The left, right and center of the American political system have all decided to apply the federal government’s full regulatory power to the U.S. information technology (IT) sector, and that might be a clue that we all need to reassess our position. As the coronavirus spreads, jeopardizing livelihoods and the economy at large, it may also be time for the government to reassess its relationship with robust private sector job creators, and stop seeking to tie them down and punish them.
Any nation anywhere in history would be pleased and proud to have the American IT sector as its own, and to be home territory for the likes of Microsoft, Facebook, Amazon and Apple. And only a recently fully employed America that has so much wealth and strategic depth would undertake a bipartisan effort to hamstring its most dynamic business sector. It is difficult to imagine the Europeans, Japanese or Chinese waging political and regulatory war on domestic companies that dominate the global market in their given sectors.
European tech is, to put it impolitely, a wasteland. Yet the European Union fines and punishes big U.S. technology firms for being efficient, effective and profitable. Is it any wonder EU unemployment is 100% higher than unemployment in the U.S.? The EU appears to be about punishing success, not creating jobs and wealth for their people.
It is odd to see Donald Trump’s Federal Trade Commission (FTC) and Justice Department doing what you would expect from a Sanders or Biden administration, or the European Union. Why does President Trump, who is truly pro-business and faces a tough re-election battle this year, have his administration leading the charge to carve up and slim down these huge job producers and stock market leaders?
To use another example, why would California launch state-level regulatory efforts that could drive their crown jewels out of Silicon Valley and relocate to more friendly locales like Texas, Idaho or even Boston? California has long been the home of technological innovation, but entrepreneurial businesses will turn on a dime if the state government becomes too overbearing.
Is it really so awful to have targeted internet ads appear for products that you have shown a past interest in? Why is that different from direct mail or telemarketing? Are we really going to have our voting brains manipulated by a group of Russian-generated algorithms to vote for something or somebody that we probably like anyway? Our democracy is 244 years old. Are American voters really that frail? And if we are so worried about the security of our medical history, why did the federal government compel the entire medical sector to adopt electronic health records over the last 11 years?
And, I would argue, if you are worried about what someone, some company, or the government, might find out about you, either don’t do anything wrong, or become less dependent on social media and online shopping. Make a phone call, use cash, and go to a brick and mortar store. (Yes, they still exist, and there are some near your house.)
You may have noticed that Donald Trump himself does not email or text. Perhaps there is a message in that, especially since so many of his political opponents have been embarrassed by leaked emails and texts. Can a candidate actually expect to run a presidential, legislative, or gubernatorial campaign and keep all of their emails under wraps? Can a senior official in, for example, the FBI, expect his or her “private” texts won’t somehow, someday leak?
And now we have budding efforts to regulate search engines. The last I heard, using a search engine like Google is absolutely free. How is Google supposed to make money if the government is going to regulate and manipulate its magnificent search engine? American consumers are smart and savvy enough to find what they really need on a search engine. And they can handle being steered one way or the other to certain political persuasions. The web has every imaginable political point of view on it (and some not so imaginable) and we really don’t need to worry, or certainly regulate, Twitter or Google if they seem to be steering us to the left. Heck, if we don’t like it, we can stop using Twitter, Facebook and Google, which is not going to be in those company’s interests if they take their politics too far.
Now that we are in a recession, and possibly a depression, will we remember what our politicians and bureaucrats did to some of our greatest job producers? The IT sector has thousands, indeed millions, of great-paying jobs, good benefits, and flexible hours. People love their products. The iPhone is a miracle, as is everything about Amazon. Apple creates and supports 47,000 American jobs, and indirectly boosts tens of thousands of other jobs supporting their products. Amazon directly employs 798,000 people. Will someone please tell me why this is a bad thing?
Amazon has hired 175,000 additional staff since the corona crash, yet the House Judiciary Committee and some Senate Republicans are more interested in applying antitrust dictums to Amazon than creating new jobs. 30 million newly unemployed Americans since the first of March ought to be enough to focus our attention on helping, not hurting, dynamic private companies. Does it make sense to subsidize and bail out collapsing companies with our right hand, while regulating and punishing thriving companies with our left?
This problem has even spilled over beyond trade, jobs and free speech, and into the national security arena. The FTC has decided to go after Qualcomm, America’s foremost 5G developer, for anti-competitive practices. The FTC’s actions have led to a federal district court judge ruling that Qualcomm is obligated to share its 5G intellectual property…even with its Chinese competitor. The federal departments of defense and energy are leaning against the FTC and this approach, but it shows you how far our regulatory agencies will go trying to punish American high-tech companies.
And tech companies are not the only targets of the political and bureaucratic warriors. Drug companies have been pounded for decades for having the audacity to create health-giving and life-saving prescription drugs. Cancer, AIDS and heart disease rates are dropping dramatically as a result. It is likely that American pharma will not only have coronavirus patches soon, they will probably have fixes sooner than anyone expects. As economist Stephen Moore points out, should we not celebrate the drug industry for this, instead of vilifying it? Like the American IT juggernaut, our domestic pharmaceutical sector is a dynamic innovation force and a global power.
As singer-songwriter Joni Mitchell warned us in 1970, “You don’t know what you’ve got ’til it’s gone.” We ought to heed that advice when we haphazardly wage political and regulatory war against our most successful companies. It was a big mistake before the corona economic collapse when this nation had full employment. Words cannot begin to describe it now.
Mr. Carey is a former senior Capitol Hill aide who is now CEO of the Lexington Institute.
A shorter version of this essay originally appeared in Inside Sources on April 17.
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