The Most Important Number for Technology Policy in 2009

by on January 8, 2009 · 19 comments

Is $1,200,000,000,000.00.  That’s the expected 2009 Federal budget deficit.  Since the current Federal debt is estimated at a “mere” $10.6 trillion, this means that we’re expected to add nearly 9% in a single year to a debt accumulated over 233 years (since 1774).  This number also amounts to more than 8% of the U.S. economy. 

So what does this have to do with technology policy?  To start with, this figure comes from Congressional Budget Office estimates, which “don’t account for the huge economic stimulus bill Obama is expected to propose soon to try to jolt the economy.”  So, while the Obama team has talked about big “public works” and “infrastructure” spending (which used to be called, variously, “make-work,” “pork barrel” and “corporate welfare”), there’s sure to be huge pressure not to waste more taxpayer money on top of this staggering figure.  Whatever blame Bush deserves, Obama probably doesn’t want to go down in history as the man who finally caused the U.S. government to default on its unmanageable debt burden.

One certainly could make an argument that the kind of technology-related “infrastructure” stimulus Obama has talked about (e.g., broadband subsidies) would be less of a waste of money than, say, simply building more bridges (as Japan did in the 1990s, its “lost decade”) or other reflexively Keynesian responses.  But even so, I suspect that the total amount of funding made available for such projects won’t be anywhere near enough to satisfy the technology policy Left.  

This could result in increased pressure on the Administration to increase regulation of the technology sector in order to implement tech-leftist ideas about “protecting” users’ privacy, promoting media diversity or “fairness”, mandating net “neutrality,” “opening up” spectrum, etc.  Such  proposals might seem attractive precisely because they generally wouldn’t require increased Federal expenditures other than the cost of hiring more bureaucrats (which means more government employee union jobs anyway—hardly a bad thing for Democrats)—while the economic consequences of such proposals for companies and consumers will probably surely be trivialized.  For example, if the advocates of government control at the so-called “Free Press” can’t get universal broadband, they’ll probably press that much harder to cripple online advertising and traffic management by ISPs, just to name two popular bogeymen.obamas-new-new-deal

One might think that a sharp economic decline would cause policy-makers to think twice before undermining the business models that have supported IT innovation and real infrastructure investment.  But one has only to look at the policies of FDR’s first two terms to see how even an amiable, soft-spoken president elected on a mantra of change and “uniting” the nation in a time of crisis could consistently choose to place “Reform” (i.e., increased regulation) over “Recovery” (i.e., the health of the economy)—with devastating economic consequences.

Even if Obama isn’t a fanatic about the ideals of the technology policy Left, it remains to be seen whether he will be able to resist the ideological agenda of Congressional Democrats on technology policy.  I suppose the first indication we’ll have as to whether the Administration will chart a more reasonable course will be whom he appoints to head the FTC and FCC and as CTO.  Since the first two appointments are to independent agencies, Obama will have to choose someone who appreciates how much damage the “Reform” agenda could do—lest he find, as Bush has with the phony-free-marketeer Kevin Martin, that his Chairmen are fair more radical regulators than he is.  Obama’s appointment of Cass Sunstein as head of the Office of Information and Regulatory Affairs is hardly encouraging, for the reasons Adam has noted.

We may also find that the Administration has better things to do than worry about Internet, communications or media policy—and is therefore all too willing to defer to their appointees (as Bush did with Martin).  If that happens, all Obama’s lofty talk of non-partisanship won’t make any difference if his appointees start taking their marching orders from the hardcore advocates of “Reform.”

  • http://www.americanantigravity.com Tim Ventura

    I like this article: I won't criticize it, but let me add a thoughtful comment…

    One of the Bush Administration's greatest failures was in setting a path forward for the development of 21st-century technology. When you really look at the technology trends under development before the dot-com crash, and then compare that to what actually came out of the Bush Administration, you could make the case that we've actually moved backwards in time technologically rather than making any substantial forward progress. However, at the very least we're treading water.

    My hope is that Obama will set a tone of leadership in technology that encourages the development of alternative fuels, real advances in computing & IT, and *anything* to substantially move the space-industry forward. I think that part of any “New Deal” mantra begins with establishing that something new is required, and selling the world on the vision of a better future.

    Perhaps that's the Bush Administration's greatest failure: instead of telling us that we can make the world a better place, he focused on the message that we can never go home again.

  • http://enigmafoundry.wordpress.com eee_eff

    So what does this have to do with technology policy? To start with, this figure comes from Congressional Budget Office estimates, which “don’t account for the huge economic stimulus bill Obama is expected to propose soon to try to jolt the economy.” So, while the Obama team has talked about big “public works” and ”infrastructure” spending (which used to be called, variously, “make-work,” ”pork barrel” and “corporate welfare”)

    You are conflating several very different items here:

    – corporate welfare, basically the policy of the previous administration, in providing massive subsidies to favored indstries (almost always very large corporations; can it really be an accident that ExoonMobils record profits occurred under Bush's watch?)

    – pork barrel, usually meaning earmarks for special pet projects,

    there’s sure to be huge pressure not to waste more taxpayer money on top of this staggering figure. Whatever blame Bush deserves, Obama probably doesn’t want to go down in history as the man who finally caused the U.S. government to default on its unmanageable debt burden.

    Well, all though you make a sideways passing reference to Bush's malfeasance, you really don't come close to giving the Bush Administration the blame for the present economic mess. They ran the country into the ground, destroyed the USA's image across the owrld, destroyed the economy that Clinton had managed with such care (remember the surplus's he had, there was actually rational hope the the national debt would begin to shrink?

    Now, after 8 years of mismanagement during which the TLF hadn't criticized Bush very much at all, esp. on the deficit spending that Bush advocated, suddenly TLF decides to criticize Obama before he even takes office, blaming him for the deficits that will be required to get the country out of the giant Republican-created mess.

    Well it won't wash. The fault for these deficits lies with GWB administration.

    Hopefully, though, due to the many war crimes commited by the presented administration, we will live to see many of them prosecuted for the crimes they have commited.

    That's just a small comfort though, and it would be a luxury except that it is imperative to demonstrate exactly what will happen to those who espouse those failed neo-liberal policies, lest another administration in the future dare to contemplate similar policies.

    You may doubt now that the Bush administration will be vigourously prosecuted; I doubt though that such a judgment fully accounts for the reality of the pain that the unfolding economic disaster will create, however. Such pain, suffering and dashing of the hopes of millions will demand justice, and justice it will see.

  • http://www.soundasia.com/china/China-Vertu-Phones-124.html vertu phones

    good article

  • mwendy

    The program – which we have not really seen; or if so, through press release only – appears focused on jobs. To keep Americans working. To boost our marginal compensity to consume.

    Any productivity gains, new innovation, or competitive adroitness – these are really after thoughts, and amount to icing on the cake, provided, of course, that we can even mount that baking challenge.

  • http://www.wholesale163.com/cell-phones-pdas/branded-mobile-phone-clone/apple-iphone-clone iphone clone

    Hopefully, though, due to the many war crimes commited by the presented administration, we will live to see many of them prosecuted for the crimes they have commited.

  • http://www.wholesale163.com/cell-phones-pdas/branded-mobile-phone-clone/apple-iphone-clone iphone clone

    Hopefully, though, due to the many war crimes commited by the presented administration, we will live to see many of them prosecuted for the crimes they have commited.

  • http://www.wholesale163.com/cell-phones-pdas/branded-mobile-phone-clone/apple-iphone-clone iphone clone

    Hopefully, though, due to the many war crimes commited by the presented administration, we will live to see many of them prosecuted for the crimes they have commited.

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