#  Trump Screwed Up Democracy, Silicon Valley Will Finish the Job

     Details    Joel Kotkin   ![logo](https://mail.citywatchla.com//templates/ja_teline_v/images/logo.png)         August 28 2017      [  ![](https://mail.citywatchla.com/images/stories/Aug-2017/069z3.png)    ](https://mail.citywatchla.com/los-angeles/13886-trump-screwed-up-democracy-silicon-valley-will-finish-the-job)

  [LOS ANGELES](https://mail.citywatchla.com/los-angeles)   - [  Previous Article **The Usual Anti-Transit Suspects: Still Wrong ... But Not ALL Wrong** ](https://mail.citywatchla.com/index.php?option=com_content&view=article&id=13888:the-usual-anti-transit-suspects-still-wrong-but-not-all-wrong&catid=312)
- [  Next Article **All Thoughts Not Golden … There is LA Angst Over the Olympics** ](https://mail.citywatchla.com/index.php?option=com_content&view=article&id=13879:all-thoughts-not-golden-there-is-la-angst-over-the-olympics&catid=312)

  ###### Typography

- [](# "Smaller Font")  ****Smaller** **Small** **Medium** **Big** **Bigger****  [](# "Bigger Font")
- [](# "Previous Font Style")  ****Default** **Helvetica** **Segoe** **Georgia** **Times****  [](# "Next Font Style")

- [ Reading Mode](# "Reading Mode")

> <a class="a2a_button_facebook"></a><a class="a2a_button_twitter"></a><a class="a2a_button_email"></a><a class="a2a_button_print"></a>[](https://www.addtoany.com/share)
>
>  [Comments](#disqus_thread)

>
>
>
> NEW GEOGRAPHY--When Democrats made their post-election populist [“Better Deal”](http://www.thedailybeast.com/how-democrats-can-take-back-middle-america) pitch, they took a strong stance against pharmaceutical and financial [monopolies](https://www.yahoo.com/finance/news/democrats-aim-big-companies-economic-blueprint-101356313--sector.html). But they conspicuously left out the most profound antitrust challenge of our time—[the tech oligarchy](http://www.thedailybeast.com/todays-tech-oligarchs-are-worse-than-the-robber-barons).

 The information sector, notes [*The Economist*](https://www.economist.com/news/briefing/21695385-profits-are-too-high-america-needs-giant-dose-competition-too-much-good-thing), is now the most consolidated sector of the American economy.

The Silicon Valley and its Puget Sound annex dominated by Google, Apple, Facebook, Amazon, and Microsoft increasingly resemble the pre-gas crisis Detroit of the Big Three. Tech’s Big Five all enjoy overwhelming market shares—for example [Google](https://www.wsj.com/articles/neutrality-for-thee-but-not-for-google-facebook-and-amazon-1500591612) controls upwards of 80 percent of global search—and the capital to either acquire or crush any newcomers. They are bringing us a hardly gilded age of prosperity but depressed competition, economic stagnation, and, increasingly, a chilling desire to control the national conversation.

Jeff Bezos harrumphs through his chosen megaphone, *The Washington Post*, about how “democracy dies in the dark.” But if Bezos—the world’s [third richest man](https://www.google.com/#q=forbes+richest+2017), who used the *Post* first to [undermine](http://fair.org/home/washington-post-ran-16-negative-stories-on-bernie-sanders-in-16-hours/comment-page-1/) Bernie Sanders and then to wage ceaseless war on the admittedly heinous Donald Trump—really wants to identify the biggest long-term threat to individual and community autonomy, he should turn on the lights and look in the mirror.

Trump’s election and volatile presidency may pose a more immediate menace, but when he is gone, or neutered by lack of support, the oligarchs’ damage to our democracy and culture will continue to metastasize.

**Killing the Old Silicon Valley**

Americans justifiably take pride in the creative and entrepreneurial genius of Silicon Valley. The tech sector has been, along with culture, agriculture, and energy, one of our most competitive industries, one defined by risk-taking and intense competition between firms in the Valley, and elsewhere.

