What if our current economic crisis was not just caused by poorly designed financial markets, but by a lack of growth driving innovation?
what if the conventional wisdom is wrong? What if outside of a few high-profile areas, the past decade has seen far too few commercial innovations that can transform lives and move the economy forward? What if, rather than being an era of rapid innovation, this has been an era of innovation interrupted? And if that’s true, is there any reason to expect the next decade to be any better?
I would recommend you read the entire article, but if you don’t have time, you can skip to the punch line:
“A high-wage country such as the U.S. either has to develop innovative products and services to compete with low-cost countries such as China or accept a lower standard of living.”
We need to avoid policies that distort market incentives, because these policies (more often than not) draw capital (time and money) away from the efficient and growth producing uses.