Silicon Valley Becomes Rent Seeking Valley Under Obama
During President Obama’s recent visit to North Carolina, ATR highlighted how his policies adversely impact small businesses in the Tar Heel State. Today the POTUS travels to Silicon Valley, where his economic agenda has had an equally deleterious effect on a region renowned globally as a hub of ingenuity and innovation. A Wall Street Journal article from last November highlights how President Obama’s command and control energy policies, in addition to his obsession with “green jobs” is having the effect of transforming Silicon Valley into place populated by companies whose business models rely on taxpayer subsidies, government mandates that consumers buy their product, or both:
“In the past, Kleiner Perkins funded scores of vital ventures, from Apple and Applied Materials to Amazon and Google. But now Kleiner is moving on to such government- dependent firms as Miasole, Amyris Biofuels, Segway and Upwind Solutions. Many have ingenious technology and employ thousands of brilliant engineers, but they are mostly wasted on pork catchers.
Other venturers plunged into solar panel manufacturer Solyndra, which received some $500 million in federal subsidies and a campaign visit from Barack Obama before laying off 17% of its work force and giving up on a new factory that was supposed to create 1,000 green jobs
Many of these green companies, behaving like the public-service unions they resemble…Virtually every new venture investment proposal harbors a 'green' angle that turns it from a potential economic asset into a government dependent....the green campaign wastes scarce and precious technological and entrepreneurial resources indispensable to the nation's future.”
While Obama’s energy policies are turning Silicon Valley into a hub of government-dependent, rent seeking start-ups, the onerous tax and regulatory burden imposed by the Democratic-controlled California legislature is making the valley a less attractive place to start a company and create jobs. Don’t take it from me; take it from Scott McNealy, co-founder and former CEO of Sun Microsystems:
“I see a migration from the early days of the Valley. We aren't doing manufacturing; we aren't doing design; we aren't doing computers. It's all moving to Asia and other places where there are lots of technical engineers who are willing to work at a more reasonable salary because they don't have to spend $3.5 million on a home and pay half of it to taxes.
I think every new transition has created less job opportunity as technology has become very leveraged. I don't think our education system, our regulations, our government policies have kept pace with the changes that technology is driving…It's not the Valley. It's the overhead and the overhang, the clouds brought in by Sacramento and Washington, D.C., the regulations, the deficit and the misallocation of resources. It's all of those things. Obviously, I'm a believer in the private sector and in personal responsibility.
The biggest issues with the Valley are local, state and federal governmental overreach and overregulation. It's over-pensioned, over-unionized and over the top.”