[Co-authored with Connor Haaland and originally published on The Bridge as, “Do Our Leaders Believe in Free Speech and Online Freedom Anymore?”]

A major policy battle has developed regarding the wisdom of regulating social media platforms in the United States, with the internet’s most important law potentially in the crosshairs. Leaders in both major parties are calling for sweeping regulation.

Specifically, President Trump and his presumptive opponent in the coming presidential election, former Vice President Joe Biden, have both called for “Section 230” of the Communications Decency Act to be repealed. Last week, the president took a misguided step in this direction by signing an executive order that, if fully carried out, will result in significantly greater regulation of the internet and of speech.

A Growing Call to Regulate Internet Platforms

The ramifications of these threats and steps could not be more profound. Without Section 230—also known as “the 26 words that created the internet”—we would have a much less advanced internet ecosystem. Twitter, Facebook, YouTube, and Wikipedia would have never grown as quickly. Indeed, the repeal of Section 230 means many fewer jobs, less information distribution, and, frankly, less joy.

Shockingly, by backing Trump’s recent push for regulating these internet platforms, many conservatives are betraying their own principles—the ones that support freedom of expression and the ability to run private businesses without government interference.

Section 230 limits the liability online intermediaries face for the content and communications that travel over their networks. The immunities granted by Section 230 let online speech and commerce flow freely, without the constant threat of legal action or onerous liability looming overhead for digital platforms. To put it another way, without this provision, today’s vibrant internet ecosystem likely would not exist.

For completely different reasons, however, Biden and Trump want it axed. “Section 230 should be revoked, immediately should be revoked, number one. For [Facebook CEO Mark] Zuckerberg and other platforms,” said Biden in a New York Times interview. Like many other Democrats, Biden wants social media platforms to do far more to block speech they find to be offensive in various ways. If they fail to do more, Biden and other Democrats want Sec. 230 revised or repealed.

In contrast, Trump and his allies want these same platforms to do far less to curate content. Although lacking any empirical evidence, they allege that massive anti-conservative bias exists across today’s most popular platforms. As a result, they want Sec. 230 gutted. “Repeal 230,” said Trump in a tweet. Tensions reached a boiling point last week following a public fight between the president and Twitter after the social networking platform on May 27 added a fact-check notice to one of the president’s tweets about the supposed dangers of mail-in voting.

Retaliating Against Social Media

On May 28, Trump struck back against Twitter by signing an executive order on “preventing online censorship.” The EO cited Twitter six times but also went after Facebook, Instagram, and YouTube by name. Paradoxically, it also noted that the “freedom to express and debate ideas is the foundation for all of our rights as a free people,” even though the order will result in arbitrary government rule over our free speech rights.

Indeed, Trump’s executive order runs afoul of traditional conservative principles in several ways:

1. It expands the power of the government by delegating more authority to the administrative state and expanding arbitrary bureaucratic rule and regulatory abuse. It encourages the Federal Communications Commission (FCC) and the Federal Trade Commission to take a more active interest in content policy decisions, which is of dubious legality. Section 3 of the EO also says the Department of Justice “shall review the viewpoint-based speech restrictions imposed by each online platform identified in the report … and assess whether any online platforms are problematic vehicles for government speech due to viewpoint discrimination, deception to consumers, or other bad practices.” (emphasis added)

   What do other bad practices entail, and who in the government gets to make the call? It is not prudent to delegate authority over something as sacred as our rights to free speech to unelected government bureaucrats. Such power will stifle civil discourse and increase the possibility for special interests to co-opt the government by using its power for their own desires.

2. It undermines property rights of private companies by letting Big Government dictate how they use their business platforms. Carrying out the president’s executive order would amount to a taking of private property by the government, an action that conservatives have historically loathed. Our Founding Fathers considered property rights to be the cornerstone of a free and just society, yet Trump pays that fact little respect in this EO, running afoul of a centuries-old American tradition.

3. It will encourage frivolous lawsuits. By gutting Sec. 230, a law that protects online platforms from punishing liability for third-party speech, Trump’s EO would empower trial lawyers. We are already too litigious a country, filing over 80 million cases in state courts every year, and we do not need another reason to be in the courtroom. Repealing 230 would open the floodgates to endless lawsuits about online speech and clog up our judicial system, using resources that could be directed to more important matters.

4. It undermines free speech and would likely hurt conservative voices most. Trump’s executive order makes a mockery of the First Amendment by applying the Fairness Doctrine and net neutrality notions to social media, regulations that conservatives have vociferously opposed. A recent lawsuit filed by the Center for Democracy and Technology that seeks to challenge the EO alleges this exact point, saying it could chill free speech. In the past we have seen such concepts applied arbitrarily, harming free speech and media competition.

   For instance, our colleague Brent Skorup, has written on how the FCC exploited another arbitrary rule—the “public interest” standard. He points to the fact that a documentary portraying former Sen. John Kerry in a negative light was taken off the air thanks to the authority of the public interest standard as a paradigmatic example of how arbitrary regulatory power can harm free speech. The EO also undermines platforms that have greatly amplified conservative voices in recent years. On Facebook, for instance, 7 of the top 10 most cited news outlets were conservative. Meanwhile, Trump and other conservative leaders have tapped the power of Twitter to directly communicate with their base. The EO would therefore likely result in much conservative content being removed quickly to avoid legal hassles with regulators or the courts.

5. The combined effect of all these other factors will undermine the global competitiveness of US-based firms, potentially benefiting Chinese internet companies the most. Willingly giving up a comparative advantage would be foolish, considering how America’s tech companies are the envy of the world. Not only does the EO affect existing social platforms, but it could stifle innovation throughout the digital economy moving forward. Who wants to try and innovate in a field that is subject to regulations that can change on a president’s whim?

