December 20, 2016

The President Elect Greets the Lords of Tech: Welcome to Trump Tower

Press coverage of Donald Trump's meeting with the titans of Silicon Valley and Seattle last Wednesday tended to focus on the event's surprising cordiality. Given the mutual enmity expressed during the campaign, expectations were that the gathering would be chilly, if not openly hostile, but that isn't how it turned out. Trump went out of his way to express his support for his guests — "Call me," he said, "I’m here to help" — while his erstwhile adversaries from the world of technology seemed guarded but respectful.

The fact that the meeting occurred at all was more significant than what took place there. It constituted an historic affirmation of the seismic political, economic, social and cultural shifts digital technologies have produced in a remarkably short period of time. Note that the President-elect has held no comparable meetings with leaders from the automobile industry, the United Nations or Wall Street, and certainly not with the major trade unions. What we witnessed on Wednesday was nothing less than a summit meeting between world powers.

As is often the case with summit meetings, the fact that the participants agreed to sit down together doesn't mean they've put their differences aside. The generally liberal sympathies of the West Coast contingent have caused them to (rightly) recoil from Trump's right-wing bluster even as the candidate threw contemptuous remarks their way. The tech leaders presumably showed up mainly because they didn't feel they had much choice. Trump will be President, after all, and it's clear he's not one who takes slights lightly.

For his part, Trump must have savored the fact that the digerati showed up because they had to. In what has become the real life version of The Apprentice, even the Masters of the Digital Universe know who's boss. Having proved that point, Trump could afford to be magnanimous, meanwhile enjoying the confirmatory pleasure of meeting on his own terms a group of individuals whose very presence affirmed his rightful place among  above — some of the world's most fabulously successful tycoons.

"This is an amazing group of people," Trump said in his opening remarks, immediately adding that there had been "hundreds of calls" from other tech leaders who asked to be invited. Peter Thiel, seated at Trump's side during the meeting, was in charge of selecting attendees, Trump said, and he rejected lesser players in favor of the "monster companies" who made the cut. He made it sound as if Thiel's role at Trump Tower was roughly equivalent to the doorman's at Studio 54.

What, then, does the Technology Summit tell us about future relations between the President and his fellow tycoons? Predicting what Trump will do once he takes office is a fool's game, of course. His positions are fluid, to say the least, suggesting he could dispense favor or heartache to anyone in any industry on any given day. Nonetheless, the achievement of business monstrosity he shares with his guests Wednesday suggests that Trump's policies in regard to Silicon Valley may not be nearly as punitive in practice as his campaign rhetoric implied. I don't think it matters that much to Trump that his path to fabulous success has been radically different from theirs. More than anything, Trump likes winners, and thus it seems likely that his instincts will discourage him from standing in the way of the Lords of Tech.

Here are four reasons why his administration is already tipping in their favor.

Peter Thiel
1. Peter Thiel's presence on Trump's transition team. Thiel's affinity for Bigness is affirmed not only by his guest list at the Technology Summit but also by the business philosophy engendered by having twice, with Pay Pal and Facebook, hit the tech jackpot. A 2014 opinion piece he wrote for the Wall Street Journal ran under the headline "Competition is for losers. If you want to create and capture lasting value, look to build a monopoly." The piece argued that only "creative monopolies" have the freedom and resources to invest in innovation, thereby making society better by adding "new categories of abundance to the world." The obsession of economists with competition, Thiel said, is "a relic of history." 

During the campaign Trump repeatedly singled out's Jeff Bezos for using the Washington Post, which Bezos owns, to attack Trump in order to protect Amazon's "monopoly" position. Bezos was a guest at the Technology Summit, but there was no indication that any talk of monopoly surfaced during the session. Alphabet's Larry Page and Eric Schmidt and Facebook's Sheryl Sandberg, who also attended, might have squirmed if it had.

Travis Kalanick
2. Trump's naming of Uber CEO Travis Kalanick to his Strategic and Policy Forum. Kalanick was invited to attend the Technology Summit but couldn't make it (he was busy solidifying Uber's expansion in India), but his business style certainly qualifies him for a place at the table. Like the President-elect, he has the reputation of being more interested in playing to win than in playing by the rules. On the same day as the summit, for example, Uber launched its experimental introduction of semi-automated cars in San Francisco, not bothering to apply for the permits California's Department of Motor Vehicles says are required. News reports noted that this was consistent with the aggressive strategies Uber has employed since its inception. As the New York Times put it, "For seven years, Uber’s stance on complying with regulations has been consistent: Ask forgiveness, not permission." It's an approach Donald Trump would almost certainly admire.

