The Progressive War on Apple and Other High-Tech Companies

Over the past year, various Progressive scolds, acting as proxies for President Obama and the Democratic Party, have mounted a concerted attack against various high-tech companies in Silicon Valley, in particular, Apple. For example:

• Last August, avowed socialist Harold Meyerson attacked Apple for not creating more manufacturing jobs in America.
• Last November, CNN reporter Julianne Pepitone accused Apple and other Silicon Valley companies of not having diverse enough workforces, thereby implying that high-tech companies like Apple are racist.
• In January, New York Times reporters Charles Duhigg and Keith Bradsher attacked Apple for not employing enough American workers. Yesterday in the Times, Duhigg and David Kocieniewski excoriated Apple for not paying enough state and federal taxes.
• In January, Nobel prize winning economist Paul Krugman argued that jobs are not created by "heroic entrepreneurs" like Steve Jobs, but by actions like President Obama's bailing out of GM and Chrysler.

These attacks all have a common theme: although they are among the most profitable companies in the history of American business, high-tech companies like Apple are not "companies that make a large contribution to the nation’s economy" -- to use Krugman's dismissive phrase -- because they pursue business goals rather than social goals. So, for example, high-tech companies do not go out of their way to hire African-American or Hispanic workers to achieve the goal of racial diversity in their workforces. Nor do they go out of their way to preserve unionized American manufacturing jobs to achieve the goal of building a prosperous middle class in America. Instead, they focus solely on profit and do everything they can in order to avoid paying their fair share of taxes. Those CEO's who do not acknowledge their obligation to address social, as well as business, issues are engaging in "Social Darwinism," to use President Obama's phrase.

According to Meyerson:

Steve Jobs ... has abandoned nonprofessional American workers. It wasn’t always thus. In his first stint at Apple, in the mid-’80s, he built, with Jobsian attention to form and function, a heavily automated factory in Fremont, Calif., that employed hundreds of workers to turn out personal computers. But the Macs didn’t sell fast enough, Jobs was fired, and, in 1992, the factory was closed. ... [Apple now] employs no U.S.-based production workers. Which is why Jobs’s elevation to our national pantheon is premature. Bringing some of those production jobs home while holding down the price of his products probably would require devising factories so automated that they wouldn’t employ all that many workers. Then again, Apple is sitting on $76 billion in cash, and Jobs is still Apple’s chairman. Devoting a few billion to reshape and restart American manufacturing, even if it employs fewer people than in Henry Ford’s time and narrows Apple’s profit margins, could work wonders for exports and, just possibly, lead to Jobs’s most amazing invention of all: a newly vibrant American working-class.

According to Pepitone:

How diverse are Silicon Valley's offices and executive suites? Activists have been trying for years to answer that question, but some of the industry's largest and most influential employers -- including Apple, Google, Amazon and Facebook -- closely guard that information. ... Among American adults age 25 to 64 -- typically considered the working-age population -- around 11% are African-American, but black workers account for just 3.5% of Intel's domestic workforce and 1.3% of its top officials. Hispanics are similarly under-represented: They make up nearly 15% of the American workforce, but only 8% of Intel's workforce and 3% of its management ranks. In contrast, Asian workers -- a category that includes those of Indian descent -- have made strong inroads in the tech industry. They account for less than 5% of the U.S. working population but hold nearly 20% of the jobs at the companies CNNMoney surveyed.

According to Duhigg/Bradsher:

[T]he company’s decisions pose broader questions about what corporate America owes Americans as the global and national economies are increasingly intertwined. “Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, the chief economist at the Labor Department until last September. “That’s disappeared. Profits and efficiency have trumped generosity.”

And Duhigg/Kocieniewski write:

Apple ... has avoided millions of dollars in taxes in California and 20 other states.

According to Krugman:

[Republican Indiana governor Mitch Daniels] tried to wrap his party in the mantle of the late Steve Jobs, whom he portrayed as a great job creator — which is one thing that Jobs definitely wasn’t. And if we ask why Apple has created so few American jobs, we get an insight into what is wrong with the ideology dominating much of our politics.