6. It could be used by future politicians against conservative platforms, like Fox News and other right-leaning outlets. This is clearly not the intent of Trump’s executive order, but that will eventually be the result nonetheless. Going forward, we will have different presidents with different political outlooks. When making laws, regulations, and executive orders, it is always important to consider how they could be applied by successive administrations with opposite political and ideological stripes.

Today’s social media platforms are not perfect, but it is impossible for them to please everyone. There is no Goldilocks formula whereby they can get speech policies just right and make everyone happy. Instead, the ideal policy for speech platforms is: Let a thousand flowers bloom. One-size-fits-all content management and community standards shouldn’t be the goal. We need diverse platforms and approaches for a diverse citizenry.

But when presidential candidates and their allies line up in support of repealing Sec. 230 and opening the door to speech controls, the end result will be homogenized conformity with the will of those in power. That’s a horrible result for a nation that values diversity of opinion and freedom of speech, and it will only end up hurting those who seek to change the conversation.

Also see: Brent Skorup, “The Section 230 Executive Order, Free Speech, and the FCC,” Technology Liberation Front, June 3, 2010.

The White House has announced a new effort to help prepare workers for the challenges they will face in the future. While it’s a well-intentioned effort, and one that I hope succeeds, I’m skeptical about it for a simple reason: It’s just really hard to plan for the workforce needs of the future and train people for jobs that we cannot possibly envision today.

Writing in the Wall Street Journal today, Ivanka Trump, senior adviser to the president, outlines the elements of new Executive Order that President Trump is issuing “to prioritize and expand workforce development so that we can create and fill American jobs with American workers.” Toward that end, the Administration plans on:

• establishing a National Council for the American Worker, “composed of senior administration officials, who will develop a national strategy for training and retraining workers for high-demand industries.” This is meant to bring more efficiency and effectiveness to the “more than 40 workforce-training programs in more than a dozen agencies, and too many have produced meager results.”
• “facilitat[ing] the use of data to connect American businesses, workers and educational institutions.” This is meant to help workers find “what jobs are available, where they are, what skills are required to fill them, and where the best training is available.”
• launching a nationwide campaign “to highlight the growing vocational crisis and promote careers in the skilled trades, technology and manufacturing.”

It’s also worth noting how difficult it is to predict future labor market trends. In early 2015, Glassdoor, an online jobs and recruiting site, published a report on the 25 highest paying jobs in demand today. Many of the job titles identified in the report probably weren’t considered a top priority 40 years ago, and some of these job descriptions wouldn’t even have made sense to an observer from the past. For example, some those hotly demanded jobs on Glassdoor’s list include[1] software architect (#3), software development manager (#4), solutions architect (#6), analytics manager (#8), IT manager (#9), data scientist (#15), security engineer (#16), quality assurance manager (#17), computer hardware engineer (#18), database administrator (#20), UX designer (#21), and software engineer (#23). Looking back at reports from the 1970s and ’80s published by the US Bureau of Labor Statistics, the federal agency that monitors labor market trends, one finds no mention of these computing and information technology–related professions because they had not yet been created or even envisioned.[2] So, what will the most important and well-paying jobs be 30 to 40 years from now? If history is any guide, we probably can’t even imagine many of them right now. Of course, as with previous periods of turbulent technological change, many of today’s jobs and business models will be rendered obsolete, and workers and businesses will need to adjust to new marketplace realities. That transition takes time, but as James Bessen points out in his book Learning by Doing, for technological revolutions to take hold and have a meaningful impact on economic growth and worker conditions, large numbers of ordinary workers must acquire new knowledge and skills. But “that is a slow and difficult process, and history suggests that it often requires social changes supported by accommodating institutions and culture.”[3] Luckily, however, history also suggests that, time and time again, society has adjusted to technological change and the standard of living for workers and average citizens alike improve at the same time.

Bessen’s point is really important, and too often forgotten in discussions about reskilling for the future. When I think about the sort of skills that I picked up the early 1980 as a teenager using a clunky old Commodore 128 computer, or that my own teenage kids pick up today just by tinkering with their gadgets (computers, smartphones, gaming consoles, etc), I think about how those skills were not centrally planned for by anyone. It was mostly just learning by doing. A lot of the coding skills people use today they learned by trial and error and without taking any course to do so.

In his book, Bessen uses the example of bank tellers to illustrate how convention wisdom about future trends is often wildly off the mark. With the rise of ATMs a few decades ago, many thought the days of bank tellers were numbered. But Bessen’s research shows that we have more bank tellers today than we did 40 years ago because once the ATMs could handle the menial tasks of counting and distributing money, the tellers were freed up to do other things.

I’m not saying we can just leave the future of workers to chance and hope everyone can learn on the fly like that. Some government programs will be needed, and many could even help. But let’s not kid ourselves into thinking that we somehow have a crystal ball that we can stare into and, like a technological Nostradamus, somehow divine the jobs and skills of a radically uncertain future.

Our better hope lies in creating an innovation culture that is open to new types of ideas, jobs, and entrepreneurialism. We might better serve the workers of the future by ensuring that they are not encumbered by mountains of accumulated red tape in the form of archaic rules, licenses, permitting schemes, and other obstacles to progress. My colleague Michael Farren also testified last year and offered some concrete near-term reform proposals to help bridge the skills gap by “revis[ing] the federal tax code to allow tax deductions for all forms of productivity-enhancing investments, including investment in training workers to perform new jobs,” and also addressing government aid programs “that might be lowering the supply of workers, thereby contributing to the lack of skilled workers available.”

This week, my Mercatus Center colleague Andrea Castillo and I filed comments with the White House Office of Science and Technology Policy (OSTP) in a proceeding entitled, “Preparing for the Future of Artificial Intelligence.” For more background on this proceeding and the accompanying workshops that OSTP has hosted on this issue, see this White House site.

