PPI Policy Memo Recommends Countercyclical Regulatory Policy During Economic Downturn

WASHINGTON, Nov. 16, 2010 /PRNewswire-USNewswire/ -- How can we create new jobs and get the economy moving again? The Fed has exhausted the tools of monetary policy, and with a looming deficit crisis, there's no will to spend on another stimulus. What are policymakers to do?

In a policy memo released today by the Progressive Policy Institute (PPI), PPI Senior Fellow Michael Mandel offers a new way to encourage growth: by identifying the most innovative industries and giving them the freedom to innovate and grow without worrying about too much regulation. Mandel calls this approach "Countercyclical Regulatory Policy."

Mandel's research offers two key points:

1. The cost effect of regulation is likely to have an immediate negative impact on jobs and innovation.
2. Regulations have to go through a cost-benefit analysis—but this cost-benefit must include the impact of the regulation on innovation.

"Countercyclical regulatory policy is an essential part of showing that we are serious about jobs and growth," writes Mandel in the memo, entitled Reviving Jobs and Innovation: The Role of Countercyclical Regulatory Policy. "We cannot say that we want innovation and then proceed to impose onerous new regulations on precisely those industries that are innovative and generating jobs."

"Expansive fiscal and monetary policies have so far failed to jumpstart our economy," said Will Marshall, PPI President. "Mandel has a creative suggestion for Washington policy-makers: don't ignore regulatory policy. We need one that protects the environment for innovation, not one that steps on sectors that are generating new jobs."

To access the full memo, visit: http://bit.ly/cFZkgv.

The Progressive Policy Institute is an independent research institution founded in 1989 that seeks to define and promote a new progressive politics in the 21st century. Through policy analysis and dialogue, PPI challenges the status quo and advocates for radical policy solutions.

SOURCE Progressive Policy Institute

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