October 28, 2021

Obama’s Economy of Tomorrow, Driven by Factories and Schools

To pay for a series of programs he deemed crucial to the future and reduce the long-term budget deficit, Mr. Obama also called for cuts to Social Security and Medicare, putting him at odds with many other Democrats. They instead see those programs, created by previous Democratic presidents, as sacrosanct.

Republicans, meanwhile, greeted the budget with criticism, and most parts of it are unlikely to become law.

But it gave Mr. Obama a chance to lay out his plan for tomorrow’s economy, centered on manufacturing, education, alternative energy, infrastructure and science.

“Our economy is adding jobs — but too many people still cannot find full-time employment. Corporate profits have skyrocketed to all-time highs — but for more than a decade, wages and incomes have barely budged,” Mr. Obama wrote in a message addressed to Congress. “It is our generation’s task to reignite the true engine of America’s economic growth — a rising, thriving middle class.”

The budget puts particular emphasis on education and manufacturing. In Mr. Obama’s view, both are critical to widespread economic growth.

At the center of his education agenda is a program that would guarantee public preschool for all 4-year-olds from families with low or moderate incomes. To pay for the plan, the administration has proposed an increase in federal cigarette taxes to $1.95 from $1.01 per pack. That would cover the $66 billion federal contribution to the cost of providing preschool over 10 years and the $11 billion cost of home visiting programs for poor families.

The budget also called for a total of $12.5 billion over the next two years to preserve teaching jobs and increase hiring as the economy recovers.

Grover J. Whitehurst, a senior fellow at the Brookings Institution, noted that the Obama administration was continuing its education policy of using federal money as an incentive to drive its overhaul. Many of the programs require states to comply with administration priorities to get financing.

“This is a very activist budget,” Mr. Whitehurst said. “The administration intends to use the mechanism it has used successfully to impose its policy views widely on states and, in some cases, districts.”

On manufacturing, Mr. Obama proposed some small-scale programs, including a $1 billion initiative to build manufacturing “hubs” where businesses would partner with universities and federal agencies, and a new tax credit to support communities with manufacturing bases. The White House would also increase federal research and development spending, which benefits manufacturing as well as other industries, like health care and biotechnology, to $143 billion.

Some economists question just how big a driver of job growth manufacturing can be. More companies are bringing jobs back to the United States, in no small part because of real declines in American wages. But even with the recent job growth, there are about two million fewer manufacturing jobs now than there were right before the economy tipped into recession. There are about seven million fewer manufacturing jobs than there were in the late 1970s, when employment in the sector peaked.

Manufacturing simply requires fewer workers than it once did. Factories have become vastly more productive, as processes that were once done laboriously by hand are increasingly done by machine.

As a result, much of the recent job growth has been not in low-wage, low-skill production line work, but in higher-wage, higher-skill positions. But the downside is that manufacturing probably will not be a huge driver of job growth in the coming years, with housing and health care being the more likely bets.

Article source: http://www.nytimes.com/2013/04/11/us/obamas-economy-of-tomorrow-driven-by-factories-and-schools.html?partner=rss&emc=rss

Michigan City of Troy, Led by Tea Party Mayor, Rejects Federal Dollars

Water flows uphill.

A city turns down $8.5 million in federal grant money.

In what could be a new high water mark of anti-Washington sentiment, the city of Troy, Mich., is rejecting a long-planned transportation center whose construction would have been fully financed with federal stimulus money.

The terminal, which would help Troy become a transportation node on an upgraded Detroit-to-Chicago Amtrak line, was hailed by supporters as a way to create jobs and to spur economic development. But federal money is federal money, so with the urging of the new mayor, who helped found the local Tea Party chapter, the City Council cast a 4-to-3 vote this week against granting a crucial contract, sending the project into limbo.

“There’s nothing free about government money,” Mayor Janice Daniels said in an interview. “It’s never free, and it’s crippling our way of life.”