In our comments, Andrea and I make the case for prudence, patience, and a continuing embrace of “permissionless innovation” as the appropriate policy framework for artificial intelligence (AI) technologies at this nascent stage of their development. Down below, I have pasted our full comments, which were limited to just 2,000 words as required by the OSTP. But we plan on releasing a much longer report on these issues in coming months. You can find the full version of filing that includes footnotes here.

The Office of Science and Technology Policy (OSTP) has requested comments pertaining to the governance of artificial intelligence (AI) technologies.

The Technology Policy Program of the Mercatus Center at George Mason University is dedicated to advancing knowledge of the impact of regulation on society. It conducts careful and independent analyses employing contemporary economic scholarship to assess policy issues from the perspective of the public interest.

We write here to comment on the appropriate policy framework for artificial intelligence (AI) technologies at this nascent stage of their development and to make the case for prudence, patience, and a continuing embrace of “permissionless innovation.” Permissionless innovation refers to the idea that “experimentation with new technologies and business models should generally be permitted by default. Unless a compelling case can be made that a new invention will bring serious harm to society, innovation should be allowed to continue unabated and problems, if they develop at all, can be addressed later.”

Policymakers may be tempted to preemptively restrict AI technologies out of an abundance of caution for the perceived risks these new innovations might seem to pose. However, an examination of the history of US technology policy demonstrates that these concerns can be adequately addressed without quashing a potentially revolutionary new industry.

Specifically, as policymakers consider the governance of AI, they would be wise to consider the lessons that can be drawn from our recent experience with the Internet. The United States made permissionless innovation the basis of Internet policy beginning in the early 1990s, and it soon became the “secret sauce” that propelled the rise of the modern digital revolution.

If policymakers wish to replicate America’s success with the Internet, they need to adopt a similar “light-touch” approach for the governance of AI technologies. To highlight the benefits of permissionless innovation, the Mercatus Center at George Mason University has recently published a book, a series of law review articles, and several agency filings that explain what this policy vision entails for different technologies and sectors. A summary of the major insights from these studies can be found in a recent Mercatus Center paper called “Permissionless Innovation and Public Policy: A 10-Point Blueprint.”

If one’s sole conception of a technology comes from Hollywood depictions of dystopian science fiction or killer robotic systems run amok, it is understandable that one might want to use the force of regulation to clamp down decisively on these “threats.” But these fictional representations are just that: fictional. AI technologies are both much more benign and fantastic in reality.

The economic benefits of AI are projected to be enormous. One recent study used benchmarks derived from methodologically conservative studies of broadband Internet, mobile phones, and industrial robotics to estimate that the economic impact of AI could be between $1.49 trillion and $2.95 trillion over the next ten years. With less strict assumptions, the economic benefits could be greater still.

However, some skeptics are already making the case for a preemptive regulation of AI technologies. The rationales for control are varied, including concerns ranging from deindustrialization to dehumanization, as well as worries about the “fairness” of the algorithms behind AI systems.

Due to these anxieties associated with AI, some academics argue that policymakers should “legislate early and often” to “get ahead of” these hypothetical problems. Specifics are often in short supply, with some critics simply hinting that “something must be done” to address amorphous concerns.

Other scholars have provided more concrete regulatory blueprints, however. They propose, among other things, the passage of broad-based legislation such as an “Artificial Intelligence Development Act,” as well as the creation of a federal AI agency or possibly a “Federal Robotics Commission” or “National Algorithmic Technology Safety Administration.” These proposed laws and agencies would establish a certification process requiring innovators to subject their technologies to regulatory review to “ensure the safety and security of their A.I.” Or, at a minimum, such agencies would advise other federal, state, and local officials and organizations on how to craft policy for AI and robotics.

Such proposals are based on “precautionary principle” reasoning. The precautionary principle refers to the belief that new innovations should be curtailed or disallowed until their developers can prove that they will not cause any harms to individuals, groups, specific entities, cultural norms, or various existing laws, norms, or traditions.

It is certainly true that AI technologies might give rise to some of the problems that critics suggest. And we should continue to look for constructive solutions to the potentially thorny problems that some of these critics discuss. That does not mean that top-down, technocratic regulation is sensible, however.

Traditional administrative regulatory systems have a tendency to be overly rigid, bureaucratic, and slow to adapt to new realities. This is particularly problematic as it pertains to the governance of new, fast-moving technologies.

Prior restraints on innovative activities are a recipe for stagnation. By focusing on preemptive remedies that aim to predict hypothetical problems that may not ever come about, regulators run the risk of making bad bets based on overconfidence in their ability to predict the future. Worse yet, by preempting beneficial experiments that yield new and better ways of doing things, administrative regulation stifles the sort of creative, organic, bottom-up solutions that will be needed to solve problems that may be unforeseeable today.

This risk is perhaps more pronounced when dealing with AI technologies. How “artificial intelligence” is regulated makes little sense until policymakers define what it actually entails. The boundaries of AI are amorphous and ever changing. AI technologies are already all around us—examples include voice-recognition software, automated fraud detection systems, and medical diagnostic technologies—and new systems are constantly emerging and evolving rapidly. Policymakers should keep in mind the rich and distinct variety of opportunities presented by AI technologies, lest regulations more appropriate for one kind of application inadvertently stymie the development of another.

Toward that end, we suggest that a different policy approach for AI is needed, one that is rooted in humility and a recognition that we possess limited knowledge about the future.

This does not mean there is no role for government as it pertains to AI technologies. But it does mean that policymakers should first seek out less restrictive remedies to complex social and economic problems before resorting to top-down proposals that are preemptive and proscriptive.

Policymakers must carefully ensure they have a full understanding of the boundaries and promises of all of the technologies they address. Many AI technologies pose little or no risks to safety, fair market competition, or consumer welfare. These applications should not be stymied due to an inappropriate regulatory scheme that seeks to address an entirely separate technology. They should be distinguished and exempted from regulations as appropriate.

