The high-tech industry gets very little from Obama's executive order on immigration

Reuters reports:

"This holiday season, the undocumented advocacy community got the equivalent of a new car, and the business community got a wine and cheese basket," complained one lobbyist, speaking on condition of anonymity.

Instead of more temporary H-1B visas, which allow non-U.S. citizens with advanced skills and degrees in "specialty occupations" to work in the country for up to six years, the 200,000-member U.S. chapter of the Institute of Electrical and Electronics Engineers was hoping for measures to reduce the backlog of H-1B holders awaiting green cards.

"If this is all there is, then the president has missed a real opportunity," said Russ Harrison, a senior legislative representative at the IEEE. "He could have taken steps to make it easier for skilled immigrants to become Americans through the green card system, protecting foreign workers and Americans in the process."

Thus, after supporting Obama so generously over the last several years, the high-tech industry got almost zero action from Mr Obama on modifications to immigration laws that high-tech firms wanted most desperately. If Mr Obama had done more to improve the pathways to work permits and citizenship for high-tech immigrants, the result would have been a large influx of highly-educated, highly-skilled, highly-paid Indian and Asian high-tech workers into the United States, the kind of workers who build and work in dynamic, high-tech businesses that generate profits for investors and tax revenues for the government.

Instead, Mr Obama's actions will create an incentive for millions of new low-skill, low-wage undocumented workers from Central America to flood into the US, workers who will likely consume far more social services (such as food stamps, Medicaid, and subsidized housing) than they will contribute in profits and tax revenues.

In sum, the Democrats have shown once again that they place the interests of other groups (in this case, the Hispanic lobby) ahead of the interests of high-tech, and at a significant cost to the American economy. When will high-tech executives realize that the Democrats, whom high-tech has been supporting so generously for so long, are doing absolutely nothing for them?

Reuters continues:

Major changes [to H-1B visas] would require Congressional action ... and tech industry executives are worried that partisan rancor over Obama's unilateral action could set back chances for legislation.

“I don’t view this as a long-term solution, and I hope it doesn’t get in the way of a long-term solution,” said Dave Goldberg, chief executive of SurveyMonkey, a Palo Alto based company.

Come January, the Republican majorities in the House and Senate should act immediately to send legislation to Mr Obama increasing the number of H-1B visas for high-tech workers. If Mr Obama vetoes this legislation, it will become even more evident that the interests of high-tech are better represented by Republicans.

More progressive antipathy against Khanna

HuffPost reports:

"If Khanna had been successful, it would have been open season. The technology industry would have flooded [future races] to take out numerous progressive voices in the state," said Neil Sroka, the communications director for Democracy for America, a progressive group that directed funds toward Honda's campaign. It also received support from labor unions as well as MoveOn.org, the Sierra Club and Planned Parenthood.

Democracy for America had issued an earlier press release after the primary:

Tonight, Silicon Valley voters decisively chose Mike Honda, the true, grassroots progressive in the race, over the billionaire-backed, Republican-lite Ro Khanna. With the registered Republicans now out of the race, Democracy for America members look forward to continuing to make clear that Mike Honda is the only progressive Democrat in this race -- a job we expect to be made considerably easier as Republican-lite Ro Khanna inevitably begins making the same right-wing pitch to voters that he used to 'win' the support of fringe-right millionaires and billionaires.

Ro Khanna should run again, but as a Republican

Democrat Ro Khanna has conceded victory to Democrat Mike Honda in the race for the 17th Congressional District. Khanna should run against Honda again in 2 years, but this time Khanna should switch parties and run as a Republican. Here's why.

In this last election, California's new nonpartisan blanket primary prevented a Republican candidate from getting enough votes to appear on the final ballot. So, the race ended up being between the two Democrats, Honda and Khanna. Khanna, although a Democrat, received almost no support from the Democratic Party. Honda, on the other hand, was backed by almost every state and national Democratic leader, by the California Democratic Party, and by the traditional allies of the Democratic Party, namely the public service employee unions (like the teachers unions), Planned Parenthood, the Sierra Club, and black and Hispanic leaders. (For a more detailed discussion of who the respective supporters of Honda and Khanna were, see here.) It is next to impossible for a Democrat to win an election against another Democrat without the backing of the Democratic Party.

