In post-pandemic America, inflation is out of control. Gas prices reached record highs. Housing costs are through the roof. So, of course, lawmakers are focusing on crushing high technology companies.
A bill called S. 2992, the American Innovation and Choice Online Act, is enjoying some rare bipartisan support. Republicans back it because they are angry about online censorship. They have a point, but this bill takes the wrong approach. The remedy to censored speech is more speech, not more regulation.
For their part, Democrats back the bill because they love regulating things, and they know they may soon lose control of Congress. Having a bunch of dependable bureaucrats in charge of high tech might help them regain power more quickly and keep it permanently.
The rest of us, however, should hate this approach. It’s the wrong bill at the wrong time, taking aim at one of the few things in our society that is still working well.
High-tech companies still operate in a low regulation, free-market environment and they are thriving. High tech is where all the growth is. It’s given us online banking, work-from-home options, even vaccine development. After all, medical science needed modern communication tools to develop vaccines. They couldn’t have shared their experiments and genetic science over an old school WATS line.
S. 2992 would harm consumers by hobbling productivity. It aims to take decisions out of the hands of private sector actors and hand power to government-appointed bureaucrats such as those at the misnamed “Consumer Financial Protection Bureau” who never have to answer to customers or voters. Banking hasn’t improved under the supervision of the CFPB. In fact, the big banks have gotten bigger, even while engaging in financial shenanigans. There is now a Wells Fargo on every corner, even though it was opening fake accounts and misleading its customers just a few years ago.
It hasn’t always been this way. During the 1970s, the government went in the right direction. When the economy bogged down in stagflation, lawmakers and presidential administrations from both parties worked to slash regulations on airlines, truckers, and oil companies. The result was a decades-long boom in the entire economy.
Today, though, the push for big regulation is back, and it would again strangle growth. As Caleb Watney of the R Street Institute warned during the 2020 pandemic. “[I]f the nation’s capacity for economic and technological innovation is diminished, Americans will feel the loss for decades to come—not just in lower GDP but in slower progress toward a vaccine for COVID-19, solutions to climate change, a cure for cancer, and more.”
If this bill became law, “Tech companies would have to re-engineer their platforms to avoid complaints from regulators and rivals,” the Wall Street Journal warned. “As a result, Amazon Prime subscribers might also not be allowed to stream Amazon original movies and TV shows for free or get free-two day shipping. A host of services that benefit consumers could disappear based on bureaucratic whim.” All that would accomplish would be to hurt productivity and slow innovation.
The U.S. is already losing its competitive advantage to China, as TikToc steals user data and feeds it back to Beijing. American companies should be empowered to invest in creating the next great apps, not be handcuffed by strict federal regulation of yesterday’s hot apps.
Lawmakers are moving fast on S. 2992. Too fast. It’s a lot more difficult to repeal a bad law than it is to delete an app. Policymakers should focus on fixing the real problems in the economy, and allow the free market to keep correcting high tech.
Bill Martinez is an award winning marketing and broadcast journalist and host of the nationally syndicated radio show, Bill Martinez Live.