An industry’s takeover of politics tends to be defensive.
It happens when that industry seems to be riding high. It acts against leaders whom neutral observers may credit with that rise.
I covered this story 40 years ago. In Houston.
The oil industry did great in 1979, despite Jimmy Carter’s cardigan sweater. Saudi Arabia, more Texas’ ally than America’s, had proven the economic power of resources with its 1973 embargo. Iranian mullahs believed they could use the same economic force against America. Oil understood this as a threat to its interests. Carter saw oil’s profits as leverage he could use against the Iranians.
In Houston, where I was writing for the Houston Business Journal, oilmen were seething. With money coming out of the ground, the last thing they wanted was interference, from either Washington or Teheran. The 1978 “Sagebrush Rebellion” had proven that the oil interests, with their control over land that gushed money, could overthrow agriculture, which had made the Farm Belt Democratic for a generation.
This sort of thing was also happening under the surface in 1939, although the players were different. Manufacturers were on the rise and were pushed to allow unions under Franklin Roosevelt. They accepted FDR to get the orders that would flow from his defense build-up. It happened in 1903, as utilities realized that scale required organized access to capital, and they made peace with progressives. It happened in 1867, as the railroad industry took control of the Republican Party and turned it away from Reconstruction.
This is just the way American politics works. Follow the money and you’ll see the future.
Today the money is with technology. The Cloud Czars are more profitable, riding higher, than ever before. Their takeover of the global economy is complete. Five companies have a market cap of $4.5 trillion. Behind them are dozens of “smaller” companies worth trillions more. These include cloud landlords like Equinix, cloud users like Salesforce.com, and cloud suppliers like Nvidia.
Yet the government in Washington stands against their interests. While Amazon.Com is focused on 2021, Trump is trying to replay the 1979 Game. He thinks that if he does what oil wanted done then, he can create a self-perpetuating autocracy that will make technology irrelevant. Besides, he figures, they’re making money, why should they care?
Tech cares because it understands the concept of gating factors. In 1979, resources were the gating factor to economic growth. Control over money coming out of the ground meant economic and political power.
In 2019, human minds are the gating factor to growth. The more trained, enthusiastic, empowered people your company or country has, the more wealth it can create. It’s not a zero-sum game. It’s a game everyone can win.
Money doesn’t come out of the ground. It rains from the clouds, when theories scale into practice. In this decade we’ve proven that we can create electricity for less than it costs to drill and burn. We’re also seeing how the drilling, the burning, and all the industries accompanying it threatens humanity itself.
Who represents our tech sectors? Democrats. Not just Democrats, liberal Democrats. Tech lives primarily in San Francisco, Seattle, Boston and New York. Republicans are nearly extinct in all these places. Even in Texas, where Republicans still dominate, urban centers are solidly Democratic. Those views are now expanding into suburbs and even exurbs, where people who made their money in town now spend it on what they see as the good life.
Let me get into the weeds here and give you an example of what I’m talking about.
Consider Texas’ 21st Congressional District. It comprises what Texans call the “Hill Country,” running west from Austin and south almost to San Antonio.
In the 1930s this was Lyndon Johnson’s district, filled with poor farmers and ranchers desperate for the electric current Washington had the capital to provide. In the 1980s this became Reagan country, where oilmen pretended to be cattle barons. Now tech money is filtering in, from Austin and San Antonio. The people who’ve made it are buying up the cattle lands. They’re more interested in the future of Dell and Apple than in Exxon and Halliburton.
So it is that Wendy Davis, last seen as a Ft. Worth state senator challenging Republican dominance of state government, is running to represent the 21st CD in Congress. She moved to Austin after her 2014 loss to current incumbent Greg Abbott. She’ll challenge Chip Roy, who rose to power working for Rick Perry and Ted Cruz. Roy is a freshman who barely won his race, 50-48, in what was (for Texas) a Democratic wave. Look at his Twitter feed. He’s all in for Trump.
Forget the issues. Follow the money. This is a race Davis can win.
That’s what we need to do when looking at 2020. Look at what the tech industry needs to keep growing. They need brains.
They don’t care where the brains were born, or their color, or their physical condition. They don’t care who these brains love, or which sex they identify as. They’re also not just looking for programmers. They need business heads, writers, creatives of all types, the people Richard Florida 20 years ago called The Creative Class.
An example of just how big a disaster oil can be in power is playing out right now in Alaska. Alaska’s Republican governor Mike Dunleavy thinks the $3,000 in cash dividends Alaskans are getting from oil today are more important than his universities. That’s why he has cut their budget by 40%, to protect the payout. Besides, driving out some “liberal” professors and students should help Republicans take back the power they’ve been losing in the legislature, where Democrats have slowly taken control. It’s a classic battle of the past vs. the future.
The people speaking against tech in the Democratic Party are speaking against the industry leaders, the Cloud Czars. They’re not going after research and learning. They know that universities, whether in the tech centers, second-tier cities, or even in the boondocks like College Station, provide their raw material. Programming the cloud to provide health and environmental breakthroughs is how we’ll save the planet and give young people a future. That’s where tech’s money and votes will go in 2020.
Yet against all this evidence “pundits” predict a close election. Many enjoy predicting a Trump victory with a voting minority just to own the libs. Pundits of the time also thought Ronald Reagan would be an easy mark against the Jimmy Carter machine.
Let them. You follow the money and place your bets accordingly. Trump and oil are going down. Democrats and technology are where America’s future lies. Once it’s obvious the chattering classes are going to claim they saw it coming all along.
They didn’t. But by reading this column, you will.