Many of Khanna’s positions are consistent with positions advocated by Republicans. For example:

• Khanna is in favor of reforming budget-busting pensions of public service employees. The leader of the pension reform movement is former Democratic San Jose mayor, Chuck Reed, who endorsed Khanna. (For more background on Chuck Reed's battles with the public service employee unions, see here.) Reed also endorsed Sam Liccardo in the race for mayor of San Jose. Liccardo, another advocate for public employee pension reform, won his race, and this victory was hailed by the Wall Street Journal as a "Reform Breakthrough." The union reform movement in the South Bay, led by Reed, Liccardo, and Khanna, is very similar in spirit to the union reforms that Republican Governor Scott Walker brought about in Wisconsin through the passage of Wisconsin Act 10, for which Walker has been vilified and attacked by the public unions (including through a recall election, which Walker won). Honda, on the other hand, was endorsed by the San Jose Police Officers union, which has opposed Chuck Reed and the pension reform movement at every turn.
• Khanna supports the Vergara vs State of California decision. The Vergara decision rules that California state laws giving tenure, seniority and other job protections to public school teachers deprive students of their constitutional right to an adequate education. The Wall Street Journal editorial page hailed the decision as a "School Reform Landmark." In contrast, Democratic California Governor Jerry Brown, with the support of the teachers unions, immediately appealed the decision. By supporting the Vergara decision, Khanna once again reveals himself as supporting the kind of reform of public employee unions that Republican Scott Walker brought about in Wisconsin. Honda, on the other hand, (like Jerry Brown, who endorsed him) opposed the Vergara decision. For more information on Khanna's support for Vergara and Honda's opposition to it, see here.
• Khanna supports patent reform. Patent reform is an issue that is near and dear to the hearts of Silicon Valley executives. Enormous amounts of money are lost every year by Silicon Valley companies in patent litigation. And yet, last May, when the Senate Judiciary Committee was about to send a patent reform bill for a vote by the full Senate, Senate Democratic Majority Leader Harry Reid blocked the legislation on orders from the trial lawyers, another major ally of the Democratic Party. Republicans, on the other hand, promise unqualified support for patent reform. This week, Senate Minority Whip John Cornyn (R., Texas) said that lawmakers are “absolutely” going to pass a patent-reform bill next year when Republicans take control. Khanna supports patent reform. Honda has also declared himself in favor of patent reform. But, one must ask oneself: Who would be more likely to be an effective advocate in favor of patent reform, Honda, who is beholden to the mainstream Democratic Party and its ally, the trial lawyers, or Khanna if he switched to the Republican Party?
Khanna opposes SCA-5. SCA-5 was a proposed amendment to the California state constitution that sought to reintroduce affirmative action into the admission process at California public universities. It was passed by the California State Senate on a party-line vote, with Democrats all voting in favor, and Republicans all voting against. It then ran into strong opposition from Indian- and Asian-Americans, who realized that, if affirmative action were introduced to increase the number of black and Hispanic students in California universities, this would inevitably result in a reduction in the number of places for Indian- and Asian-American students. For more information on the controversy surrounding SCA-5 and on the opposition to it in the Indian- and Asian-American communities, see here. Honda has also declared himself opposed to SCA-5. But, one must again ask oneself: Who would would be more likely to be an effective opponent of SCA-5, Honda, who is beholden to the mainstream Democratic Party, which introduced SCA-5 and voted unanimously in favor of it, or Khanna if he switched to the Republican Party?

Khanna has already been vilified as a "Republican-lite." For example, The San Francisco Sentinel reported:

Even Howard Dean, a Honda supporter and founder of Democracy for America, voiced his confusion in a mass email on Wednesday: “As the former Chair of the Democratic National Committee, it’s obvious to me that Ro Khanna is campaigning like a Republican,” Dean wrote. “Real Democrats don’t use ‘liberal’ as an epithet or attack fellow Democrats for standing up for progressive values like making sure the wealthy pay their fair share in taxes.”

So, if many of Ro Khanna's positions are consistent with Republican positions and he is already being labeled by Democrats as a Republican and denied any support by the Democratic Party, Khanna might as well take the final step and run as a Republican. That way, he could receive political and financial support from the Republican Party and Republican PAC's.