This old model is fading. All but shielded from antitrust laws, the new Silicon Valley is losing its entrepreneurial yeastiness—which, ironically enough, was in part [spawned](http://www.businessinsider.com/the-evidence-is-piling-up-silicon-valley-is-being-destroyed-2017-4) by government efforts against old-line monopolists such as ATT and IBM.

While the industry still promotes the myth of the stalwart tinkerers in their garages seeking to build the next great company, the model now is to get funding so that their company can [be acquired](https://www.wsj.com/articles/the-new-copycats-how-facebook-squashes-competition-from-startups-1502293444) by Facebook or one of the other titans.

As one recent paper demonstrates, these “super platforms” depress competition, squeeze suppliers and reduce opportunities for potential rivals, much as the monopolists of the late 19th century did ([PDF](https://www.competitionpolicyinternational.com/wp-content/uploads/2017/05/CPI-Stucke-Ezrachi.pdf)). The rush toward [artificial intelligence](https://www.wsj.com/articles/can-the-tech-giants-be-stopped-1500057243), requiring vast reservoirs of both money and talent, may accelerate this consolidation. A few firms may join the oligarchy over time, such as Tesla or Uber, but these are all controlled by [the same investors](http://fortune.com/2014/03/20/silicon-valleys-single-degree-of-separation/) on the current Big Five.

This new hierarchy is narrowing the path to riches, or even the middle class. Rather than expand opportunity, the Valley increasingly creates jobs in the “gig economy” that promises not a way to the middle class, much less riches, but into the rising [precariat](https://workingclassstudies.wordpress.com/2014/10/27/the-precariat-the-new-dangerous-class/)—part-time, conditional workers. This emerging “gig economy” will likely expand with the digitization of retail, which could cost [millions](http://www.marketwatch.com/story/amazon-is-going-to-kill-more-american-jobs-than-china-did-2017-01-19) of working-class jobs.

For most Americans, the once promising “New Economy,” has meant a descent, [as MIT's Peter Temin recently put it](http://news.mit.edu/2017/america-economy-decline-middle-class-0313), toward a precarious position usually associated with developing nations. Workers in the “gig economy,” unlike the old middle- and working-class, have little chance, for example, of [buying a house](http://www.newgeography.com/content/005605-fading-promise-millennials-prospects-golden-state)—once a sure sign of upward mobility, something that is depressingly evident in the Bay Area, along the California coast, and parts of the Northeast.

Certainly the chances of striking out on one’s own have diminished. [Sergei Brin](http://www.businessinsider.com/sergey-brin-on-starting-a-company-in-silicon-valley-2016-6), Google’s co-founder, recently suggested that startups would be better off moving from Silicon Valley to areas that are less expensive and highly regulated, and where the competition for talent is not dominated by a few behemoths who can gobble up potential competitors—[Instagram](http://www.businessinsider.com/its-been-1-year-since-facebook-bought-instagram-for-1-billion-heres-how-co-founder-kevin-systrom-spent-it-2013-5), WhatsApp, Skype, LinkedIn, [Oculus](http://www.ocregister.com/2015/01/28/oculus-moves-out-irvine-vr-goggles-maker-moves-hq-to-menlo-park-closer-to-parent-facebook/)—or slowly crush them, as may be happening to [Snap](http://online.wsj.com/public/resources/documents/print/WSJ_-B001-20170811.pdf), a firm that followed the old model and refused to be swallowed by Facebook but went through with its own public offering. Now the Los Angeles-based company is under assault by the social media giant which is using technologies at its Instagram unit, itself an acquisition, that duplicate Snap’s trademark technologies and features.

