Gingrich advises state lawmakers not to kill innovation
At last week’s annual meeting of the American Legislative Exchange Council, a national organization whose members are (mostly) conservative lawmakers and nongovernment public policy specialists, attendees from around the country were treated to a breakfast and a workshop at which Gingrich sketched out a theme that addresses many of the hottest issues in the nation. “Breakout,” his 2013 book detailing “the epic political battle of our age,” describes a critical contest between the “pioneers of the future” and the “prison guards of the past.”
Gingrich, John Stossel and many others have cautioned that unlike when, with little resistance, mankind was allowed major leaps forward due to the invention of alternating current, light bulbs, steamships, internal combustion engines, refrigeration, antibiotics and computers, we face delays or might actually lose the chance to take advantage of today’s advances in medicine, transportation, education and energy production. The ever-more powerful and omnipresent government at nearly every level is gaited to preserve privileges and to fit everybody with one size, rather than to facilitate the future. This process goes by a lot of different names – “fairness,” “leveling the playing field,” and “protecting the public.”
Under this line of thinking, the public is protected by laws that favor government-run schools; keep experimental but promising drugs out of reach for Americans who are dying of diseases but willing to try anything; and that prohibit innovative services by everyday folks in the fast-growing “shared economy.” “If it moves, tax it,” was Ronald Reagan’s explanation of the government’s view of the economy. “If it keeps moving, regulate it. And if it stops moving, subsidize it.”
Of course there is a new wrinkle since Reagan, and that is to subsidize something to get it moving, at least long enough to let the politically connected insiders sell out at a nice profit.
Just to pick one example of the challenge faced by innovators today, marvel at the updated status of the college rideshare board. Worldwide, dramatically expanded networks of late-model cars and carefully selected drivers at Lyft, Über and Sidecar have been essentially banned in whole states, and are being arrested and fined this week in Madison, Wisc. The taxicab industry has organized to eliminate this competition in many of the nation’s cities. A taxi medallion in nearby Chicago is currently valued at about $350,000. The value has doubled since 2009. According to the Washington Post, where medallions exist, they have outperformed even the S&P 500-stock index, and there are roughly 6,900 of them in Chicago. In New York, where most vehicles on view at any particular time on the avenues are taxis, the medallions have sold for more than $1 million.
In Dallas last week, the hotel doorman told me that the taxi flat rate to the airport was $50. Summoning ride-sharing on my smart phone got me a ride in about two minutes and the surge (higher when demand spikes) pricing I agreed to pay still saved me $20. This is really disruptive technology, and citizen demand has prompted at least one state, Colorado, to regulate, rather than ban it. While arresting network company drivers in the meantime, Madison is working on an ordinance. Houston and my hometown, Columbus, Ohio, enacted ordinances in the last two weeks, and numerous other cities — including Minneapolis, Milwaukee, Oklahoma City and St Louis — are trying to “level the playing field” by regulating insurance coverage, street hailing, vehicle safety and a multitude of other issues.
Does it make sense that a government obsessed with alternative energy would try to crush alternative transportation? If you lived on Long Island in New York and were reading that Long Island Railroad workers were considering a strike to secure a 17 percent benefits increase, would you be interested in another way to get to work? LyftLine and UberPool, the carpool versions of the popular peer-to-peer services, are being tested now. Sidecar announced this week that it has already serviced 13,000 customers with discounted shared rides.
I happen to think that a huge benefit of network transportation services is in the rural areas of the state and smaller towns where there are no taxicabs. There, many people are seriously challenged, particularly on weekends, in getting to hospitals and doctor appointments, work or any number of places they would drive if they had serviceable transportation of their own.
Many people my age remember the classic case of the firemen who were kept on the railroad even when there were nothing but electric and diesel trains to ride. People with commercial experience know that sometimes a business must pay for 365-day-a-year air conditioning under lease agreements, even though it is only available from May or June until September or October.
Even worse, it is possible that the breakthroughs on customized medicine particular to the DNA and biochemistry of individual patients will be foreclosed to Americans because no company can afford to do whatever tests the U.S. Food and Drug Administration directs based on protocols that apply to medicines for entire populations. The threat of taxing access to the Internet seems to always be “on the table.”
In the end, the public should demand policy that works for customers, as well as licensed providers. Alas, entrenched interests, with all of the manipulative tools, legal causes of action and government authority that now exists, may stifle many of the innovations that could transform the economy before most people get a chance to try them out.