Of course, the larger point here is that Ro Khanna was also almost universally supported by Silicon Valley high-tech executives and workers for backing the very positions outlined above. What that means is that many of the positions these executives and workers support are supported by the Republican Party and opposed by the Democratic Party. The Democratic Party also attacks Silicon Valley on an almost daily basis for a variety of other reasons, for example, for not having a diverse enough workforce or for not paying enough taxes or for contributing to income inequality. For more information on all the attacks being mounted by the Democratic Party and Progressives in general against Silicon Valley, see here. Maybe it is time for Silicon Valley executives and workers to realize that their traditional close alignment with the Democratic Party is unwarranted and that their interests would be much better served if they aligned themselves more closely with the Republicans.

(As an aside, I must acknowledge that maybe there is a "third way." Yes, many of Ro Khanna's positions are also held by Republicans, but, Ro Khanna, Chuck Reed, and Sam Liccardo hardly resemble mainstream Republicans, either, and could not be elected in the South Bay running on traditional Republican platforms. Perhaps, Khanna, Reed, and Liccardo represent the kernel/vanguard of a third party, neither Republican nor Democrat, but one that adopts various reasonable positions from and avoids the extremes of both parties. Such a third party could likely find abundant support -- including financial support from high-tech billionaires -- in Silicon Valley and begin to expand from there. Perhaps Silicon Valley is on the verge of revolutionizing the political landscape in the same way it has revolutionized the business landscape over the last several decades.)

Update on race between Honda and Khanna

The San Jose Mercury reports that Khanna is not conceding:

Khanna's campaign was clearly not giving up hope. "Unfortunately, given the small number of votes released tonight, we are still left with nearly 35 percent of voters to be counted," spokesman Tyler Law said Wednesday evening. ... Santa Clara County estimates it still has about 120,000 to 150,000 mail-in ballots and about 14,000 provisional ballots still to be tallied countywide, said assistant registrar Matt Moreles. He said it's reasonable to assume the number of those from within the 17th District is roughly proportional to the amount of the county that's within the district -- about 25 percent.

It is unfathomable that in the heart of Silicon Valley somewhere between 25% and 35% of votes remain to be counted two days after the election. Apparently our government does not know anything about real-time, event-driven analytics.

What does the race between Honda and Khanna mean for Silicon Valley?

What does the race between Mike Honda and Ro Khanna for the 17th Congressional District mean for Silicon Valley?

Note: As of this afternoon, Honda is leading Khanna by about 5% of the vote, with many mail-in ballots still uncounted. But, the analysis in this post is valid regardless of who ends up actually winning the election.

California's new nonpartisan blanket primary prevented a Republican candidate from appearing on the ballot. So, the choice was between two Democrats. I voted for Khanna, who lives in my hometown of Fremont, believing that he would do a better job than Honda of representing and promoting the interests of the high-tech industry that forms such an integral part of the Silicon Valley economy.

Khanna was endorsed by many high-tech luminaries, including:

• Eric Schmidt, Executive Chairman of Google
• Marissa Mayer, CEO of Yahoo
• Marc Andreessen, coauthor of the first internet browser, Mosaic, and general partner of the VC firm Andreessen Horowitz
• Sheryl Sandberg, COO of Facebook
• Marc Benioff, founder and CEO of Salesforce
• Brook Byers, founder, and John Doerr, partner, of the VC firm Kleiner, Perkins, Caufield, and Byers
• Paul Otellini, former CEO of Intel
• Ian Clark, CEO of Genentech

Khanna was also endorsed by a few politicians, including:

• Gavin Newsome, Lieutenant Governor of California
• Steve Westly, VC investor and former Controller and Treasurer of California
• Chuck Reed, Mayor of San Jose

Khanna was also endorsed by many of the Indian-American entrepreneurs and businessmen who have contributed so much to the growth of the Silicon Valley economy over the last several decades. To mention just a few:

• Yogen Dalal, partner at the VC firm Mayfield Fund
• Deepak Ahuja, CFO of Tesla
• Ajay Banga, CEO of MasterCard

See here for a full list of Khanna's endorsements.