Snap’s problems are not an isolated case. The result is that the number of [high-tech startups](https://www.technologyreview.com/s/601497/why-startups-are-struggling/) is down by [almost half](http://www.businessinsider.com/silicon-valley-startup-funding-2017-4) from just two years ago; overall National Venture Capital Association reports that [the number of deals](http://wolfstreet.com/2017/04/06/startup-vc-funding-deflates-silicon-valley-san-francisco/) is now at the lowest level since 2010. Outsiders, the supposed lifeblood of entrepreneurial development, are increasingly irrelevant in an increasingly closed system.

**The New Hierarchy**

For all its talk about “disruption,” Silicon Valley is increasingly about three things: money, hierarchy, and conformity. Tech entrepreneurs long have enjoyed financial success, but their dominance in the ranks of the ultra-rich has never been so profound. They now [account for](https://www.forbes.com/billionaires/list/#version:static) three of world’s five richest people—Bill Gates, Jeff Bezos, and Mark Zuckerberg—and dominate the [list of billionaires ](https://www.forbes.com/video/4516433936001/%20%20)[under](http://www.forbes.com/video/4516433936001/%20%20) 40.

Unlike their often ruthless and unpleasant 20th century moguls, the Silicon Valley elite has done relatively little for the country’s [lagging productivity](https://hbr.org/2016/02/is-technology-really-helping-us-get-more-done) or to create broad-based opportunity. The information sector has overall been a [poor source](http://www.newgeography.com/content/005283-the-cruel-information-economy-the-us-cities-winning-in-this-critical-sector) of new jobs—roughly 70,000 since 2010—with the gains concentrated in just a few places. This as the number of generally more middle-class jobs tied to producing [equipment](https://www.wsj.com/articles/americas-dazzling-tech-boom-has-a-downside-not-enough-jobs-1476282355) has fallen by half since 1990 and most new employment opportunities have been in [low-wage sectors](https://www.bls.gov/emp/ep_table_104.htm) like hospitality, medical care, and food preparation.

The rich, that is, have gotten richer, in part by taking pains to minimize their tax exposure. Now they are talking grandly about having the government provide all the now “excess” humans with a guaranteed minimum income. The titans who have shared or spread so little of their own wealth are increasingly united in the idea that the government—i.e., middle-class taxpayers—should spread more around.

Not at all coincidentally, the Bay Area itself—once a fertile place of grassroots and middle-class opportunity—now boasts an increasingly bifurcated economy. San Francisco, the Valley’s northern annex, regularly clocks in as among [the most unequal cities](https://www.brookings.edu/research/some-cities-are-still-more-unequal-than-others-an-update/) in the country, with both extraordinary wealth and a [vast homeless population](http://www.sfchronicle.com/bayarea/article/Despite-money-and-work-homelessness-in-SF-as-bad-11242946.php).

The more suburban Silicon Valley now suffers a [poverty rate](http://www.newgeography.com/content/005501-the-demographics-poverty-santa-clara-county) of near 20 percent, above the national average. It also has its own large homeless population living in what [KQED](https://ww2.kqed.org/news/2016/06/29/homelessness-more-complex-since-san-jose-shut-down-the-jungle/) has described as “modern nomadic villages.” In recent years income gains in the region have flowed overwhelmingly to the top quintile of income-earners, who have seen their wages increase by over 25 percent since 1989, while income levels have declined for low-income households.

Despite endless prattling about diversity, African Americans and Hispanics who make up roughly one-third of the valley’s population, have [barely 5 percent](http://www.usatoday.com/story/tech/2014/10/12/silicon-valley-diversity-tech-hiring-computer-science-graduates-african-american-hispanic/14684211/) of jobs in the top Silicon Valley firms. Between 2009 and 2011, earnings dropped 18 percent for blacks in the Valley and by 5 percent for Latinos, according to a 2013 Joint Venture Silicon Valley report ([PDF](https://www.siliconvalleycf.org/sites/default/files/publications/2014-silicon-valley-index.pdf)).

