THE TECH INDUSTRY AND THE ‘BILLION DOLLAR ELECTION’
When Mark Zuckerberg’s Facebook purchased Instagram for approximately $1 billion, American news outlets quickly began compiling lists of what else a billion dollars can buy. Here is a short selection:
– College for 66,604 American students
– More than two million iPads
– The New York Times
Whatever the outcome in todays’ presidential election, we will be able to add another item to that list: the keys to the White House for four years. Totalling up money donated to the parties, to the presidential campaigns and, for the first time in a presidential election, to Super PACs, both Obama and Romney have now raised over $1 billion each. In fact, when you include elections to the Senate and the House, the results of which will determine what, if anything, the next president can do from now until 2016, the figure is closer to $6 billion.
Of course, it’s no secret that Romney and the Republicans have plenty of big-money backers. With an agenda of cutting regulations, maintaining a tax cut for the top 2% of earners, and even privatising the provision of care for the elderly by turning Medicare into a voucher system, the Republican ticket is probably a sensible investment for the super rich.
But how have the Democrats managed to compete, when those on low and middle incomes are struggling, the unions arguably have little clout, and Hollywood stars are promoting their own causes rather than unequivocally backing hope and change? Furthermore, while the banking sector split fairly evenly between Obama and McCain in 2008, they have overwhelmingly gone for Romney this time, with Goldman Sachs the most notable switcher.
The Obama campaign will tell you that they make this gap up with smaller donations. This is partially true – they have raised over $300 million in individual donations of $200 or less, over three times the amount raised by Romney in the same category. However this doesn’t tell the whole story, they are still reliant on large individual donations, especially in the wake of the 2010 Citizens’ United ruling which allows individuals to make uncapped donations to groups technically unaffiliated to campaigns.
This is where the tech industry comes in. Microsoft, Google, IBM and Apple are among Obama’s top donors. Individuals such as Craigslist founder Craig Newmark and Facebook COO Sheryl Sandberg have also given maximum donations to the Obama campaign. While the Republicans have made some progress in Silicon Valley, Obama still carries a healthy lead. On the Super PAC front, we find a huge single donation from Jim Simons, whose Renaissance Technologies has invested heavily in the tech industry.
What is it that makes Democrats and tech industry leaders such comfortable bedfellows? One explanation is simply demographics. The tech industry is full of young, well-educated men and women, and the younger and better educated you are, the more likely you are to vote Democrat.
There is more to it than this, however. On a number of issues, Obama’s agenda appears more likely to help the sector to thrive than Romney’s. Firstly let’s look at immigration. The tech industry, unlike many other areas, faces a shortage of Americans with the right training, and thus needs to be able to look abroad. While legal immigration is perhaps the one issue where America’s conservatives are by-and-large more moderate than ours in Britain, Obama’s support for the DREAM Act, among other measures, has probably proven his pro-immigration credentials to the tech industry.
He has also shown himself to be the tech industry’s friend in a number of other key policy areas. He has opposed antipiracy bills that might have compromised internet freedom, and unlike Romney he supports federal funding for the university labs that created the microprocessor and the world-wide web.
Finally on education, there is good reason for the tech industry to support Obama’s agenda. The sector’s success relies upon the availability of skilled workers. If public school funding is cut, and university made even less affordable, the tech industry suffers disproportionately.
For both demographic and pragmatic reasons, the tech industry has aligned itself to Obama and the Democrats; it has invested heavily to politicise itself in the billion dollar election. Whether it pays off or not this time round could decide whether this alliance strengthens in the medium-term, or whether next time the industry spreads its bets more evenly.