Honda was endorsed by most current national and state power brokers of the Democratic Party, including:

• President Barack Obama
• California Senator Barbara Boxer
• California Senator Dianne Feinstein
• Congresswoman and Former Speaker of the House Nancy Pelosi
• California Governor Jerry Brown
• Congresswoman Debbie Wasserman Schultz, Chair of the Democratic National Committee
• California State Superintendent of Schools Tom Torlakson (a favorite of the teachers unions)
• California Senate President Pro Tempore Darrell Steinberg
• California Assembly Speaker John Perez

Honda was also endorsed by labor unions in both the private and the public sector, such as:

• AFL-CIO
• United Farm Workers
• California Federation of Teachers
• California School Employees Association
• San Jose Police Officers Association

Honda was also endorsed by many Latino and African-American leaders, including:

• Congressman Xavier Becerra, House Democratic Caucus Chair
• Congresswoman Marcia Fudge, Congressional Black Caucus Chair
• Congressman Rubén Hinojosa, Congressional Hispanic Caucus Chair
• Congresswoman Barbara Lee
• Congresswoman Maxine Waters
• Aimee Escobar, Chair of the Silicon Valley Latino Democratic Forum

Honda was also endorsed by many liberal publications and special interest groups, such as:

• the Daily Kos
• Moveon.org
• Planned Parenthood
• Sierra Club

See here for a full list of Honda's endorsements.

The fact that Chuck Reed, Mayor of San Jose, endorsed Khanna, while the San Jose Police Officers Association endorsed Honda is an interesting detail. As I have written elsewhere, Mayor Reed has led the fight in San Jose against the extravagant, budget-busting pensions awarded to public service employees, including police officers:

In his book, Boomerang: Travels in the New Third World, Michael Lewis quotes Reed on the San Jose police and their pensions: "Our police and firefighters will earn more in retirement than they did when they were working. ... When did we go from giving people sick leave to letting them accumulate it and cash it in for hundreds of thousands of dollars when they are done working? There's a corruption here. It's not just a financial corruption. It's a corruption of the attitude of public service." ... The problem was going to grow worse until, as [Mayor Reed] put it, "you get to one." A single employee to service the entire city, presumably with a focus on paying pensions. ... "I don't know how far out you have to go until you get to one," said Reed, "but it isn't all that far." ... This wasn't a hypothetical scary situation, said Reed. "It's a mathematical inevitability."

In other words, the public sector employee unions, from the teachers unions right down to the San Jose police officers union, were backing Honda.

Honda was perceived as largely out of touch with the interests of and the issues facing high-tech companies in Silicon Valley, while Khanna was perceived as being conversant with those interests and issues. For example, when endorsing Khanna, the San Francisco Chronicle wrote:

One of the telling moments in our editorial board interview with seven-term Rep. Mike Honda came when he was asked about the endorsements his challenger has received from some of the most prominent people in the tech world. Has Honda reached out to those high-tech titans (Eric Schmidt of Google, Sheryl Sandberg of Facebook, Marissa Mayer of Yahoo among them) to find out why they were supporting Ro Khanna? Didn't Honda want and need to know where he was coming up short, or at least how he could be a more effective advocate for Silicon Valley concerns? He has not. Honda mentioned the companies he has toured and the executives he knows. Yet it's almost inconceivable that a veteran legislator would be unable to lock up the support of the biggest players in the industry that defines his district. It's simply unacceptable that a truly engaged leader would not immediately try to assess what went wrong. "I will probably do that later on," said Honda. "It's not a bad idea to follow through on that."

Likewise, the San Jose Mercury, when endorsing Khanna, wrote (here and here):

Honda for 13 years has been a solid vote for civil rights, the environment and equal opportunity. Khanna's views on those issues are similar. But Silicon Valley -- whose economy, like the 17th District, stretches into the East Bay -- needs more than a congressman who mostly votes the right way. It needs a leader who grasps the complex economic challenges this economy faces, can articulate how to deal with them and can reach across the aisle to maybe even win some GOP support. ... Today Congress needs to grapple with complex issues around technology and privacy: drones, NSA spying, medical records online and a whole new world of personal finance practices in a post-credit-card world -- not to mention lingering questions about net neutrality and consolidation of companies like Time Warner. In this world, Khanna, a former U.S. trade representative, would be a player. Honda is irrelevant. Back in the day of earmarks, Honda brought home some bacon. He helped secure the cleanup of Mount Umunhum's old Air Force base, for example. But earmarks are gone, and Honda is not effective in influencing policy. That would be Khanna's strong suit. He brims with energy and ideas, including how to return manufacturing to America.