Other AI technologies may warrant more regulatory consideration if they generate substantial risks to public welfare. Still, regulators should proceed cautiously.

To the extent that policymakers wish to spur the development of a wide array of new life-enriching technologies, while also looking to devise sensible solutions to complex challenges, policymakers should consider a more flexible, bottom-up, permissionless innovation approach as the basis of America’s policy regime for AI technologies.

Yesterday, the White House Council of Economic Advisers released an important new report entitled, “Occupational Licensing: A Framework for Policymakers.” (PDF, 76 pgs.) The report highlighted the costs that outdated or unneeded licensing regulations can have on diverse portions of the citizenry. Specifically, the report concluded that:

the current licensing regime in the United States also creates substantial costs, and often the requirements for obtaining a license are not in sync with the skills needed for the job. There is evidence that licensing requirements raise the price of goods and services, restrict employment opportunities,  and make it more difficult for workers to take their skills across State lines. Too often, policymakers do not carefully weigh these costs and benefits when making decisions about whether or how to regulate a profession through licensing.

The report supported these conclusions with a wealth of evidence. In that regard, I was pleased to see that research from Mercatus Center-affiliated scholars was cited in the White House report (specifically on pg. 34). Mercatus Center scholars have repeatedly documented the costs of occupational licensing and offered suggestions for how to reform or eliminate unnecessary licensing practices. Most recently, my colleagues and I have explored the costs of licensing restrictions for new sharing economy platforms and innovators. The White House report cited, for example, the recently-released Mercatus paper on “How the Internet, the Sharing Economy, and Reputational Feedback Mechanisms Solve the ‘Lemons Problem,’” which I co-authored with Christopher Koopman, Anne Hobson, and Chris Kuiper. And it also cited a new essay by Tyler Cowen and Alex Tabarrok on “The End of Asymmetric Information.”

Moreover, along with Christopher Koopman and Matt Mitchell, I recently submitted comments to the Federal Trade Commission for a sharing economy workshop. In those comments, as well as a recent paper on the same subject, we documented how occupational licensing rules were often “captured” by affected interests and are then used to discourage new forms of competition and innovation. This harms both consumers and workers by depriving them of new and better options. Many sharing economy operations are having great success in breaking down these barriers and proving that consumers and workers do better in an environment free of unnecessary and costly licensing restrictions. This suggests that consumer welfare would be improved even more by reforming other licensing regimes.

Mercatus has published dozens of other things related to this issue, many of which I have listed down below. Just recently, in fact, we published a new paper on “Breaking Down the Barriers: Three Ways State and Local Governments Can Improve the Lives of the Poor,” by economist Steven Horwitz. The report begins by documenting how “occupational licensure laws disproportionately burden the poor by requiring them to spend significant resources just to enter a market.” This is consistent with the findings from other Mercatus reports and other academic publications.

Anyway, check out the new White House report and, if you are serious about studying the issue of occupational licensing in more detail, you’ll want to take a closer look at some of these other Mercatus Center publications on the issue. The case for occupational licensing reform is strong and non-partisan, as the release of this White House report makes clear.

Mercatus Center publications and related material on occupational licensing & barriers to entry 

