| July 2006
Financial & Monetary Policy | Economic Development | Intellectual Property | Labor & Employment | WTO |
Industries: Automobiles - Aviation - Pharmaceutical Industry -
B1 - Why Dollar Hegemony Is Unhealthy
Pallye, Thomas I.
YaleGlobal Online, 20 June 2006
"The US dollar holds value for more countries than any other world currency and comprises about two thirds of world’s official foreign-exchange holdings. This dependence allows the US to run large trade deficits in purchasing a cornucopia of goods – from Porsches to t-shirts – by distributing paper IOUs in place of actual dollars. Because of a global faith in the voracious appetite of the US consumer, many countries are complacent about the dollar’s reserve-currency role – and even profit on sales of US currency in their own economy. [The author] reviews economic theories that explain the dollar’s enormous global worth – and concludes that other nations’ neglect of investment in their own domestic markets and over-reliance on the American consumer is fraught with danger." Thomas Palley runs the Economics for Democratic and Open Societies Project. Fulltext
B2 - Foreign Investment and National Security
Larson, Alan P.; Marchick, David M.
Council on Foreign Relations, July 2006, CSR #18, 47p
“Responding to recently proposed Congressional legislation in the wake of the Dubai Ports World controversy, a new Special Report argues that the “Committee on Foreign Investment in the United States has proved to be—and continues to be—an effective tool for vetting the national security concerns associated with foreign investment. If Congress fails to achieve the right balance, U.S. companies and workers could feel the repercussions for years to come.” Alan P. Larson, senior adviser at Covington and Burling, former Undersecretary of State for Economic, Business, and Agricultural Affairs. David M. Marchick, partner at Covington and Burling. Fulltext
B3 - Testimony before the House Subcommittee on Commerce, Trade, and Consumer Protection, and the Committee on Energy and Commerce
Holtz-Eakin, Douglas
Council on Foreign Relations, July 11, 2006.,online edition
Among developed economies, the United States has performed uniquely well in the past decade. The key characteristic of this outstanding growth has been a post-1995 acceleration in U.S. productivity—that summary measure indicates the ability of an economy to produce the same goods more cheaply, generate a greater standard of living than in the past from the same people, factories, and equipment, and to use innovation to produce different and higher-quality goods than in the past. In short, productivity is the single-best summary measure of the overall long-term performance of an economy and the United States stands out in recent years.Douglas Holtz-Eakin, Paul A. Volcker Chair in International Economics and Director of the Maurice R. Greenberg Center for Geoeconomic Studies. Fulltext
B4 - Accelerating the Globalization of America: The Role for Information Technology
Mann, Catherine L.
Institute for International Economics, June 2006. Executive Summary. 14p
Executive summary of a new book which “traces the globalization of the IT industry, its diffusion into the U.S. economy, and the prospects and implications of more extensive technology - enabled globalization of products and services.” “Information technology (IT) was key to the superior overall macroeconomic performance of the United States in the 1990s—high productivity, high growth, low inflation, and low unemployment. But IT also played a role in increasing earnings dispersion in the labor market—greatly rewarding workers with high education and skills. This U.S. performance did not happen in a global vacuum. Globalization of U.S. IT firms promoted deeper integration of IT throughout the U.S. economy, which in turn promoted more extensive globalization in other sectors of the U.S. economy and labor market.” Catherine L. Mann, senior fellow at the Institute for International Economics. Fulltext
B5 - Global Economic Prospects 2006/2007
Mussa, Michael
Institute for International Economics, Presentation at the ninth semiannual meeting on Global Economic Prospects, April 11, 2006. 18p
“After the slightly more than 5% real GDP growth in 2004 — the highest in a generation — the world economy achieved nearly 4½ % growth in 2005. Despite sharp rises in world energy prices, this growth was still more than ½% above the potential global
economic growth rate. For 2006, the prospect is for continued solid global economic growth but at a slightly slower pace than 2005 — about 4% on a year-over-year basis… This will mark the first time since the early 1970s when the world economy has expanded at more than a 4% annual rate for four years running. Substantial uncertainty is attached, however, to global growth prospects for 2007 — linked primarily to uncertainty about the degree of monetary tightening that will be needed to insure against an undesirable rise of inflationary pressures and risks from energy prices, international payments imbalances, possible overextension in some financial markets, and the possibility of mutation of the H5N1 bird flu virus to intrahuman contagion.” Fulltext
B6 - Europe
Alesina , Alberto
National Bureau of Economic Research, NBER Reporter, Summer 2006, pp8-10
“Per capita income in Continental Western Europe (in short, Europe) was catching up with the United States from the end of the Second World War until the mid-1980s; from 1950 to about 1975, we speak of a European miracle. Then, something changed. The United States re-emerged from the difficult decades of the 1970s with a renewed political energy that led to
deregulation, increased competition, reduction of marginal tax rates, and restructuring of corporations, which later facilitated the immediate adoption of the innovations from the information revolution. Europe, instead, seemed "stuck:" incapable of gathering sufficient energy to reform itself. This was especially the case for the largest countries: Germany, France, Italy, and Spain.” Alesina is a Research Associate in the NBER’s Programs on Public Economics, Monetary Economics, Political Economy, and Economic Fluctuations and Growth. He is also a professor of economics at Harvard University. Fulltext
