by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Silicon Valley is an American success story. At a time of supposed American decline, a gifted group of young entrepreneurs invented, merchandized, and institutionalized everything from smartphones and eBay to Google and Facebook. The collective genius within a small corridor from San Francisco to Stanford University somehow put hand-held electronics into over a billion households worldwide — and hundreds of billions of dollars in profits rolled into Northern California, and America at large.
Stranger yet, Silicon Valley excelled at 1950s-style profit-driven capitalism while projecting the image of hip and cool. The result is a bizarre 21st-century 1-percenter culture of $1,000-a-square-foot homes, $100,000 BMWs, and $500 loafers coexisting with left-wing politics and trendy pop culture. Silicon Valley valiantly tries to square the circle of driving a Mercedes or flying in a Gulfstream while lambasting those who produce its fuel.
But the paradox finally has reached its logically absurd end. In medieval times, rich sinners sought to save their souls by buying indulgences to wash away their sins. In the updated version, Silicon Valley crony capitalists and wheeler-dealers buy exemption for their conspicuous consumption with loud manifestations of cool left-wing politics.
Take the cutthroat capitalism President Obama blasts when he goes after firms that outsource jobs and offshore profits. These are the sorts of excessive money-making gambits that the president was railing against when he told the successful that they did not really build their own businesses, or that they should have known to quit once they had made enough money.
Apple, Google, and Cisco, to take just a few examples, are among the worst offenders of all U.S. companies in using legal loopholes to offshore their profits in order to reduce their state and U.S. income taxes. In fact, tax-dodging tech firms have offshored almost $1 trillion in profits — at a time when the strapped tax-and-spend state government in Sacramento that they so overwhelmingly support has piled up billions in long-term debt. Oddly, Obama has never called in any Silicon Valley CEOs to jawbone them about the practice that shorts the state and federal treasuries. Apparently, the administration associates greed with coat-and-tie-wearing CEOs in smokestack industries, not hipsters in sockless loafers.