toward legal immigration. However, it also
reveals that current restrictions on skilled immigrants are likely to result in less job creation and innovation for America." Stuart Anderson is executive director of the National Foundation for American Policy. Michaela Platzer is presidentof Content First, a full-service public policy research services firm. Fulltext

B5 - Responding to Financial Crises
Frankel, Jeffrey
Harvard University, Kennedy School of Government, Faculty Research Working Paper Series, February 2007, 13p
This paper details some of the lessons from several past crises of varying nature: inflation crises, stock market crashes, bond market crashes, housing crashes, and various international crises, including the possibilities of a hard landing for the dollar, emerging market crises, oil shock, geopolitical crisis, and trade collapse. It draws heavily on U.S. historical examples from the last four decades. Jeffrey Frankel is Harpel Professor of Capital Formation and Growth Kennedy School of Government Harvard University. Fulltext

Globalization

B6 - The Wealth of Modern Nations
Makin, John H.
American Enterprise Institute, Economic Outlook, January 4, 2007, online edition
"Top economic policymakers from China and the United States met in Beijing in mid-December 2006 for the first round of what has been called the U.S.-China Strategic Economic Dialogue (SED). There is a lot more at stake than the level of China’s currency when the world’s premier economic sprinter — China — meets with the world’s premier economic long-distance runner — America. The fundamental issue at hand is the creation and preservation of wealth of two nations, each of which has much to teach the other. The right outcome from the dialogue would provide a substantial boost to the global economy in coming years, while the wrong outcome would threaten the continuation of global prosperity.” John H. Makin is a visiting scholar at AEI. Fulltext

B7 - From the G8 to the "E8": Is the Globalization Tide Turning?
Marber, Peter
World Policy Journal, Fall 2006, v23, #3, pp42-52
“More than ever, the global economy needs a broader forum for managing multidimensional cross-border relations. An expanded, evolving group derived from the G8 might be a logical first step in many needed multilateral reforms that would reshape old institutions, and form new ones.” Analyzing “the Emerging 8, or E8” - which would include China, India, Brazil, Indonesia, South Africa, South Korea, Turkey, and Mexico – the author points to a power shift in a world in which many emerging markets are now among the most dynamic economies and are heavily intertwined with the G8. Peter Marker is Global Head of GEM Fixed Income and Currencies for HSBC Halbis Partners and teaches at the Columbia School of International and Public Affairs. Fulltext

B8 - How Globalization Went Bad
Weber, Steven; Barma, Naazneen; Kroenig, Matthew; Ratner, Ely
Foreign Policy, Jan/Feb 2007, #158, pp48-55
“A shift in the global balance of power would, in fact, help the United States manage some of the most costly and dangerous consequences of globalization. As the international playing field levels, the scope of these problems and the threat they pose to America will only decrease. When that happens, the United States will find globalization is a far easier burden to bear.” Steven Weber and three co-authors explain "How Globalization Went Bad" in the current issue of Foreign Policy, warning that globalization is helping to encourage crime, terrorism and the spread of disease. Steven Weber is professor of political science and director of the Institute of International Studies at the University of California, Berkeley. Naazneen Barma, Matthew Kroenig, and Ely Ratner are Ph.D. candidates at U.C., Berkeley, and research fellows at its New Era Foreign Policy Center. Fulltext

B9 - Industrial Revolution 2.0
van Agtmael, Antoine
Foreign Policy, January/February 2007,#158, pp40-46
"The author says Western protectionism has been a hindrance for Western companies. Protectionist policies in a globalizing economy generally led to a false sense of security, a reluctance to streamline, and a lack of innovative thinking in industries such as steel, automobiles, electronics and cement. Meanwhile, he notes, emerging market companies are increasingly competitive, with many firms capable of attaining world class status. In 1988, there were just twenty companies in emerging markets with sales over $1 billion. Last year, there were 270, including at least 38 with sales exceeding $10 billion. This is not a simple case of unsophisticated makers of low-cost, low-tech products reaping the rewards of cheap labor, he observes -- many of these firms are high-tech, capital intensive and operate under sophisticated marketing and management strategies. This does not mean that Western economies are doomed to “lose”, he emphasizes. The world economy is not a zero-sum game, says van Agtmael, and globalization should benefit any company willing to adapt and innovate to maintain a competitive edge." Antoine van Agtmael, is founder and chief investment officer of Emerging Markets Management L.L.C." Fulltext