B7 - Defending Intellectual Property Rights in the BRIC Economies
Bird, Robert C
American Business Law Journal, Summer 2006, v43, #2, 47p
“Protecting intellectual property rights in Brazil, Russia, India, and China, collectively known as the BRIC economies, has become an important policy focus of the U.S. government. These important emerging economies have not yet fully developed intellectual property protection and enforcement mechanisms. Nonetheless, U.S. firms cannot afford to ignore the market
opportunities in these rapidly growing nations. The U.S. government has threatened punitive measures against governments who do not provide adequate intellectual property protection. The result, however, is that piracy in the BRIC economies remains widespread. The lesson to be learned is that coercion alone cannot adequately change the intellectual property practices of developing countries. Unilateral initiatives represent an important and practical alternative to coercion as a strategy to protect intellectual property rights abroad. While coercion will still have its place as an option of last resort, unilateral initiatives by an economically dominant power have the effect of increasing trust between competing economies." Robert C. Bird, University of Connecticut. Fulltext
B8 - Supervisor in Name Only
Eisenbrey, Ross ; Lawrence, Mishel
Economic Policy Institute Issue Brief #225, July 12, 2006
"The National Labor Relations Board (NLRB) will soon decide three cases, known collectively as the Kentucky River cases, which could change the basic rights of workers in America. If the NLRB accedes to the demands the employers are making in these cases to significantly broaden the definition of "supervisor," hundreds of thousands of employees could be stripped of their contract protections and millions more across the economy could be denied the right to form unions or engage in collective bargaining." Ross Eisenbrey is EPI's vice president and policy director.Lawrence Michel is the president of Economic Policy Institute. Fulltext
B9 - Minimum Wage
Economic Policy Institute Issue Guide, Updated July 2006, 25p
This online guide offers downloadable data, charts, fact sheets, and links to other sources of information on this issue on the federal minimum wage, as well as an updated list of states that have raised their minimum wage above the federal level. Related EPI research papers offer in-depth analysis. Fulltext
B10 - The Influential Tourist
Allegretto, Sylvia A., Bivens, L. Josh
Foreign Policy, Jul/Aug 2006, #155, pp26-27
"For much of the world, ‘vacation’ simply means wishful thinking; for others, the entire month of August. But many countries are discovering that a rested worker means a better worker, and that the power of the tourist dollar should never be underestimated. Those summer holidays may be a country’s ticket to economic success." The article discusses vacation laws in countries around the world. Countries like Germany, France, and Britain require employees to take yearly vacations while simultaneously offering nearly double the amount of vacation time of American companies. Studies reveal that this forced leisure can directly impact employee productivity levels. Both authors are economists at the Economic Policy Institute. Fulltext
B11 - The Demise of Doha
Stelzer, Irwin
Hudson Institute Update, July 31, 2006 (A version of this Update appeared in The Sunday Times ( London).
Stelzer comments on the collapse of the Doha talks and the possible consequences on U.S. trade policy: “Meanwhile, America goes ahead with its program of negotiating bilateral agreements to open markets for insurers and other financial services firms. Twelve Free Trade Agreements (FTAs) already are in force (with Chile, Singapore, Central America and Australia, among others), seven more are pending approval by Congress or the other signatory, and eleven more are being negotiated. The lure of access to America’s rich, free-spending consumers is an attraction many countries find sufficiently irresistible to persuade them to open their own markets to American products, even with Doha a failure. None of this is to say that the failure of the Doha round is of no consequence. But the US is better positioned than most to capitalize on available opportunities.” Irwin Stelzer is a Senior Fellow and Director of Economic Policy Studies for the Hudson Institute. Fulltext
B12 - Delivering on Doha: Farm Trade and the Poor
Elliott, Kimberly Ann
Institute for International Economics (IIE), July 2006. Introduction. 12p
From the introduction to a recent book published by IIE: “Agricultural market liberalization is essential in achieving a successful Doha Round agreement because these are the most protected markets remaining in most rich countries. But the implications for developing countries, especially the poorest, are more complex than the current debate suggests. This volume examines the structure of agricultural support in rich countries and explores the challenges as well as opportunities that
developing countries might face if the Doha Round succeeds in reforming OECD agriculture policies. Kimberly Ann Elliott, senior fellow at the Institute for International Economics since 1982. She also holds a joint appointment with the Center for Global Development. Fulltext
B13 - Neoliberalism: Myths and Reality
Hart-Landsberg, Martin
Monthly Review, Apr 2006, v57, #11, pp1-17
“Hart-Landsberg discusses the myths and reality of neoliberalism. The WTO and agreements, such as the Free Trade Area of the Americas, seek to promote free trade in order to enhance efficiency and maximize economic well being. This focus on trade hides of broader political-economic agenda: the expansion and enhancement of corporate profit making opportunities.” Martin Hart-Landsberg teaches economics at Lewis & Clark College in Portland, Oregon. Fulltext
Industries:
B14 - China’s Impact on the U.S. Automotive Industry
Cooney, Stephen
Library of Congress, Congressional Research Service, updated April 4, 2006, 26p.