• Working Papers, Filings & Testimony
  • Mercatus research paper, “Breaking Down the Barriers: Three Ways State and Local Governments Can Get Out of the Way and Improve the Lives of the Poor” by Steve Horowitz (July 21 2015).
  • Testimony before the South Carolina Health Planning Committee department of Health and Environmental Control, “Certificate-of-Need laws: Implications for South Carolina” by Christopher Koopman, Thomas Stratmann, and Mohamad Elbarasse (June 12, 2015).
  • Mercatus on Policy, “Certificate-of-Need Laws: Implications for Arkansas” by Christopher Koopman, Thomas Stratmann, and Mohamad Elbarasse (June 9, 2015).
  • Mercatus on Policy, “Certificate-Of Need Laws: Implications for West Virginia” by Christopher Koopman and Thomas Stratmann (June 2, 2015).
  • Mercatus working paper, “How the Internet, the Sharing Economy, and Reputational Feedback Mechanisms Solve the “ Lemons Problem” by Adam Thierer, Christopher Koopman, Anne Hobson, and Chris Kuiper (May 26, 2015).
  • Mercatus FTC filing, “The Sharing Economy: Issues Facing Platforms, Participants, and Regulators” by Christopher Koopman, Matthew Mitchell, and Adam Thierer (May 26, 2015).
  • Mercatus on Policy, “Certificate-Of Need Laws: Implications for Kentucky” by Christopher Koopman, Thomas Stratmann and Mohamad Elbarasse (May 26, 2015).
  • Mercatus on Policy, “Certificate-Of Need Laws: Implications for Michigan” by Christopher Koopman, Thomas Stratmann and Mohamad Elbarasse (May 19, 2015).
  • Mercatus publication, “How state CON Laws restrict Access to Health Care” by Christopher Koopman Thomas Stratmann, and Mohamad Elbarasse (May 13, 2015).
  • Mercatus on Policy, “Certificate-Of Need Laws: Implications for Missouri” by Christopher Koopman, Thomas Stratmann and Mohamad Elbarasse (May 11, 2015).
  • Mercatus on Policy, “Certificate-Of Need Laws: Implications for Georgia” by Christopher Mercatus on Policy, “Certificate-Of Need Laws: Implications for South Carolina” by Christopher Koopman and Thomas Stratmann (May 5, 2015).
  • Testimony before the Indiana Senate Commerce and Technology Committee, “Occupational Licensing Gone Wild? Why Licensing is Not Always the Answer” by Edward Timmons (April 16, 2015).
  • Koopman, Thomas Stratmann and Mohamad Elbarasse (March 31, 2015).
  • Mercatus on Policy, “Certificate-Of Need Laws: Implications for Tennessee” by Christopher Koopman and Thomas Stratmann (March 24, 2015).
  • Mercatus on Policy, “Certificate-of-Need Laws: Implications for Florida” by Christopher Koopman and Thomas Stratmann (March 3, 2015).
  • Mercatus policy recommendations, “Florida Fiscal Policy: Responsible Budgeting in a Growing State” by Randall Holcombe (February 26, 2015).
  • Mercatus on Policy, “Certificate-Of Need Laws: Implications for Virginia” by Christopher Koopman and Thomas Stratmann (February 24, 2015).
  • Mercatus working paper, “Bringing the Effects of Occupational Licensing into Focus: Optician Licensing in the United States” by Edward Timmons and Anna Mills (February 17 2015).
  • Mercatus on Policy, “Certificate-Of Need Laws: Implications for North Carolina” by Christopher Koopman and Thomas Stratmann (February 12, 2015).
  • Mercatus on Policy, “Certificate-Of Need Laws: Implications for New Hampshire” by Christopher Koopman and Thomas Stratmann (February 4, 2015).
  • Testimony before the New Hampshire House Health, Human Services and Elderly Affairs Committee, “Certificate-of-Need laws: Implications for New Hampshire” by Christopher Koopman and Thomas Stratmann (January 28, 2015).
  • Mercatus publication, “The Sharing Economy and Consumer Protection Regulation: The Case for Policy Change” by Christopher Koopman, Matthew Mitchell, and Adam Thierer (December 8, 2014).
  • Mercatus interactive publication, “40 Years of Certificate-of-Need Laws across America,” by Matthew Mitchell and Christopher Koopman (October 14, 2014).
  • Mercatus working paper, “Do Certificate-of Need Laws Increase Indigent Care?” by Thomas Stratmann and Jake Russ (July 15, 2014).
  • Mercatus working paper, “Regulatory Reform in Florida: An Opportunity for Greater Competitiveness and Economic Efficiency” by Patrick McLaughlin, Jerry Ellig, and Dima Yazji Shamoun (March 18, 2014).
  • Mercatus on policy, “A Tale of Two Labor Markets: Government Spending’s Impact on Virginia” by Keith Hall and Robert Greene, (September 20, 2013).
  • Mercatus publication, “The Pathology of Privilege: The Economic Consequences of Government Favoritism” by Matthew Mitchell, (July 8, 2012).
  • “Beyond Bailouts: What is Cronyism?” by Matthew Mitchell, (July 8, 2012).
• Journal Articles
  • Published in Econ Journal Watch, “Was Occupational Licensing Good for Minorities? A Critique of Marc Law and Mindy Marks” by Daniel B. Klein, Benjamin Powell, and Evgeny S. Vorotnikov (September 2012).
  • Published in Cato Journal, “Occupational Licensing and Asymmetric Information” by David Skarbek (Jan 2007).
• Charts and Videos
  • “The Wrath of CON | How Certificate-Of-Need Laws Affect Access to Health Care” by Matthew Mitchell (May 12, 2015).
  • “Occupational Licensing: Bad for Competition, Bad for Low-Income Workers” by Veronique de Rugy (March 25, 2014).
• Media
  • Christopher Koopman discusses certificate of need laws on The Bill LuMaye Show on WPTF in North Carolina (5/11/2015).
  • Edward Timmons and Anna Mills publish, “Short-Sighted Policy,” at S. News and World Report (2/17/15).
  • Veronique de Rugy publishes, “Free the Horse Masseuses!” in Reason Magazine (July 2014).
  • Veronique de Rugy discusses state occupational licensing on Richmond’s Morning News on WRVA in Virginia (6/6/14).
  • Veronique de Rugy publishes “Licensing laws protect special interests at the expense of opportunity,” at The Washington Examiner (3/28/14).
  • Patrick McLaughlin discusses occupational licensing on The Ed Dean Show in Florida (3/27/14).
  • Donald Boudreaux publishes “Occupational licensing: Reality differs from rhetoric,” in The Pittsburgh Tribune-Review (3/25/14).
  • Emily Washington blogs “Occupational Licensing Hurts Consumers and Limits Entrepreneurship,” at Neighborhood Effects (8/20/13).
  • Veronique de Rugy blogs “More State Occupational Licensing Law Abuse: Kentucky Edition,” at National Review’s The Corner (7/17/13).
  • Emily Washington blogs “Small steps in VA occupational licensing reform,” at Neighborhood Effects (6/25/12).

Today, the Obama administration announced 5 executive actions it is taking and 7 legislative proposals it is making to address the problem of patent trolls. While these are incremental steps in the right direction, they are still pretty weak sauce. The reforms could alleviate some of the litigation pressure on Silicon Valley firms, but there’s a long way to go if we want to have a patent system that maximized innovation.

The proposals aim to reduce anonymity in patent litigation, improve review at the USPTO, give more protection to downstream users, and improve standards at the International Trade Commission, a venue which has been gamed by patent plaintiffs. These are all steps worth taking. But they’re not enough. The White House’s press release quotes the president as saying that “our efforts at patent reform [i.e. the America Invents Act, passed in 2011] only went about halfway to where we need to go.” Presumably the White House believes these steps will take us the rest of the way there.

But the problem with computer-enabled patents isn’t merely that they result in a lot of opportunistic litigation, though they do. The problem is that almost every new idea is actually pretty obvious, in the sense that it is “invented” at the same time by lots of companies that are innovating in the same space. Granting patents in a field where everyone is innovating in the same way at the same time is a recipe for slowing down, not speeding up, innovation. Instead of just getting on with the process of building great new products, companies have to file for patents, assemble patent portfolios, license patents from competitors who “invented” certain software techniques a few months earlier, deal with litigation, and so on. A device like a smartphone requires thousands of patents to be filed, licensed, or litigated.

