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Silicon Valley discovers that the deal has been altered.

Oh, it will be altered further. No point to wasting time praying otherwise.

Elections have consequences, tech industry edition. Michael Malone has the details about “The Obama Surprise”:

No segment of American industry did more than high tech to elect Barack Obama as President of the United States. The 2008 Obama campaign will go down in history as having made better use of digital technology than any before it. From a hugely powerful website to the reproduction of the “Hope” poster on thousands of Facebook pages to the President’s own ‘tweet’ on election night, Silicon Valley played a crucial role in the success of President Obama . . .and Silicon Valley naturally assumed that the new President would do the same in return.

It hasn’t quite turned out that way. . .

(Via Glenn Reynolds)


To break down the piece, the tech industry is currently discovering one of two things, depending on whether they’re: a, part of the small start-up entrepreneurial subset; or b, part of the established big technical firm subset. If they’re the former, they’re discovering that in point of fact this administration is not particularly interested in promoting policies that would encourage – or, in fact, sustain – new company growth:

…almost every move the new Administration has made regarding entrepreneurship seems to be targeting at destroying it in this country. It has left Sarbanes-Oxley intact, added ever-greater burdens on small business owners, called for increasing capital gains taxes, and is now preparing to pile on cap-and-trade, double taxation on offshore earnings, and a host of other new costs. Even Obamacare seems likely to land unfairly on small companies.

Unsurprising: this is a Democratic administration, after all,and Democrats like things big. And regulated. ‘Predictable’ fits, now that I think about it. None of which is really compatible with the start-ups – but, as Malone notes, is compatible with the established companies, who don’t particularly want the start-ups around and uncontrolled anyway. So they’re fine, right?

Not so much:

Intel, already getting hammered by a billion dollar-plus fine by the EU, is now facing a similar punishment from the U.S. Justice Department. And poor suck-up Google, which tried to be the President’s BFF, now finds itself facing multiple Federal probes regarding its recruiting policies and its book database settlement – not to mention a Justice Department that appears to be opposing it on net neutrality.

And you’ve got to figure that’s only the beginning. No doubt right now somebody in the White House is looking at the low levels of union membership in high tech and vowing to do something about it. And don’t forget anti-trust. And woe be it to any shareholders or creditors of a big tech company that finds itself in financial trouble as this recession drags on – you saw what happened to Chrysler’s shareholders and creditors.

In other words, the latter group is discovering that they’re not partners with this administration; they’re seen as subordinates in it. Which means, in practical terms, that when the needs of the tech industry meet the restrictions of the Democratic party’s governing ideology, the tech industry will of course be expected to accommodate itself to the ideology. And if the tech industry wishes to change the Democratic party’s governing ideology, it will of course need to come up with a compelling pragmatic reason why its desires should outweigh those of, say, union organizers. It’s not that there’s anything malicious about it, even: but it’s a simple truth that organizations tend not to work harder than they have to in order to accomplish their goals, and the tech industry was pretty enthusiastic about not making the Democrats work hard to get their support. So why should the Democrats change their policies now?

What are the tech people going to do? Vote Republican?

Moe Lane

PS: If that last sentence made you chuckle at the absurdity of the very notion, don’t worry: we’ll check back in six months and see if you still think that it’s funny. Assuming that you still have an online presence that can be checked on, of course: after all, contrary to popular belief Internet access is not actually a necessity…

Crossposted to Moe Lane.

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