Similarly the [share](http://www.techrepublic.com/article/the-state-of-women-in-technology-15-data-points-you-should-know/) of women in the tech industry is barely half of their 47 percent share in the total workforce, and their ranks may even be [shrinking](http://fortune.com/2015/03/26/report-the-number-of-women-entering-computing-took-a-nosedive/). Stanford researcher Vivek Wadhwa [describes](http://venturebeat.com/2015/02/23/why-i-am-stepping-out-of-the-debate-on-women-in-technology/) the Valley still as “a boys’ club that regarded women as less capable than men and subjected them to negative stereotypes and abuse.”

While the industry hasn’t done much to actually employ women or minorities, it’s both self-righteously and opportunistically fed the outrage industry by booting right-wing voices from various platforms and pushing out people like [former Google staffer James Damore](http://www.thedailybeast.com/google-fires-author-of-anti-woman-memo), and before that Mozilla founder Brendan Eich after he made a small contribution to a 2014 measure banning gay marriage. Skepticism, once the benchmark of technology development, is now increasingly unwelcome in much of the Valley.

This marks a distinct change from the ’80s and ’90s, when the tech companies—then still involved in the manufacturing of physical products in the United States—tended toward libertarian political views. As late as the 1980s, moderate Republicans frequently won elections in places like San Mateo and Santa Clara. Now the area has evolved into one of the most one-sidedly [progressive bastions](http://www.ppic.org/publication/californias-political-geography/) in the nation. Over 70 percent of Bay Area residents are Democrats up from 55 percent in the 1970s. Today, the [Calexit backers](http://www.westernjournalism.com/supporter-of-california-secession-movement-our-values-are-different-than-the-united-states/), many based in the Valley, even think that the country is too dunderheaded, and suggest they represent “different,” and morally superior, values than the rest of the country.

**The Danger to Democracy**

If these were policies adopted by an ice-cream chain, or a machine-tool maker, they might be annoying. But in the tech giants, with their vast and growing power to shape opinion, represent an existential threat. Mark Zuckerberg whose Facebook is now the largest source of media for younger people, has emerged, in the words of one European journalist ([PDF](https://s3-us-west-1.amazonaws.com/onlinecensorship/posts/pdfs/000/000/088/original/Censorship_in_Context_November_2016.pdf?2016)), as “‘the world’s most powerful editor.” In the past they were the primary carriers of “fake news,” and have done as much as any institution to erode the old values (and economics) of journalism.

Both [Facebook](https://www.city-journal.org/html/share-beware-14801.html) and Google now offer news “curated” by algorithms. Bans are increasingly used by Facebook and [Twitter](https://www.pastemagazine.com/articles/2016/09/censorship-is-killing-the-spirit-of-social-media.html) to keep out unpopular or incendiary views, and especially in the echo chamber of the Bay Area. This is sometimes directed at conservatives, such as Prager University, whose content may be offensive to some, but hardly subversive or “fake.” The real crime now is simply to question dominant ideology of [Silicon Valley](http://www.zerohedge.com/news/2017-03-27/twitter-now-censoring-drudge-report) gentry progressivism.

Even at their most powerful the industrial age moguls could not control what people knew. They might back a newspaper, or later a radio or television station, but never secured absolute control of media. Competing interests still tussled in a highly regionalized and diverse media market. In contrast the digital universe, dominated by a handful of players located in just a few locales, threaten to make a pluralism of opinions a thing of the past. The former Google design ethicist [Tristan Harris](https://www.nytimes.com/2017/08/12/opinion/sunday/google-tech-diversity-memo.html?_r=0) suggests that “a handful of tech leaders at Google and Facebook have built the most pervasive, centralized systems for steering human attention that has ever existed.”