If we really want to speed up innovation, we need to take bolder steps. New Zealand recently abolished software patents by declaring that software is not an invention at all. It would be terrific if the White House would get behind that kind of bold thinking. In the meantime, we’ll have to watch closely as the Obama administration’s executive actions are implemented and its legislative recommendations move through Congress. I hope for the best, but for now I’m not too impressed.

I honestly don’t know. I haven’t been following his work, and, by saying I don’t know, I don’t imply that he didn’t achieve anything. But it’s utterly unclear from this interview with Nancy Scola what he achieved as chief technology officer in the Obama Administration the last few years.

I was piqued by the amusing—almost comical—claims to specificity he makes, right from the outset:

What is the elevator pitch on what you’ve been doing since you were named Chief Technology Officer of the United States?
What I do is advance the president’s innovation agenda by incorporating his bottom-up theory of change. To be very specific about it, I execute the president’s innovation strategy in a manner that taps into the expertise of the American people to solve big problems.

There is nothing specific about, “I execute the president’s innovation strategy in a manner that taps into the expertise of the American people to solve big problems.” If you were to look up “vague” in the dictionary, that sentence would illustrate the first definition of the word.

Ever notice how people say, “I don’t mean to interrupt,” when they are interrupting? How they say, “to make a long story short,” when it’s already too late? Chopra says he’s going to be specific as he heads into empty generalities. Further along in the interview , he talks about his role and his involvement, which would be interesting meta-information if it set the stage for describing accomplishment.

So the question stands: What things happened under Aneesh Chopra that wouldn’t have happened in his absence?

Caveats: Aneesh Chopra seems like a nice guy. I don’t doubt his sincerity or intention to have done good things. I don’t think he’s unique among bureaucrats in not having identifiable achievements. I am open to learning what he did achieve. He just hasn’t explained it himself.

This line of questioning also may seem disrespectful. Chopra has acted as a public servant the last few years and deserves credit for that, some would argue. But I disagree that the claim to “public service” should act as insulation against being held to account for performance. What did Aneesh Chopra achieve?

In a letter to the editor of the Washington Post last week, former FTC Commissioner Thomas Leary responded to a Post article describing the FTC’s suit against Intel as a  “major step for President Obama,” consistent with his campaign promise to “reinvigorate antitrust enforcement.”  Leary responded indignantly to this characterization by declaring:

People seem to forget that the FTC is a bipartisan independent agency. As a Republican FTC commissioner appointed by a Democratic president, I can vouch for the agency’s independence. During my service from 1999 to 2005 in the administrations of presidents Bill Clinton and George Bush, I never received a direct or indirect policy recommendation on a pending matter from anyone in the White House or from any of the people in Congress who had actively supported me.

Leary’s leeriness about political encroachment on the FTC illustrates the depth of abiding faith in independent regulatory agencies as standing truly apart from the day-to-day politics of Washington—especially when the might of the regulatory state is being wielded against a particular company in quasi-judicial prosecutions, such as antitrust enforcement actions. But if the independence of the FTC is this important, what about the independence of the Federal Communications Commission, with its broad jurisdiction over the media and tools of free speech?

Leary would probably be appalled at the politicization of the FCC in recent years. Bush’s second FCC chairman, Kevin Martin, was infamous for his political Machiavellianism and widely despised by the communications law bar. By contrast, when it became clear that Obama’s high-tech advisor Julius Genachowski would succeed Martin as FCC Chairman shortly before Obama’s inauguration, he received a chorus of applause from a wide range of philosophical perspectives, including from our former president at PFF, Ken Ferree:

Julius Genachowski is an outstanding choice to chair the Commission.  He is knowledgeable, experienced, and presumably will have the ear of the most influential people within the Administration.

While no one would compare the eminently likable Genachowski to Martin, his relationship to the Obama administration appears unprecedented in its closeness, and one must ask whether that’s a good thing for the head of a supposedly “independent” regulatory agency or integrity of that agency’s decision-making. At the end of November, the White House took the unprecedented step of releasing its visitor logs through the end of August—a major step towards the kind of transparency candidate Obama promised on the campaign trail. But the logs also revealed something remarkable: that Genachowski had visited the White House 47 times, making him the visitor with the third-most visits out of 1,786 total visitors.  This pattern is astonishing when one considers that no other agency head racked up more than five visits, and only a handful of independent agency heads visited at all, as Adam Thierer and I noted.

While most of these visits (39) occurred while Genachowski was technically serving as lead technology advisor to the new administration, it was clear even before Obama’s inauguration that Genachowski would be chairman, and 31 of those visits occurred between his formal nomination and confirmation. A further eight visits occurred after his Senate confirmation, when he was officially FCC Chairman—but even that far exceeded visits by other agency heads, and occurred during what are generally the two slowest months Washington, July and August.  So it will be very interesting indeed to see how much more visits Genachowski has logged since August when the White House releases updated visitor logs, as it has promised to do “in December 2009.” That clock is winding down rapidly!

So what’s the big deal? As Adam Thierer and I noted in October:

at least in theory, “independent agencies” are supposed to be just that: independent.  They aren’t part of any Cabinet-level department and are supposed to be insulated from direct, day-to-day political pressure through bipartisan commissions, fixed terms, and safeguards against presidential removal.  At least that was always the “progressive ideal”: independent, “scientific” expert agencies and officials.

Think back to Leary’s comment as a former Republican Commissioner—defending an enforcement action taken by a now Democratic-led FTC with a palpable outrage that anyone should question the independence of his successors or try to cast the FTC’s enforcement actions in a partisan light:

[Over six years] I never received a direct or indirect policy recommendation on a pending matter from anyone in the White House or from any of the people in Congress who had actively supported me.

