The wealth of Hollywood has historically been a magnet for Democratic politicians, and it remains so; Hillary Clinton spent two days draining the pocketbooks of Justin Timberlake and other luminaries this week.
But the past two Democratic presidential nominees also made hay further north in California, targeting the tech sector. Barack Obama has dined in the homes of so many Silicon Valley luminaries, from Facebook COO Sheryl Sandberg to Yahoo CEO Marissa Mayer (then at Google) to 23andMe founder Anne Wojcicki to venture capitalists John Doerr and Steve Westly and more, that you could run an “Obama Ate Here” tour through San Mateo and Santa Clara counties.
This week, Clinton followed suit with a dinner fundraiser at the home of Steve Jobs’ widow Laurene, thrown by Apple CEO Tim Cook. And the Clinton campaign’s list of “Hillblazers,” those who have contributed or raised over $100,000 to her election fund, includes CEOs and top current and former executives at Facebook, Salesforce, Google, Zynga, SAP, SolarCity, Bebo and LinkedIn, along with several venture capitalists.
These are not individuals Clinton took meetings with out of courtesy, but big donors and bundlers trying to put her in the Oval Office. When they are as concentrated in one industry as they are, we can be reasonably concerned that the industry will carry undue influence. And while Clinton often gets criticized for her ties to Wall Street, I think the coziness with Silicon Valley ought to be a much bigger priority.
That’s not just because of the avalanche of money coming from the tech sector, almost entirely in Clinton’s direction rather than toward her opponent, Donald Trump. (Among Apple employees, the money spread is $156,000 for Clinton, $665 for Trump). It’s reflected in policy, as a troubling Politico story details.
Clinton lined up over 100 industry advisors to help design a tech and telecommunications policy “that echoes many of Silicon Valley’s top priorities.” This collaboration between government and business at the highest echelons, precisely what has so many Americans angered by corporate-written trade deals like the Trans-Pacific Partnership, is nothing new; Obama’s administration is fully tied up with Google, for example. And some of the policy ideas, like ending the predominance of “patent trolls” that use the legal system to make money off other’s inventions, are first-rate. But others are clearly meant to benefit Silicon Valley at the expense of the nation.
For example, there’s the section on “setting rules of the road to promote innovation.” This prioritizes reducing regulatory barriers, whatever they may be, to bringing new products to market. To the extent this tears down incumbency protection and opens markets, that’s a good thing; to the extent it simply transfers old incumbent power to new incumbents who will throw up the drawbridge once they acquire power, it’s very dangerous.
Then there’s the fact that local regulations often are in place for a good reason. Allowing Airbnb to violate laws against effectively running hotels without paying the transient occupancy tax does no city any good. Allowing Uber and Lyft to acquire a monopoly in not just taxicabs, but the public provision of transit services only courts disaster once prices rise and costs shift to the individual or municipality. The libertarian streak of the tech sector is replicated in Clinton’s “disruptive economy working group,” coming up with policies benefiting companies like Uber that are battling local regulators.
Even policies like the Obama administration’s order ending the cable industry’s monopoly on set-top boxes, noble as it looks at first glance, creates a clear winner in Google. Clinton may sound welcoming in preserving high-skill immigration through the H1-B visa program, but that’s almost entirely a priority of Silicon Valley. And an agenda to crack down on banks through competition may bear fruit; the financial technology (or fintech) companies circling the sector certainly hope so.
The root of this tech policy advisory team is to carry out that now-mocked slogan of making the world a better place. As spokesman Tyrone Gayle told Politico, Clinton “will reach out to the tech community to partner with them, and bring the best of their ideas to Washington to help develop public policy that will lead to broad-based growth, reduce social and economic inequality, and secure American leadership on the global stage.”
The problem is that Clinton cannot just be a partner with an entire business sector. As head of the executive branch she also directs their regulators. She must protect consumers and small businesses and the broadly diverse economy. When you treat private enterprise like a working partner, and begin to rely on it, trouble can ensue. Almost imperceptibly, governments can get lenient on their partners when they engage in questionable practices.
Those practices already exist. In becoming the most important media outlet in America, Facebook has decimated the open Internet and returned it almost to AOL-era walled garden status, something that stunts innovation all by itself, along with narrowing the range of media that gets read and shared. Platform monopolies like Amazon and Google similarly crush competition, bias their own products and push out entrepreneurship. The entire sector colluded to drive down the wages of its employees.
Clinton and her husband gave a lot of speeches to Wall Street banks, but she also spoke to eBay and Salesforce and Cisco and assorted tech companies. The difference between the ties to Wall Street and the ties to Silicon Valley is that there are existing champions inside the party favoring crackdowns on Wall Street. If Clinton decided to dole out favors to financial institutions, Elizabeth Warren and Bernie Sanders and the majority of the party they represent would be on high alert. No such champion exists today for making sure the tech sector doesn’t similarly become too big to fail.
The technology industry is now stocked with dozens of former Obama officials, and we can expect similar closeness in a Clinton administration. Will anyone question the propriety of such practices? Are too many people looking to New York when their eyes should be trained on Palo Alto?