Similar charges have been leveled against Elon Musk, another appointee to the Trump's Strategic and Policy Forum and another guest at the Technology Summit. Musk has been accused of putting semi-automatic Tesla's on the road before their safety had been adequately tested, and of denying responsibility when one of those cars drove itself under a truck last May, killing its owner. 

Andy Puzder
3. Trump's nomination of Andy Puzder as Secretary of Labor. Puzder, CEO of the fast food chains Carl's Jr. and Hardees, is another executive known for an aggressive and unapologetic style — he's said he loved the ads showing bikini-clad women eating Carl's Jr.'s hamburgers. He's been an outspoken opponent of the Obama administration's initiative to raise the federal minimum wage, efforts he says convinced him that automation is the wave of the future. "With government driving up the cost of labor, it's driving down the number of jobs," he told Business Insider. "You're going to see automation not just in airports and grocery stores, but in restaurants."

Trump's announcement of Puzder's appointment stressed his "extensive record fighting for workers," but clearly that commitment has its limits. Puzder shared with Business Insider his dream of a chain of restaurants where "you never see a person." Comparing machines to human employees, he said, "They're always polite, they always upsell, they never take a vacation, they never show up late, there's never a slip-and-fall, or an age, sex, or race discrimination case."

The titans of Silicon Valley might reject such sentiments publicly, meanwhile working feverishly to develop the technologies that would make Puzder's dream come true.

Gary D. Cohn
4. The Goldman Sachs effect. Trump appointed Goldman's President and Chief Operating Officer, Gary D. Cohn, to be director of the National Economic Council. Steven Mnuchin, Trump's nomination for Secretary of the Treasury, and Stephen K. Bannon, his chief strategist and senior counselor, are both Goldman veterans. If the views of these men are in tune with those of their previous employer, the Trump administration will be bullish on technology.

Like other Wall Street firms, Goldman is certain that technological advance is the best hope for a flourishing economic future. The "Our Thinking" section of Goldman's web site features a section entitled "Technology Driving Innovation" where a series of reports confidently proclaim that technologies such as the Internet of things, virtual reality and artificial intelligence are opening a host of opportunities for the savvy investor. Potential downsides of these developments are seldom addressed.

Just last week, a Goldman Sachs infographic on the exciting potential of the drone industry was prominently displayed as a paid feature in the Washington Post. (Whether Goldman's drone report represented a conflict of interest with Jeff Bezo's substantial stake in the future of drones is one of the troubling issues raised by the increasing need of established journals to publish "branded content" in order to stay afloat in the digital age.) Titled "Drones: Reporting for Work," the report includes a section on the "growing capability set" of military drones, which have "long been used to keep pilots out of harm’s way while performing tasks like intelligence gathering or chemical detection.” More lethal applications of drone technology, including civilian casualties, aren't mentioned.

The report goes on to predict that government limitations on commercial drone use will soon be relaxed. “With the evolution of regulations," Goldman said, "we see drones headed for new heights in the business world…The $100 billion market opportunity we forecast over the next five years is just the tip of the of the iceberg." Good news, no doubt, not only for Jeff Bezos, but for other guests at Trump's Technology Summit who have drone ambitions of their own.

For the past eight years, Barack Obama has served as our unofficial Geek in Chief, an unflagging enthusiast for almost everything tech. At the same time, his administration has worked to find ways to sensibly regulate technologies that pose potential dangers to the economy and to public safety, even as Congress has sat on its hands. We should not expect that regulating technological development will be high on President Trump's agenda. His door will be open to high rollers, while the Lords of Tech are flush with cash and eager to place their bets.

 © Doug Hill, 2016

December 9, 2016

The Grand Tour

Right this way, my fellow Americans, to post-truth democracy. 

"Step right up, come on in, if you'd like to take the grand tour." 

                                                           George Jones

December 3, 2016

Body Snatchers Invade San Francisco

“I’ve lived in this city all my life and somehow today I felt everything had changed. People were different…It really became frightening. It was like the whole city had changed overnight.”
 Elizabeth in “Invasion of the Body Snatchers” (1978)