Leary’s vision of agency independence is so profoundly different from Genachowski’s apparent practice that one might think Leary was describing how regulatory agencies operated in a different century or on a different planet. At the very least, Genachowski’s close relationship with the Obama administration will make it difficult, if not impossible, for anyone on the outside to clearly demarcate between Genachowski’s decisions as Chairman and the Administration’s agenda—as Leary could do for the FTC. That means the many contentious issues the FCC will deal with in the coming years (e.g., net neutrality and potentially broader regulation of the applications and services layers of the Internet) will likely become increasingly partisan issues—which is a recipe for poor policy-making, especially given how highly technical some of those issues are.

This dynamic is most disturbing when it involves the FCC above all other “independent” regulatory agencies, as we noted:

whose extensive media regulations give it leverage that has been used to squelch political opposition to past administrations. Even liberal Democrats, such as Alfred Kahn, a Carter appointee, have long recognized that the FCC is particularly vulnerable to “regulatory capture” by special interests.  That’s why the FCC requires disclose of all “ex parte” meetings between Commissioners or staff and “interested parties” outside government.  Genachowski’s predecessors, Kevin Martin and Michael Powell, were both criticized by Democrats for their close ties to the Bush administration, largely because of fears that special interests were influencing FCC decisions through the White House.  Had either Republican visited the White House half as often as Genachowski, there would have likely been howls from the Left about “undue influence.”

And even more disturbing when it involves this hyper-activist FCC, with a sweeping view of its own jurisdiction:

Under Genachowski, the FCC has essentially asserted jurisdiction over the entire Internet, recently inquiring about regulation of online television, video games, Google Voice, cloud computing, the Apple apps store, and resurrecting railroad-era concepts of common carriage “neutrality” in ways that could ultimately apply not only to broadband, but also to search engines, social networking, and devices.  As we’ve warned, Chairman Genachowski is leading us down the road of vastly increased government meddling across cyberspace.  That regulatory apparatus will inevitably be used as a tool of politics, if not by this administration, then by another less noble one in the near future—which might explain why some in this administration are so keenly interested in Chairman Genachowski’s FCC.

Ultimately, the health of any democracy depends on the independence of its media from political meddling. After free speech rights guaranteed by the First Amendment and due process rights guaranteed by the Fourteenth Amendment, the independence of the FCC from direct political pressure has been perhaps the greatest bulwark of freedom of the press in America. Discard that all that  and it’s not hard to see how we could someday, perhaps under some future president, see headlines like this one the Land of the Free: ” Venezuela: Chávez Won’t Renew TV Station’s License.”

If Genachowski, an exceptionally well-qualified technocrat, wants to avoid being seen as the “Cat’s Paw” for a highly ideological administration with a broad agenda of reinventing a radically more “Progressive” America, he would do well to ask “What Would Leary Do?” and be a lot more leery of even creating the impression of taking any “direct or indirect policy recommendation” from the White House.

If Democrats don’t like the sound of ” Palin Won’t Renew TV Station’s License” (or “Gingrich Won’t Renew Google’s Search Engine License“), they had better start remembering that every action taken by this administration and its appointed independent agency heads will set precedents for presidents they may loathe as much as, say, Richard Nixon, whose abuse of the FCC’s “Fairness Doctrine” as an instrument of censorship is legendary.

by Adam Thierer & Berin Szoka

Move over, health care reform, climate change, and the economy. Judging by White House visits by various government agency heads, the Obama administration instead appears preoccupied with the re-regulation of communications, media, and the Internet. The Administration has just released logs of all visitors to the White House and Executive Office Buildings from Obama’s inauguration through August—including a staggering 47 visits by Federal Communications Commission (FCC) Chairman Julius Genachowski. By contrast, no other major agency head logged more than five visits.  Chairman Genachowski obviously has an audience with those at the highest levels of power, including the President himself, but this raises questions about just how “independent” this particular regulator and his agency really are.

Unprecedented Transparency by White House

The Administration deserves credit for releasing these visitor logs, which offer unprecedented transparency into the White House’s workings.  Unfortunately, the logs lack visitors’ affiliation and title, making it difficult to discern subtle patterns.  Furthermore, each entry indicates only one “visitee” and the total number of people involved.  Full disclosure requires identifying all meeting participants. Nonetheless, President Obama’s gesture is a great first step toward improved government accountability.

This openness allows us to ask questions we couldn’t pose for previous administrations—such as why the FCC head seems to have unparalleled access to the White House.  Lacking data from previous administrations, it’s difficult to make direct comparisons with previous FCC Chairmen, but the sheer number of visits by Chairman Genachowski leaves no doubt about his uniquely close involvement with the White House.

Given the ongoing economic/financial crisis, you might think that the President and White House officials would be meeting regularly with the heads of other independent agencies, such as the Federal Reserve, Securities and Exchange Commission, Small Business Administration, Federal Trade Commission, Federal Deposit Insurance Corporation, and National Labor Relations Board.  But not one of those agency heads appears to have logged a visit through August.  Climate change?  Just a single visit with the EPA Administrator.

And Cabinet-level officials?  Just 23 visits among 21 officials.  How is that possible, you might ask?  Apparently, Obama held just one full Cabinet meeting in the first seven months of his presidency (in May)—followed by a second meeting in November (well after the logs end). So, while President Obama and White House staffers were too busy to meet with Cabinet-level officials, they always made time for Chairman Genachowski.  Indeed, of the 1,786 visitors listed, only two logged more visits than Genachowski: Bancorp CEO Richard Davis (56) and Lee Sachs (61), Deputy Treasury Secretary.

President Obama appears as the “visitee” for two of Genachowski’s many visits, but could have met with him along with others if someone else was listed as the visitee.  More telling is that only 7 of his 47 visits included more than 10 attendees, and 25 were one-on-one—meaning that the FCC Chairman usually had a personal audience or a small audience.

