Legendary computer scientist Alan Kay once said “The best way to create the future is to invent it.” It’s an ethos that has animated every great American entrepreneur and driven our nation’s economy since its founding.
Will that attitude survive the times we live in?
Today, two competing impulses vie for the soul of our nation’s economy. The first is that great American impulse: See a problem, start a company and solve the problem. The second is the advice of our nation’s crony Capitol: Hire a lobbyist to get politicians, regulators and bureaucrats to enact policies that protect you from competition.
Nowhere has the spirit of entrepreneurship been greater in the world than Silicon Valley. It is a bastion of free enterprise and proof the American Dream remains a reality.
Yet, ever since Sen. Orrin Hatch, R-Utah, famously told Bill Gates in 2000 “If you want to get involved in business, then get involved in Washington,” the Valley’s relationship with Washington has changed. The evolution of Big Tech has been well-documented. Once adverse to the ways of Washington, the industry has embraced the capital’s pay-to-influence culture, and headlines this week paint a startling picture:
The Hill: McCarthy’s rise could be boon for tech
Politico: Tech riding high with expected McCarthy ascension
In article after article, Kevin McCarthy, the third-ranking House Republican, is portrayed as the “unofficial ambassador to Silicon Valley for House Republicans.” Facebook’s vice president of U.S. public policy told one Washington publication that McCarthy “intuitively understands the industry’s culture of innovation and knows what’s needed to protect it.”
Protect it?
Facebook didn’t grow into a $168 billion company because Washington took steps to protect it. The same is true for tech giants Amazon, Apple, eBay, Google, Intel and Microsoft. Nonetheless, companies and industries increasingly see their future tied to various actors in Washington. Take Dave Brat’s stunning victory last week. It sent shockwaves through the business community. Again, the headlines said it all:
Politico: Wall Street loses ally with Eric Cantor loss
KC Business Journal: How Eric Cantor’s loss is bad for business — big business, that is
Boeing’s stock dropped 2.3 percent the day after Brat’s victory on fears the Export-Import Bank would not be reauthorized. The taxpayer-backed export agency is predicted to “support” $10 billion in Boeing sales this year even though the company stated less than a year ago it could find its own financing.
On Fox News Sunday last week, George Will explained the significance of the Ex-Im Bank, which he said played “a larger role” than amnesty in Brat’s victory:
“I’ll tell you something that may get done now because of this, and that is de- authorizing, refusing to reauthorize the Export-Import Bank, which is known in Washington for very good reason as Boeing’s bank, and has become a symbol to people like David Brat of crony capitalism, not without reason.”
Even if you set aside the merits of this particular government intervention or that particular program, the degree to which businesses rely on the U.S. government and the ability a single member of Congress has to affect an industry is alarming.
The defeat of one politician and the elevation of another should not have an impact on industry, but it does. As government growth has gone unchecked, so too has the influence of government, politicians and bureaucrats in private sector business plans. Whether we want to admit it or not, America’s economy is a political economy.