WASHINGTON, Nov. 2 (UPI) -- The UPI Think Tank Wrap-Up is a daily digest covering brief opinion pieces, reactions to recent news events, and position statements released by various think tanks.
The Employment Policy Foundation
(EPF is a nonprofit, nonpartisan public policy research and educational foundation focused on workplace trends and policies. EPF seeks to shape U.S. employment policies by producing timely, high quality, unbiased and reliable economic analysis and commentary. EPF believes that sound employment policy requires objective research, strategic analysis and prudent forecasting.)
WASHINGTON--Poised For A Rebound, Terrorist Attacks Disrupted Economy At Critical Turning Point: October unemployment is still low compared to historical standards
The U.S. unemployment rate increased to 5.4 percent in October, showing the full impact of the Sept. 11 terrorist attacks on an economy that may have been ready for a recovery, according to the Employment Policy Foundation. At 7.7 million, the total number of displaced workers is 2.2 million higher than the 5.5 million employees who were out of work in October 2000.
"Today's unemployment report shows the unfortunate results of a serious national tragedy," said EPF President Ed Potter. "Before Sept. 11, economic indicators suggested that the economy was about to turn around. The terrorist attacks have disrupted normal economic activity and shaken consumer confidence. A recession now seems inevitable."
The fall in total employment in both the Bureau of Labor Statistics (BLS) payroll survey, down 415,000 from September, and the BLS household survey, down 619,000 from last month, provide a clear signal of economic contraction. For the first time since the economy began slowing last year, the monthly payroll total is below its level of 12 months earlier.
But among the employment data, there are signs of the economy's resilience, Potter said. At 5.4 percent, October's unemployment rate still remains lower than the average rate for the 1970s (6.3 percent), 1980s (7.1 percent) and the 1990s (5.6 percent). In fact, the unemployment rate was as high as 5.4 percent as recently as December 1996.
In addition, the median duration of unemployment at 7.4 weeks remains low compared to the nine-plus week average that characterized the early 1990s, when the country experienced its last full-blown recession. The proportion of workers who have been displaced for more than 26 weeks remained relatively unchanged at 11.4 percent of unemployed, compared to 11.3 percent in September. And, the total number of long-term unemployed, at 888,000, is less than half of the 2.1 million of long-term unemployed in 1992.
"Despite overall job losses, employment of skilled and educated workers remains high," Potter said. "This trend shows the fundamental shift in our economy to jobs that demand knowledge, skills and analytical capabilities."
Jobs for college graduates age 25 and over increased by 259,000 in October to 36.3 million.
The unemployment rate for college graduates also remained low at 2.7 percent.
The number of workers with college degrees is still the highest its ever been and is the largest education segment of the workforce, Potter said.
The Progress and Freedom Foundation
(The Progress & Freedom Foundation studies the digital revolution and its implications for public policy. P&FF is ideologically diverse and politically non-partisan, and its work focuses heavily on communications, computing and telecommunications.)
WASHINGTON -- Microsoft Settlement "An Embarrassment"
Eisenach, Lenard Call for States, Courts to Intervene
The Justice Department's proposed settlement with Microsoft will do nothing to deter continuing monopolization by the company and should be rejected by both the state attorney generals and the courts, PFF scholars Jeffrey Eisenach and Thomas Lenard said Friday.
PFF President Eisenach said, "Four months ago, the Justice Department heralded as a great victory the remarkable 7-0 appeals court verdict finding the company guilty of virtually all the major counts against it. Now it proposes to enter into a settlement that fails to meaningfully address any of the court's findings. It's an embarrassment for the Justice Department, a disservice to the law and an affront to the D.C. Circuit."
Eisenach noted that the fate of the case now rests in the hands of the state attorneys general, who thus far have refused to join in the settlement, and DC District Court Judge Colleen Kollar-Kotelly, who has the authority to reject the settlement.
"The states should not accept this deal," Eisenach said, "and the judge should reject it, with prejudice."
"What this immediately means," said PFF Vice President for Research Thomas Lenard, "is that Microsoft will be able to pursue its Windows XP strategy unimpeded, and that means a dramatic escalation of the company's strategy of leveraging its desktop and browser monopolies into new areas of computing."
Lenard noted that XP represents a "closed environment" designed to keep PC users from utilizing competing software and on-line services. "Unless you happen to be among the few venturesome types who insist on finding a different way, you'll be paying Microsoft, one way or another, for every digital step you take. It will truly be a Microsoft world, even more so than it is today."
Eisenach and Lenard have led the Foundation's extensive research on antitrust issues in hi-tech industries, focusing especially on the Microsoft case. Both are Ph.D. economists with broad experience in and out of government.
The Progress & Freedom Foundation has issued a number of studies on the Microsoft case, applying a traditional economic approach to antitrust to evaluate the issues in the case and size up potential remedies.
Competitive Enterprise Institute
(CEI is a free-market think tank that supports principles of free enterprise and limited government, and actively engages in public policy debate.)
WASHIGNTON -- Im-perfect Harmony: Settling the Microsoft Case
By James V. DeLong
"The hills are alive with the sound of settlement, and it is music to the ears of the tech community, Microsoft, and the federal government. The states and Microsoft rivals seem to find it a bit discordant, though.