Why all this attention for such a relatively obscure regulatory agency?  Genachowski served as Obama’s Technology Advisor during the campaign, the transition, and the beginning of the administration.  Eight of his 47 visits occurred before his long-anticipated nomination as FCC Chairman was announced on March 3, with 31 more before his June 29 confirmation.  Only eight occurred after his confirmation, but July and August are generally Washington’s slowest months, so it will be interesting to see just how many more visits he’s racked up since August when the administration releases updated logs.  Probably far more than any other independent agency head: Even his eight visits in July and August are remarkable compared to the near complete lack of visits by other agency heads.

How Independent?

Why care?  Well, at least in theory, “independent agencies” are supposed to be just that: independent.  They aren’t part of any Cabinet-level department and are supposed to be insulated from direct, day-to-day political pressure through bipartisan commissions, fixed terms, and safeguards against presidential removal.  At least that was always the “progressive ideal”: independent, “scientific” expert agencies and officials.

Of course, it was always more mythology than reality, since bureaucratic management is rarely “scientific” and these agencies are routinely subjected to blatant political pressure from White House officials and Congress.  Any history of America’s broadcast sector includes stories of political meddling at the FCC—often prompted by officials outside the agency.  Nonetheless, there are good reasons for maintaining a firewall between independent agencies and politicians—especially the FCC, whose extensive media regulations give it leverage that has been used to squelch political opposition to past administrations.

Even liberal Democrats, such as Alfred Kahn, a Carter appointee, have long recognized that the FCC is particularly vulnerable to “regulatory capture” by special interests.  That’s why the FCC requires disclose of all “ex parte” meetings between Commissioners or staff and “interested parties” outside government.  Genachowski’s predecessors, Kevin Martin and Michael Powell, were both criticized by Democrats for their close ties to the Bush administration, largely because of fears that special interests were influencing FCC decisions through the White House.  Had either Republican visited the White House half as often as Genachowski, there would have likely been howls from the Left about “undue influence.”

Interestingly, after his nomination, Chairman Genachowski met at least four times with Cass Sunstein, who now heads the Office of Information & Regulatory Policy (OIRA).  While Sunstein was not confirmed until September, their meetings raise important questions, since OIRA ultimately has final sign-off on the FCC’s regulations. Have the two continued to meet since?  If so, one hopes it was not to discuss Sunstein’s disturbing proposal for “electronic sidewalks” for cyberspace—a “Fairness Doctrine” for the Internet!

Is This Good or Bad for the Internet?

The critical issue is whether the FCC’s special relationship with the administration is beneficial for America’s dynamic digital economy.  That depends on whether you like the sound of a “New Deal 2.0” because—with the exception of some genuinely laudable eGoverment/transparency initiatives and openness to real spectrum reform (to be discussed at PFF’s upcoming event with Blair Levin this Tuesday, December 2nd)—that’s generally what the administration is pushing for in communications and media policy: command-and-control central planning of high-tech, backed by massive infrastructure subsidies and the re-regulation of sectors that have thrived since deregulation.

Under Genachowski, the FCC has essentially asserted jurisdiction over the entire Internet, recently inquiring about regulation of online television, video games, Google Voice, cloud computing, the Apple apps store, and resurrecting railroad-era concepts of common carriage “neutrality” in ways that could ultimately apply not only to broadband, but also to search engines, social networking, and devices.  As we’ve warned, Chairman Genachowski is leading us down the road of vastly increased government meddling across cyberspace.  That regulatory apparatus will inevitably be used as a tool of politics, if not by this administration, then by another less noble one in the near future—which might explain why some in this administration are so keenly interested in Chairman Genachowski’s FCC.

Maybe Obama should invite Google CEO Eric Schmidt and Microsoft CEO Steve Ballmer over to the White House for a beer to settle the two companies’ differences!

http://www.youtube.com/v/Q0umKaGxkkE While he’s at it, Obama might want to invite Apple CEO Steve Jobs, too, since the common cause Apple and Google once made against Microsoft now seems to be giving way to increased rivalry between the two titans of Internet cool. Or how about Facebook CEO Mark Zuckerberg, given Facebook’s growing challenge to Google? Yahoo!’s Carol Bartz seems to get along much better with everyone than the boys in the group, so she’d probably help Obama keep things under control. The Internet industry’s war-of-all-against-all is reminiscent of Tom Lehrer‘s classic 1960s satire “National Brotherhood Week”:

My post yesterday wondering aloud whether the Obama administration was walking away from its transparency commitments was slightly premature. Memoranda were being issued/reported on as I wrote, and this morning’s Washington Post describes some of the technical glitches that befuddled White House staff on day one. The texts of the executive orders President Obama signed yesterday are now online, but his memoranda on transparency aren’t yet. Helpfully, they’ve been posted by the Sunlight Foundation.

But I think my post was sound in the main, because I was looking for actual pro-transparency deeds from the new administration, and they haven’t materialized. I appreciate the sentiments voiced in these documents, but don’t find myself wholly impressed with the actual transparency measures the White House has taken.

What I’m hearing is the transparency dog that didn’t bark: The Obama team set a great precedent in the transition with the Seat at the Table program, but there’s no sign that such a thing will be implemented in the White House. Why not?

We can expect an “Open Government Directive” within 120 days and new guidelines for the Freedom of Information Act, but I would have appreciated seeing President Obama’s commitment to openness illustrated the best way possible: through the direct and immediate commitment of his own White House operation.

The White House will not be run as openly as the transition was. The agencies, already predisposed against transparency, will see this as a sign of weak commitment and will whittle away even more fiercely at the good sentiments President Obama’s expressed in his transparency memoranda.

(“Thanks for inviting me!” said the skunk at the garden party.)