Other Republican officeholders have said “Thanks, but no thanks” to federal money for high-speed rail: Gov. Scott Walker of Wisconsin rejected an $810 million federal grant to extend passenger rail from Milwaukee to Madison; Gov. Chris Christie of New Jersey killed a project to dig a new commuter rail tunnel under the Hudson River. But those actions have generally involved criticism of the underlying logic of the projects, or projections of enormous costs to be borne down the line by state and local governments.

The Troy transit center’s construction, by comparison, required no local contribution, and its predicted annual maintenance cost of $31,000 was, in the context of the city’s $50 million budget, “de minimis,” said Mark Miller, the assistant city manager.

The federal government’s largess is no reason to build the transit center when the national debt stands at $15 trillion, Mayor Daniels said.

Yet if the money does not go to Troy, it will not be used to pay down the national debt; it will be redirected to other projects around the country.

Taking Tea Party reasoning to the local level has outraged supporters of the transit center, which has been in the works for a decade. Michele Hodges, the president of the Troy Chamber of Commerce, which supports the transit project, said that her organization “will be a pit bull for what’s best for this community.”

David A. Kotwicki, a local lawyer, noted that members of Congress might talk tough on spending, but that they still bring projects home to their districts. The vote against the transit center, he said, looks like “cutting off your nose to spite your face.”

Besides, he asked, “What if there’s a grant to provide 10 new police officers?”

Michigan’s governor, Rick Snyder, a Republican, said through a spokeswoman that he was “disappointed” in the city’s decision and would be “reviewing our options for utilizing the grant, including the potential transfer of the grant to another applicant.” Mr. Snyder had sent a letter to Mayor Daniels before the vote saying that the project would have “significant, positive economic development on your community and the state.”

The transit fight is not Mayor Daniels’s first brush with controversy. Earlier this month, it was revealed that she posted a message to her Facebook page last June, after New York State approved same-sex marriage, stating, “I think I am going to throw away my I Love New York carrying bag now that queers can get married there.” In an interview, she said she regretted the online comment.

The vote on Monday, she said, is about setting an example concerning the national debt. “I want to leave a legacy for our children of managing our responsibilities — not crushing them with debt money.”

On Tuesday, an official of Magna International, a global automotive supplier based in Canada whose American headquarters are in Troy, expressed frustration with the City Council vote in a private e-mail to Ms. Hodges and others that was posted to a blog that favors the transit center.

“I am drafting a memo to all Magna group presidents and our Magna corporate executives strongly recommending that Magna International no longer consider the City of Troy for future site considerations, expansions or new job creation,” wrote Frank W. Ervin III, the company’s manager of government affairs. “I have also recommended that where ever and when ever possible we reduce our footprint and employment level in Troy” in favor of communities that act in the best interests of residents and business and that do “not simply use their public position to advance their own private agenda.”

Mr. Ervin did not respond to requests for comment, but told The Detroit News on Tuesday that the letter reflected his personal opinion and recommendation for the company, but that he had no control over the company’s decision.

Ed Myles, the president of a local manufacturing company, J.E. Myles Co., said that the area, like the rest of the country, had been hurt by the recession and that it could use the economic boost that the transit center could provide. He said he worried about what companies like Magna would do. The council’s vote “put the kibosh on any other companies moving here.”

“It’s all politics,” he said. “In the meantime, people are suffering.”

Article source: http://feeds.nytimes.com/click.phdo?i=fcc962c18a7a720cd72fac83f5517517

Supreme Court Rules for Drug Firm in a Patent Dispute

WASHINGTON — The Supreme Court on Monday sided with a drug company over Stanford University in a patent dispute concerning a test to measure the amount of H.I.V. in a patient’s blood.

In a second decision, the court ruled that plaintiffs in a securities fraud class action against Halliburton did not have to prove that false statements from the company caused them to lose money in order to band together in a class action.

In the patent case, Stanford v. Roche Molecular Systems, No. 09-1159, the court considered how a 1980 federal law, the Bayh-Dole Act, affected rights to the H.I.V. test. It was invented by Dr. Mark Holodniy, a fellow at Stanford’s department of infectious diseases who had been assigned by the university to conduct research at the Cetus Corporation, a private firm.