“Chinese auto parts exports are already making inroads into the United States. While U.S. motor vehicle trade with China was insignificant in 2005, the United States imported $5.4 billion in parts from China, while it exported about one-tenth of that amount. China accounted for about 6% of U.S. auto parts imports in 2005, but the amount has quadrupled since 2000. Many of these imports are aimed at the aftermarket, as most of what China now exports to the U.S. market are standard products such as wheels, brake parts and electronics. But with high rates of investment in China by the leading U.S. manufacturers of both cars and parts, major companies such as GM look to increase sourcing from China.” Stephen Looney is industry specialist in the Resources, Science and Industry Division. Fulltext
B15 -
The Road Ahead for the U.S. Auto Industry - 2006
Couch, Liz
U.S. Department of Commerce, International Trade Administration, Office of Aerospace and Automotive Industries, April 2006, 64p
“Despite Hurricane Katrina and increased gas prices, 2005 was another good year in Terms of overall U.S. sales. The U.S. market for cars and light trucks continues to be strong with sales of 16.9 vehicles in 2005, marking the sixth consecutive year with sales above 16 million units. However, is was a difficult years for some of the individual automakers … The domestic automakers continued to face challenges such as a loss of U.S. market share to foreign competitors, high legacy and commodities costs, and consumer expectations of continued high incentives.” This report provides an outlook into expected development sin 2006. Liz Couch is affiliated with the Office of Aerospace and Automotive Industries. Fulltext
B16 - Automotive Parts Market and Industry Assessment 2006
U.S. Department of Commerce, International Trade Administration, Office of Aerospace and Automotive Industries, April 2006, 81p.
”The U.S. automotive parts industry can expect a difficult year in 2006 and beyond. The industry can expect more departures and consolidations of suppliers as profit margins are squeezed. Automakers and suppliers will experiment with innovative and alternate business models to reduce financial pressure. Automotive parts from China will continue to grow and account for a growing share of U.S. automotive parts imports. The U.S. automotive parts trade deficit with China will likely continue to grow the next few years as exports to China will likely not keep up with imports from China. Automotive parts companies will continue to move production to China and other low-wage countries like India, Mexico, and Eastern Europe. The U.S. can therefore expect to see continued growth of automotive parts imports and further export declines.” Fulltext
B17 - Wanted: A Security Standard
Paylor, Anne
Air Transport World. June 2006, v.43, #6, pp. 36-39
"As the world's governments increasingly adopt Advance Passenger Information (API) as a requirement for air travelers, airlines once again find themselves on the brink of a complex proliferation of standards. The data collated by airlines in their reservations and departure control systems increasingly are seen by governments as one of the most effective means of improving the management of their national borders. The International Air Transport Association is concerned about different governments wanting different information, which makes it difficult for the airlines to create a single centralized system. SITA believes there needs to be an interface between governments and the airlines responsible for filtering, formatting, translating and transmitting the requested data. Airlines could continue to use their legacy systems secure in the knowledge that the interface service provider was responsible for ensuring that the required data were supplied in the correct format to the appropriate government agencies." Fulltext
Pharmaceutical industry
B18 - Of Pills and Profits: In Defense of Big Pharma
Huber, Peter W.
Commentary, Jul/Aug 2006, v122, #1, pp21-28
The pharmaceutical industry has come up for criticism in recent years whether in popular novels (lie John le Carré’s ‘The Constant Gardener’) or non-fiction indictments. Extraordinary advances in bioengineering have, however, have transformed pharmacology. Government funding paid for much of the underlying research -- and continues to pay for it, just as the industry's critics charge. The author points out, however, that worldwide some 600 publicly traded pharmaceutical and biotechnology companies worldwide are capitalized at over $1.5 trillion and more constructive criticism would focus on “streamlining regulation, curbing litigation, and unleashing prices to make vaccines as alluring to Big Pharma as Viagra and Vaniqa." Peter W. Huber is a senior fellow of the Manhattan Institute. Fulltext
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