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.