So, what does the mainstream Democratic support for Mike Honda over Ro Khanna in the race for the 17th Congressional District mean? It means that the interests of unions (both in the private sector and in the public sector), of the pro-choice lobby, of the environmental lobby, and of the black and Hispanic communities count far more with mainstream national and state Democratic Party leaders than do the interests of the high-tech industry in Silicon Valley. When faced with a choice between supporting an old and out-of-touch candidate who represented the traditional factions of the Democratic Party or a young, highly-educated, tech-savvy candidate who was universally supported by the high-tech industry (and whose views on "civil rights, the environment and equal opportunity" were, according to the Mercury News, apparently acceptable), the mainstream leaders of the Democratic Party chose to support the out-of-touch candidate, thereby delivering a sharp and insulting slap in the face to its high-tech supporters, many of whom have donated generously to Democratic candidates and supplied much-needed technical expertise (recall how Google engineers pulled Obama's chestnuts out of the fire by getting the Obamacare website up and running) to Democratic programs.

As the San Jose Mercury reports this afternoon:

[One] of Honda's liberal allies ... [t]he Progressive Change Campaign Committee [the PCCC] called [Honda's probable victory] "a victory to the Elizabeth Warren wing against the corporate wing" of the Democratic Party. "Ro Khanna is a corporate conservative who ran as a Democrat in name only, who called Mike Honda 'too liberal' in smear attacks," the committee said in a statement. "His Big Money donors should demand a refund."

In sum, Democratic support for Mike Honda extends all the way from the left-wing "Elizabeth Warren" fringe of the Party, as represented by the PCCC, all the way up to President Obama. Thus, the Democratic effort to re-elect Honda is just another episode in the war being waged by an inherently left-leaning, anti-capitalistic Democratic Party against the high-tech industry, a war I have written about repeatedly. One can only wonder when the leaders of Silicon Valley's high-tech companies will stop giving knee-jerk support to the Democrats and start looking elsewhere to find a party that is more sympathetic to their high-tech agenda.

Trial lawyers order Harry Reid to scotch patent reform

In an article in WSJ today entitled Even Silicon Valley Tilts Republican, Gordon Crovitz writes:

Plaintiff lawyers joke that their focus has gone from “PI to IP”: Now that personal-injury litigation has been reformed in many states, they’re turning to intellectual-property lawsuits such as patent infringement. ... In May the Senate Judiciary Committee was about to send patent reform for a vote by the full Senate when Chairman Patrick Leahy (D., Vt.) shocked Silicon Valley lobbyists by declaring there would be no vote. “I have said all along that we needed broad bipartisan support to get the bill through the Senate,” Sen. Leahy said. “Regrettably, competing companies on both sides of this issue refused to come to agreement on how to achieve that goal.” ... Over the summer, Mr. Leahy admitted that his earlier explanation was false: There was no failure among technology companies to agree on reform. Instead, Mr. Reid had instructed Mr. Leahy to drop patent reform on the orders of trial lawyers.

As a result of the failure of a Democratic Senate to pass patent reform, writes Crovitz, Silicon Valley companies are beginning to transfer their allegiance to Republicans:

Washington is a disaster zone for innovation, especially for the software firms that make up the growing parts of the U.S. economy. There has been no progress in meeting Silicon Valley’s desperate needs, including patent reform and open immigration for skilled workers. As a result, technology companies long associated with liberal causes are switching loyalties. In 2010 Democratic candidates for national office got 55% of contributions from tech-company political-action committees. This year Republicans have received 52%. According to the Center for Responsive Politics, companies with PACs giving more to Republicans than to Democrats include Google, Facebook and Amazon.

I have written elsewhere (for example, here) about how the push by some elements of the Democratic Party for racial and gender quotas is inconsistent with the meritocratic philosophy of Silicon Valley. Now high tech companies are realizing that their interests are also inconsistent with another major member of the Democratic coalition, namely, trial lawyers.