Can the Obama Administration Spare Some Real Change?

The Obama administration is ushering in a new era of big government, higher taxes and more spending, to an extent that even supporters are worried. The tech-savvy president should consider recent suggestions from the technology and science sector, such as the idea that not all problems can be solved by simply throwing money at them.

The National Cancer Institute (NCI) is poised to receive a windfall of cash from the US$10 billion being directed to the National Institutes of Health. Most people don’t mind such spending priorities since health, and in particular cancer, is a serious problem in need of better solutions. But spending money does not automatically create solutions and, in fact, can exacerbate problems already in place.

One of the biggest problems in the area of cancer research, according to Mark Thornton, president of the Sarcoma Foundation of America, is the “inability to quickly perform the clinical trials necessary to determine whether cures that work in test tubes will also work in humans.” The reason is that current trials wait to see whether someone’s life is saved verses whether or not a drug is helping to change key indicators of whether someone is getting better or worse. The first way involves waiting years to see if someone improved and the second method involves using other “surrogate indicators” to measure progress more quickly.

More Thinking Rather Than More Funding

This problem is holding back quality care for millions, but to fix it does not take mountains of money. What it requires instead is an innovative change in thinking — something everyone had expected from the Obama administration but are still waiting patiently to see in action. Looking at the problem in terms of how government can help improve the way the system works, rather than drowning a failing system in more money, can help bring about the positive change the entire country wants.

A second suggestion from the worried science and tech sector came from Reid Hoffman, founder and chief executive of business social networking site LinkedIn. The Obama administration, Hoffman wrote, “should make a point not only to avoid propping up failing, over-leveraged institutions but to finance new businesses, back promising ventures, welcome the best foreign minds and nurture native talent.” Hoffman’s instinct that entrepreneurship and innovative ideas drive the economy is spot on, but government funding of such ventures is a bad idea.

The reality is that governments do not create jobs, businesses do. That is why Hoffman is correct to note what many in Silicon Valley already know firsthand: talented people, no matter where they were born, are always a net gain. Indeed, as Vivek Wadhwa has pointed out, immigrants are responsible for starting more than half of all new companies in Silicon Valley in the past decade. That’s a lot of jobs and tax revenue, and for too long companies have had to fight restrictive H1B caps on the qualified workers they cannot find at home.

Tied Up in Politics

But the idea that government should select and back new technology companies is misguided. That’s because where government exists, so must politics, which tends to get in the way of the most practical and economically viable decisions. Consider the current vision of technology use from the Obama administration.

The administration desperately wants to send mass email and text updates on presidential initiatives, but the bureaucratic rules governing political action have hamstrung such plans. A company, or campaign for that matter, can simply communicate with its constituents, but when the government is involved, different rules of the game apply. There have been similar problems with video broadcasts, and the president’s use of YouTube came under strong fire for breaking government privacy policies.

It’s easy to see how government investment in tech startups would quickly cease to be based on market factors such as the strength of a business plan, product integrity, the quality of the people, and consumer demand. Instead it would be based on gender and racial quotas, social goals (perhaps attempting to ensure everyone can own a home), and other political calculations.

President Obama promised change, but so far, most of us have seen nothing but a return to tired policies of tax and spend that are bound to fail. America’s science and technology sector remains a bright light in a dim economy, but for that to continue, the freedom to innovate must be expanded, not restricted.

To bring about meaningful change, the new administration could start by reworking the rules on clinical testing for cancer, lifting government restrictions on skilled immigration, and creating the right environment for private, not public, investors to start technology companies.

Sonia Arrison, a TechNewsWorld columnist, is senior fellow in technology studies at the California-based Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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