Dr. Holodniy had signed a contract saying that “I agree to assign” inventions arising from his employment at Stanford to the university. He later signed a contract saying that “I will assign and do hereby assign” to Cetus inventions arising from his time there.

Roche Molecular Systems bought Cetus’s rights in the H.I.V. test and created a kit that became widely used in hospitals and clinics. Stanford sued for patent infringement; Roche said it was entitled to sell the kits in light of the agreement between Dr. Holodniy and Cetus; and Stanford responded that the doctor had no rights to assign given the Bayh-Dole Act, which specifies how rights in patents are allocated when federal money is involved.

The “general rule,” Chief Justice John G. Roberts Jr. wrote for the majority in a 7-to-2 decision, is that “rights in an invention belong to the inventor,” even if created on an employer’s watch. (Outside the patent context, Chief Justice Roberts said, the basic rule often goes the other way. “No one would claim,” he wrote, “that an autoworker who builds a car while working in a factory owns that car.”)

A lower court ruled that Dr. Holodniy’s agreement with Stanford had been only a promise to assign his rights in the future while the one with Cetus had been an authentic assignment. That interpretation of the two agreements, which was not at issue in the Supreme Court, meant, the chief justice said, that Roche would win unless the Bayh-Dole Act had altered the basic rule that inventors controlled their patent rights.

The act allocates rights between the federal government and federal contractors like Stanford, Chief Justice Roberts wrote. But, he continued, “nowhere in the act are inventors deprived of their interest in federally funded inventions.”

The act, the chief justice wrote, “simply assures contractors that they may keep title to whatever it is they already have.” But, he wrote, “you cannot retain something unless you already have it.”

The decision may not be particularly consequential. With more carefully drafted assignment agreements, Chief Justice Roberts wrote, “the statute as a practical matter works pretty much the way Stanford says it should.”

In a dissent, Justice Stephen G. Breyer said he would have returned the case to the lower courts for further consideration of two questions: the proper interpretation of the interaction of the two assignment agreements and whether the Bayh-Dole Act should be assumed to require assignment of patent rights by employees of government contractors to their employers.

Justice Ruth Bader Ginsburg joined the dissent.

In the securities fraud case, Erica P. John Fund v. Halliburton, No. 09-1403, the court considered what plaintiffs must prove in order to join together in a class action.

The plaintiffs, who bought Halliburton stock from 1999 to 2001, said the company had made false statements designed to inflate its stock price on three topics: its financial exposure to asbestos claims, how much it stood to make from its engineering and construction business, and the expected benefits of a merger with Dresser Industries.

The lower courts ruled that the plaintiffs had met most but not all of the requirements to proceed as a class. The missing element, the federal appeals court in New Orleans said, was that they had failed to prove “loss causation,” that is, “that the corrected truth of the former falsehoods actually caused the stock price to fall and resulted in the losses.”

In a unanimous decision written by Chief Justice Roberts, the court ruled that such proof was not required at the class certification stage.

It was true, Chief Justice Roberts wrote, that finding proof that the investors had relied on the misstatements was part of the class certification basis. But loss causation is a logically different issue, he wrote. It requires proof, he said, that “a misrepresentation that affected the integrity of the market price also caused a subsequent economic loss.”

In presenting its case to the Supreme Court, Halliburton essentially conceded that proof of loss causation was not required at the class certification stage. What the appeals court actually meant in using the phrase, Halliburton contended, was “price impact,” that is, that the false statements affected the stock price in the first place.

“We do not accept Halliburton’s wishful interpretation of the court of appeals’ opinion,” Chief Justice Roberts wrote. “Whatever Halliburton thinks the court of appeals meant to say, what it said was loss causation.”

Article source: http://feeds.nytimes.com/click.phdo?i=749385cbf3d61a4703f0d6c9f889c2fc