Ultimately, particularly after the disasters associated with the Trump regime, the oligarchs seem certain to expand their efforts to control the one institution which could challenge their hegemony: government. Once seen as politically marginal, the oligarchs achieved a dominated role in the Democratic Party, in part by [financing](https://www.opensecrets.org/pres08/contrib.php?cid=n00009638) President Obama and later support for Hillary Clinton. In the Obama years [Google operatives](https://www.wsj.com/articles/google-makes-most-of-close-ties-to-white-house-1427242076) were in fact fairly ubiquitous, leading at least [one magazine](https://theintercept.com/2016/04/22/googles-remarkably-close-relationship-with-the-obama-white-house-in-two-charts/) to label it “the Android Administration.” Since then a [stream of Obama people](http://money.cnn.com/2016/08/11/technology/obama-staff-silicon-valley/index.html) have headed to Silicon Valley, working for [firms](http://money.cnn.com/2016/08/11/technology/obama-staff-silicon-valley/index.html) such as Apple, Uber, and Airbnb. Obama himself has even mused about becoming a venture capitalist himself.

Of course with Trump in power, the oligarchs are mostly on the outs, although the twitterer in chief tried to recruit them. Now many of Silicon Valley power players are supporting the “resistance” and lending their expertise to Democratic campaigns. Unlike undocumented immigrants or other victims of Trumpism, they can count on many GOP politicians to watch their flank until the lunatic storm recedes.

In a future Democratic administration, as is already evident in places like California, the tech titans will use their money, savvy, and new dominance over our communications channels to steer and even dictate America’s political and cultural agendas to wield power in ways that even the likes of J.P. Morgan or John D. Rockefeller would envy.

What started as a brilliant, and profoundly non-political extension of the information revolution, notes early Google and Facebook investor [Robert McNamee](https://www.usatoday.com/story/opinion/2017/08/08/my-google-and-facebook-investments-made-fortune-but-now-they-menace/543755001/), now looms as “a menace,” part of a systematic “brain hacking” on a massive scale. We can choose to confront this reality—as the early 20th century progressives did—or stand aside and let the oligarchs chart our future without imposing any curbs on their seemingly inexorable hegemony.

*(Joel Kotkin is the R.C. Hobbs Presidential Fellow in Urban Futures at Chapman University in Orange and executive director of the Houston-based* [*Center for Opportunity Urbanism*](http://www.opportunityurbanism.org)*. Wendell Cox is principal of Demographia, a St. Louis-based public policy firm, and was appointed to three terms on the Los Angeles County Transportation Commission. This piece appeared on* [NewGeography.com](http://www.newgeography.com/content/005714-california-s-coming-youth-deficit)*.)*

*-cw*

  - [  Previous Article **The Usual Anti-Transit Suspects: Still Wrong ... But Not ALL Wrong** ](https://mail.citywatchla.com/index.php?option=com_content&view=article&id=13888:the-usual-anti-transit-suspects-still-wrong-but-not-all-wrong&catid=312)
- [  Next Article **All Thoughts Not Golden … There is LA Angst Over the Olympics** ](https://mail.citywatchla.com/index.php?option=com_content&view=article&id=13879:all-thoughts-not-golden-there-is-la-angst-over-the-olympics&catid=312)
<div data-id="1" 
	class="eb-inst eb-hide eb-emailform eb-1 eboxContentLocker"
	data-options='{"trigger":"onPageLoad","trigger_selector":"","delay":3000,"early_trigger":true,"scroll_depth":"percentage","scroll_depth_value":80,"firing_frequency":1,"reverse_scroll_close":true,"threshold":0,"close_out_viewport":false,"exit_timer":1000,"idle_time":10000,"close_on_esc":false,"animation_open":"slideInDown","animation_close":"fadeOutDown","animation_duration":400,"disable_page_scroll":true,"test_mode":false,"debug":false,"ga_tracking":true,"ga_tracking_id":"G-P16BQ7X1SW","ga_tracking_event_category":"EngageBox","ga_tracking_event_label":"Box #1 - Global Email Signup Form","auto_focus":false}'
	data-type='popup'
	>

	<button type="button" data-ebox-cmd="close" class="eb-close placement-outside" aria-label="Close">
	<img alt="close popup button" />
	<span aria-hidden="true">&times;</span>
</button>
	<div class="eb-dialog eb-formVer" role="dialog" aria-modal="true" id="dialog1" aria-label="dialog1">
		
