The FCC and the Jobs Report

On Wednesday the FCC announced that it was going to put off tightening regulations on broadband providers. Today, the Bureau of Labor Statistics announced that private payrolls rose by 67K in August, a gain mostly due to an increase of 45K in healthcare and education, two sectors that are heavily government supported.

Indeed, over the past year, the rest of the private sector, outside of healthcare and education, has lost jobs.

However, there are pockets of strength. One such pocket is in the communications sector, where employment wireless communications, Internet companies (think Google), and custom computer programming services (think apps developers) are up over the past year. This is a sign that this sector may be one of the leaders in the recovery.

From that perspective, the FCC made exactly the right decision when it postponed imposing new regulations on communications. At a time when there are so few economic bright spots, it would be a serious mistake to take a regulatory hammer to a growing sector.

There’s a sign that the FCC is recognizing these imperatives. In the statement released on Sept. 1, the FCC said:

in light of rapid technological and market change, enforcing high-level rules of the road through case-by-case adjudication, informed by engineering expertise, is a better policy approach than promulgating detailed, prescriptive rules that may have consequences that are difficult to foresee

But there’s a broader principle here. As I have suggested, the Obama Administration needs to think in terms of countercyclical regulatory policy. Regulations are essential for making the market economy work, but timing is essential–not just in communications, but in biosciences, environment, education, and a whole host of different areas. Overly enthusiastic regulation in a deep downturn is not the way for fast and healthy growth.

About Michael Mandel 127 Articles

Michael Mandel was BusinessWeek's chief economist from 1989-2009, where he helped direct the magazine's coverage of the domestic and global economies.

Since joining BusinessWeek in 1989, he has received multiple awards for his work, including being honored as one of the 100 top U.S. business journalists of the 20th century for his coverage of the New Economy. In 2006 Mandel was named "Best Economic Journalist" by the World Leadership Forum.

Mandel is the author of several books, including Rational Exuberance, The Coming Internet Depression, and The High Risk Society.

Mandel holds a Ph.D. in economics from Harvard University.

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