(p. A2) You’d think from the debate raging in Washington that taxes are the key to economic growth. They aren’t. In the long run, innovation matters way more, and that depends on inspiration, experimentation and luck, not tax-law changes.
Yet presidents matter for promoting innovation even if it’s less glamorous than taxes. Their support often takes the form of directing money toward basic research or favored industries such as defense or renewable energy.
Under President Donald Trump the place to look is the regulators. Two of his appointees in particular, Food and Drug Administration Commissioner Scott Gottlieb and Federal Communications Commission Chairman Ajit Pai, have prioritized reducing regulatory hurdles to private investment as a way of boosting innovation. It’s too early to gauge their success, but the efforts merit more attention at a time when the growth debate is focused on steep, deficit-financed tax cuts.
. . .
At the FCC, Mr. Pai has targeted the “digital divide,” the gap in broadband access between some communities, especially in rural areas, and others. The share of U.S. households with a fixed broadband connection has stalled at roughly a third in recent years. Mr. Pai thinks the solution is “setting rules that maximize private investment in high-speed networks.”
Controversially, that includes a proposed rollback of his predecessor’s imposition of utility-like regulation so that internet service providers (ISPs) adhere to “net neutrality”—charging all content providers the same to access their networks. Without those limitations, he reckons ISPs will have more incentive to expand capacity and thus access; critics worry this will favor rich, established content providers over innovative newcomers.
. . .
. . . , Mr. Gottlieb’s and Mr. Pai’s theory is that if you lower the hurdles to innovation in specific sectors, you’ll get more of it. It offers a potentially more tangible payoff than fiddling with the tax code.
For the full commentary, see:
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(Note: the online version of the commentary has the date Oct. 25, 2017, and the title “CAPITAL ACCOUNT; Trump’s Regulators Aim to Boost Growth by Lowering Hurdles to Innovation.”)