"The provisions are complex. The gist is that Microsoft must:
"--Refrain from penalizing computer makers (OEMs) that distribute non-Microsoft operating systems or "middleware" (programs that can serve as a link between an operating system and applications, defined to include at least browsers, email programs, media players, and instant messaging software).
"--Charge OEMs published rates and offer uniform discounts.
"--Share the Applications Program Interface code for its own middleware so as to ease the task of those who want to write competing software.
"--Make available future communications protocols that link desktop PCs and larger servers, a provision designed to help Microsoft's competitors in the server market.
"--Pay for an independent three-person compliance-review panel.
"--Comply with the agreement for five years, with a two-year extension if Microsoft violates it.
"The settlement makes sense. The government got all it was entitled to under the D.C. Circuit decision and a good deal more. But it is not a big loss for Microsoft, which retains freedom to integrate new applications into Windows, as long as the door also stays open for others. Also, Microsoft says that it loves outside developers and that openness is its policy; it wants Windows to be a platform that welcomes numerous applications written by all comers (for example, XP supports other media players as well as Microsoft's) so a promise of even-handed dealing is easy.
"Revealing source code should not be a big problem for Microsoft, which has already undertaken a 'shared source' initiative to counter the Open Source Software challenge mounted by competitors. In fact, the company can make this provision into lemonade.
"As game theory teaches, the ability to make credible promises is a valuable asset. Rumors of secret Applications Program Interfaces known only to Microsoft applications programmers will not die, despite Microsoft denials. Now, the vow of equal treatment will be backed by government and monitored by the independent panel. This will encourage investment by independents, to the benefit of themselves, Microsoft and the public.
"Rival companies, so-called 'consumer groups,' and state attorneys general have attacked the settlement. They will get their chance to vent because the Tunney Act requires the judge to collect comments on whether the consent order is in the public interest. The states, as parties to the litigation, could even continue the case on their own.
"They are unlikely to do more than vent, though. The realities are that the Court of Appeals left only shreds of the government's case intact, and any remedies that could be obtained after more years of combat would be inferior to the deal being offered now. So the states might complain and slander the feds, but they will not spend any significant money or do any serious legal work or accept any actual responsibility.
"So, finally, this ill-starred case will be over, except, of course, for dozens of private suits being pursued of, by, and for the trial lawyers.
"But two fundamental problems will remain. The first is that antitrust law remains a mélange of incoherent and inconsistent doctrine, driven by political considerations more than legal, and waiting to ambush the next new economy target.
"Second, the settlement reinforces the government's 'Open Access' mentality, under which risks are privatized and gains socialized, to the detriment of the nation's entrepreneurial spirit.
(James V. DeLong is a senior fellow in the Project on Technology and Innovation at the Competitive Enterprise Institute.)
The Cato Institute
WASHINGTON -- Cato Scholar: Microsoft Settlement Means Relief For Consumers
The Department of Justice reached a possible settlement with Microsoft Corp. on Friday that would put an end to over three years of antitrust litigation. Cato Institute Senior Fellow in Constitutional Studies and Microsoft expert Robert A. Levy had the following comments:
"Prospects look good for settlement of the biggest antitrust case in decades. That means Microsoft's billionaire rivals will have failed in their attempt to use government to win in the political arena what they couldn't win in the marketplace.
"It also means that consumers won't have to pick up the tab while high-tech executives devote more resources to politicking than to the development of integrated products.
"To settle the case, Microsoft will have to make more concessions than justified by this baseless lawsuit and the company still faces litigation from competitors, opportunistic trial lawyers, the European Union, and perhaps even state attorneys general who don't agree to the settlement. That's regrettable, but at least the federal antitrust lawsuit won't be around to sap economic growth so essential to the post-WTC recovery."
The Cato Institute
WASHINGTON--Unemployment Insurance System Defective, Analyst Says
New labor department figures released today show that the United States shed 415,000 jobs in October, the most in two decades. Edward L. Hudgins, Cato Institute director of regulatory studies, had the following comment about unemployment insurance:
"The jump in the jobless rate from 4.9 percent to 5.4 percent over the past month has policy makers asking whether unemployment benefits, which provide about one-half of a worker's income for about 26 weeks, are adequate. Many think suggest that states, which run the programs under a federal mandate, loosen their standards so that more people can collect benefits, that benefits be extended beyond their normal duration, or that the federal government throw more money at the problem. As the jobless are grows, so will such calls.
"Unfortunately for out-of-work Americans, benefits often are inadequate thanks to those same policy makers that now are bemoaning the fact. All workers and enterprises must pay unemployment taxes but less than half of unemployed workers during any given month qualify to collect benefits. Many are ineligible because they earned too little money. Workers who are discharged from jobs 'for cause' also are ineligible. Thus many workers pay into the system but are not allowed to collect.
"When the economy was growing and unemployment was low policy makers were not interested in dealing with the clear defects of the system. Now that unemployment is rising they want to deal with the problem at hand while still ignoring the structural defects of the system, thus paving the way for future crisis.
"This would be a good time to for policy makers to consider allowing an alternative to the current system. Workers could be allowed to open tax-exempt employment accounts to which they and/or their employers might contribute. These accounts would be their private property. Thus every worker would have access to the money they contribute to their accounts. Further, the accounts would give them more flexibility than the current system. For example, a worker might use money from the account for retraining for a better job."
