The New York State Legislature has soundly defeated Mayor Bloomberg’s proposal for a city congestion pricing proposal. It’s not surprising because saying ‘no’ is the easy thing to do. It’s the safe thing to do. It’s also decidedly un-edgeeconomy.
Unfortunately in business and in politics, operating on the edge (that space where innovation thrives) seems to me, too often correlated with personal gain. Take the sub-prime debacle as an example. ‘Innovative’ lenders were pushing the envelope, but only because they stood to gain massive returns. Hedge funds like LCTM pushed the innovation envelope but motivated by money. In the new movie 21, we see a fascinating story of college kids using cutting-edge strategies, but only for their immediate personal gain (contrasted by the science dorks who are in fact innovating for the greater good). Even venture capitalists operate on the edge, principally because it is where the returns are highest.
The problem is that when returns are more societal than monetary, people have a more difficult time justifying the risk. They are less inclined to lay it on the line. I think this is what we saw with the congestion tax, a bunch of old-school politicians who took the safe way out.
It’s a shame.