		<button type="button" data-ebox-cmd="close" class="eb-close placement-inside" aria-label="Close">
	<img alt="close popup button" />
	<span aria-hidden="true">&times;</span>
</button>	
		<div class="eb-container">
						<div class="eb-content">
				
<form action="https://citywatchla.us2.list-manage.com/subscribe/post?u=34d69f33624fd058ee9b56516&amp;id=4bfa422f51&amp;f_id=00d6c2e1f0" class="eb" method="post" id="mcform-1" name="mcform-1" target="_blank">
			<div class="eb-form-header"><p><img src="/images/2023/06/be-a-city-watcher.png" alt="be a city watcher" width="350" height="97" loading="lazy" data-path="local-images:/2023/06/be-a-city-watcher.png"></p>
<p>Sign up to receive our special e-news blasts on Monday and Thursday evenings!</p></div>
	
					<div class="eb-field-row">

			
			
			
			<input class="eb-input" type="email" name="EMAIL"  placeholder="Email address"  id="EMAIL" value="" required>

			
		</div>
										
	<div class="eb-footer">
    	<button class="eb-btn" type="submit" name="subscribe" style="background-color:rgba(93, 183, 93, 1);color:rgba(255, 255, 255, 1)">
    		Sign up    	</button>
    </div>
</form>			</div>
		</div>
	</div>	
</div>
<div data-id="3" 
	class="eb-inst eb-hide eb-yesno eb-3 "
	data-options='{"trigger":"onScrollDepth","trigger_selector":"","delay":0,"early_trigger":false,"scroll_depth":"percentage","scroll_depth_value":80,"firing_frequency":2,"reverse_scroll_close":false,"threshold":0,"close_out_viewport":false,"exit_timer":1000,"idle_time":1000,"close_on_esc":false,"animation_open":"fadeInUp","animation_close":"fadeOut","animation_duration":300,"disable_page_scroll":false,"test_mode":false,"debug":false,"ga_tracking":true,"ga_tracking_id":"G-P16BQ7X1SW","ga_tracking_event_category":"EngageBox","ga_tracking_event_label":"Box #3 - Yes \/ No Donation Popup Box","auto_focus":false}'
	data-type='popup'
	>

	<button type="button" data-ebox-cmd="close" class="eb-close placement-outside" aria-label="Close">
	<img alt="close popup button" />
	<span aria-hidden="true">&times;</span>
</button>
	<div class="eb-dialog " role="dialog" aria-modal="true" id="dialog3" aria-label="dialog3">
		
		<button type="button" data-ebox-cmd="close" class="eb-close placement-inside" aria-label="Close">
	<img alt="close popup button" />
	<span aria-hidden="true">&times;</span>
</button>	
		<div class="eb-container">
						<div class="eb-content">
				
<div class="ebox-yes-no">
	<div class="ebox-yn-text">
		
		
		<div class="ebox-yn-headline" style="font-size:22px;color:#888888">
			<p>If you only give once a month, would you consider giving to CityWatch?</p>
<p>Your support fuels our mission to promote and facilitate civic engagement and neighborhood empowerment, and to hold area government and its politicians accountable.</p>
<p>Would you like to help? Even if you can only give $5, it will make a difference.</p>		</div>
			</div>
	
	<div class="ebox-ys-buttons" style="font-size: 16px;">
		
<a
					data-ebox-prevent="0"
		data-ebox-cmd="close"
				target="_self"
		href="https://www.citywatchla.com/donate"
		rel="noopener"
	
	
	
	
	class="ebox-ys-btn"
	style="background-color:#2ec664;color:#ffffff;min-width:100px">
	Yes
	</a>
<a
	
	
			data-ebox-cmd="close"
		href="#"
	
	
	class="ebox-ys-btn"
	style="background-color:#ef2345;color:#ffffff;min-width:100px">
	Not Right Now
	</a>	</div>

	</div>			</div>
		</div>
	</div>	
</div>