Why the Democrats Lost Tech

🌈 Abstract

The article discusses the growing divide between the Democratic party and the tech industry, and explores the reasons behind this shift. It suggests that the Democrats can win back the support of the tech community by acknowledging their shared goals, addressing the regulatory challenges faced by tech companies, and partnering with them to solve America's biggest challenges.

🙋 Q&A

[01] The Democrats are fighting tech more aggressively

1. What are some examples of the Democrats' aggressive regulation of the tech industry?

• The Democrats, through figures like Elizabeth Warren and SEC Chairman Gary Gensler, have been regulating the crypto industry more aggressively, trying to "build an anti-crypto army" and using enforcement actions instead of clear regulations.
• The Biden administration has also proposed restrictive regulations on AI development that many in the tech industry see as "arrogant about an unknowable future" and stifling innovation.
• California is also pushing through an AI bill (SB 1047) that the tech industry views as damaging.

2. How has this aggressive regulation contributed to the tech industry's drift away from the Democratic party?

• Many in tech feel that the Democrats would rather see tech companies lose than help America win, with the aggressive regulation seen as impediments to solving big problems.
• This is a stark contrast from the previous "deal" where tech companies were allowed to innovate in peace in exchange for paying taxes and donating to Democrats when they got rich.

[02] The "broken deal" between Democrats and tech

1. What was the unspoken "deal" between the Democrats and the tech industry?

• The deal was that tech companies would keep cities "humming" and be allowed to innovate in peace, in exchange for paying taxes and donating money to Democrats when they got rich.

2. How did this deal break down?

• The intense negative media coverage of tech, particularly blaming Facebook for Trump's 2016 election win, led to the Democrats turning against the tech industry.
• As tech companies got richer and more dominant, they became seen more as the problem rather than the solution, leading to increased Democratic hostility.

[03] Tech is richer than it used to be

1. How has the increasing wealth of the tech industry contributed to the divide with the Democrats?

• When Barack Obama was elected in 2008, only one of the world's 10 richest people made their money in tech. Today, 7 of the 10 richest are American tech entrepreneurs.
• As tech has become the most valuable sector of the economy, the Democrats have taken a more adversarial stance, seeing big tech companies and rich tech entrepreneurs as the problem rather than an ally.

2. How does this historical pattern of Democratic opposition to dominant industries play a role?

• There is a clear historical pattern of Democratic opposition to dominant industries, such as Theodore Roosevelt breaking up Standard Oil and William Jennings Bryan's populist campaign against eastern banking interests.
• As tech has become the dominant industry, it has put it on a collision course with the Democrats' historical tendency to target powerful industries.

[04] Tech is building in areas where regulation is more of a direct impediment

1. What are some examples of how tech is moving into areas where government regulations are more of a hindrance?

• As tech moves beyond just software into the physical world, it is running into regulatory hurdles like the National Environmental Policy Act (NEPA) that can slow down or block progress on things like renewable energy, housing, and infrastructure projects.
• Elon Musk and Founders Fund, which have invested in "hard tech" like SpaceX, have been at the forefront of dealing with these regulatory challenges.

2. How has this shift contributed to the divide between tech and the Democrats?

• When tech was focused on software, government regulations were less of a direct impediment. But as tech tackles bigger problems in the physical world, the Democrats' tendency towards more regulation has become a major point of friction.
• Tech sees the Democrats as adding too many requirements and restrictions that slow down progress, rather than focusing on enabling innovation.

[05] Someone else makes the world a better place better than we do

1. What is the fundamental difference in worldview between the Democrats and the tech industry?

• The Democrats believe that a small number of highly educated, good people can devise policies and programs to solve the biggest problems.
• The tech industry believes that free market capitalism and innovation can solve those problems in a more fundamental and enduring way.

2. How does this difference in approach lead to the breakdown in the relationship between the two groups?

• The tech industry sees the Democrats' prescriptive policies and programs repeatedly failing to address root causes, while becoming more entrenched despite their ineffectiveness.
• This frustrates the tech industry, which believes that even if their own solutions aren't perfect, the capitalist system will ultimately produce better outcomes than government programs.

3. What are some examples of the Democrats' "Everything Bagel Liberalism" that have frustrated the tech industry?

• The slow rollout of the $42.5 billion in broadband funding, with no homes or businesses connected nearly 3 years after it was signed into law due to burdensome requirements.
• The Biden administration's reversal of $888.5 million in rural broadband subsidies granted to SpaceX by the Trump administration.
• The California High Speed Rail project, which has spent $11 billion over 9 years to produce only 1,600 feet of track.

4. How does this perception that the Democrats don't actually care about getting things done contribute to the tech industry's drift towards the Republicans?

• The tech industry believes that American ingenuity and the capitalist system are the greatest forces for good, and they want the chance to compete and implement solutions without unnecessary government impediments.
• While they don't necessarily support Trump's policies, they see him as potentially being more willing to get out of the way and let them do what they do best, even if he doesn't follow through on his promises.