Trade

B10 - Breaking the Doha Deadlock
Polaski, Sandra
Carnegie Endowment, Policy Outlook No. 31, January 2007
Sandra Polaski argues that “the claim that developing country agricultural markets are closed to U.S. exports and must be prized open during the Doha Round is not supported by the facts. Polaski maintains that a favorable deal is available if the U.S. can find its way out of the corner it has backed in to. Congress can and should help, in order to achieve benefits for the U.S. economy as a whole and the wider U.S. interests of global growth, stability and poverty alleviation.” Sandra Polaski is the director of the Trade, Equity, and Development Project at the Carnegie Endowment for International Peace. Fulltext

B11 - Featuring the President as Free Trader: Television News Coverage of U.S. Trade Politics
Rankin, David M.
Presidential Studies Quarterly, Decembe5 2006, v36, #4; pp633-660
"This article analyzes national television news coverage of U.S. trade politics from 1988 to 2002, a period consisting of relatively visible debates over free trade agreements and trade relations. It examines how television news coverage of trade emphasizes foreign and domestic conflict and national threats and challenges, which coincide with the significant media focus on presidential trade leadership and the president's rhetorical support for free and freer trade. The article thus explores how media coverage of trade provides the president with a clear and consistent mediated advantage over political opposition, including congressional members and interest groups, when it comes to the nation's trade direction and policy." David M, Rankin is associate professor of political science at the State University of New York, Fredonia. Fulltext

B12 - Bilateralism -- A Radical Shift in U.S. Trade Policy: What Will It Mean for Agricultural Trade?
Kerr, William A.; Hobbs, Jill E.
Journal of World Trade, December 2006, v40, #6, pp1049-1058
"The article discusses the shift of U.S. trade policy to bilateralism and its effect on agricultural trade. The U.S. has pursued trade liberalization almost exclusively in multilateral forums. This has forced countries that wish to improve and secure access to the U.S. market to actively participate in the multilateral trade liberalization process. Since 2003, the U.S. has had Preferential Trade Agreements with many other countries signaling a shift in trade policy that has attracted the attention of governments." Order Article

B13 - Great Controversies: Developing Countries and the Collapse of the Doha Round: A Forum
Akyüz, Yilmaz; Milberg, William; Wade, Robert
Challenge, November/December 2006, v49, #6, pp6-19
"The World Trade Organization round of negotiations first established at Doha, Qatar, in 2001 collapsed in the summer of 2006. To many, this was an unimaginable failure and one of the largest obstacles the long march toward worldwide free trade had ever faced. This articles presents three observers with less conventional views on why the Doha Round failed and what the consequences may be." Yilmaz Akyüz is former director of the Division on Globalization and Development Strategies and chief economist of the United Nations Conference on Trade and Development (UNCTAD). William Milberg is associate professor of economics at the New School and faculty research fellow at the Schwartz Center for Economic Policy Analysis. Robert Wade is professor of political economy at the London School of Economics. Order Article

Industries:

Pharmaceutical Industry

B14 - The Human Cost of Federal Price Negotiations: The Medicare Prescription Drug Benefit and Pharmaceutical Innovation
Zycher, Benjamin
Manhattan Institute for Policy Research, Medical Progress Report #3, November 2006
“In the short run, federal price negotiations would allow some consumers to receive medicines at lower prices, or, alternatively, would yield savings for federal taxpayers. The longer-term human costs of government price-negotiation, however, are likely to be large and adverse. This paper estimates that investment in new drug research and development would decline by approximately $10 billion per year. It estimates as well the effect of reduced pharmaceutical R&D investment on American life expectancies, or expected ‘life-years’. Specifically, this work projects that federal price negotiations would yield a loss of 5 million expected life-years annually, an adverse effect that can be valued conservatively at about $500 billion per year, an amount far in excess of total annual U.S. spending on pharmaceuticals.” Benjamin Zycher is Senior Fellow at the Manhattan Institute for Policy Research. Fulltext