Some of the claims of these Progressive voices are patently absurd. For example:

• Krugman writes "Prosperity depends on the synergy between companies, on the cluster, not the individual entrepreneur." According to Krugman, the "synergistic cluster" of American auto manufacturing companies was saved by President Obama's bailout. Apparently, the existence of the American automobile industry had nothing to do with the heroic actions of the American entrepreneur, Henry Ford. The greatest example of a synergistic cluster in the world is Silicon Valley. Does Mr Krugman not realize that this synergistic cluster exists only because of the risk taking of individual heroic entrepreneurs like Steve Jobs and Steve Wozniak? (Every once in a while Mr Krugman comes up with a real howler; for example, America should declare war on space aliens, not the Taliban; or, the shooting of Arizona Congresswoman Gabby Giffords was the result not of the actions of a demented lunatic, but of the climate of political hatred fomented by right-wing extremists. Krugman's claim that the efforts of entrepreneurs like Henry Ford and Steve Jobs had nothing to do with the creation of the auto or personal computer industries is just such another howler.)
• The idea that Silicon Valley is not diverse is utterly ludicrous. It is obvious that anyone making such a claim has not stepped onto the floor of the software development department of any Silicon Valley company. It is true, of course, that African-Americans and Hispanics are underrepresented on the engineering staffs of Silicon Valley companies, but it is just as true that Indian and Asian workers are vastly overrepresented in comparison to their distribution in the general population. It is unclear why Indian and Asian diversity should not count as "real diversity."
• Finally, the idea that Apple could move its electronic manufacturing operations back to the United States without suffering any adverse effects just doesn't make any sense. Apple employs entire teams of workers to figure out the most efficient, cost-effective way of manufacturing electronic devices. Apple executives would jump at the opportunity to manufacture electronic devices in the United States if it were actually cheaper to do so. No, the reason why Apple does its electronic manufacturing overseas is because it is demonstrably more cost effective to do it there.

It is high time that workers in Silicon Valley assess just how friendly the Progressive wing of the Democratic Party is to businesses in Silicon Valley and how ruinous the impact would be if Progressive policies were applied in Silicon Valley rigorously. To help Silicon Valley workers perform such an assessment, here is a set of questions for candidate Romney to pose to President Obama:

1. Does the President feel that Apple and other high-tech companies (and their employees and the recipients of their dividends) pay their fair share of taxes? Does the President believe that the fiscal mess California finds itself in is the result of high-tech companies in Silicon Valley not paying their fair share of taxes or is it instead the result of a dysfunctional California state legislature that has been dominated for decades by the Democratic Party, which has found itself unable to address key issues like reform of the pension system for public service employees?
2. Does the President feel that Apple should bring more manufacturing jobs back to America? Can the President explain why Solyndra, a high-tech company that received federal funds to establish a major manufacturing facility in Silicon Valley, went bankrupt?
3. Does the President feel that workers in Silicon Valley are diverse enough? Or does the President believe that Jesse Jackson and Al Sharpton ought to be invited to Silicon Valley to work with ("strong-arm" is the more appropriate term) CEO's of high-tech companies to establish racial quotas for African-Americans and Hispanics in the engineering workforces of these companies? Can the President explain why Asian and Indian diversity does not count as real diversity?
4. Does the President feel that more unionization ought to be promoted throughout the high-tech industry of Silicon Valley? Can the President explain how union rules and job banks would enhance, say, software development?
5. Does the President feel that Silicon Valley companies have a "dual mandate" to promote a social agenda as well as to pursue business goals? Why is it not enough that Silicon Valley through the actions of heroic entrepreneurs and venture capitalists (pace Krugman) has transformed what was once a sleepy farming community into the most vibrant "synergistic cluster" of economic activity in the nation, providing a livelihood for thousands of new working families and a steady stream of tax revenues without which the State of California could not survive?
6. In short, does the President feel that the economy of Detroit ought to be transplanted to California to replace the economy of Silicon Valley?