Techlash to accelerate as globalism fades
"Techlash" against omnipotent Silicon Valley corporate giants is accelerating as President Trump demonstrates that globalism is no longer a prime economic driver.
FAANG tech giants that include Facebook, Amazon, Apple, Netflix, and Alphabet (Google) were almost worthless in 2000, but by March 20, 2018, the combined stock market capitalization of these companies reached an all-time high of $3.015 trillion.
Presidents since George W. Bush have demanded that China increase imports of U.S. goods or suffer retaliatory tariffs. But Chinese representatives would fly to the U.S. and quickly negotiate mostly cosmetic and noneconomic promises to quiet disputes.
But when Chinese officials visited Washington, D.C. last September, they learned that President Trump had slapped tariffs on $60 billion's worth of Chinese exports. The Baltic Dry Index, representing the cost to ship a maritime container, plunged 63 percent from $1,727 to $639. FAANG stocks tanked by 30 percent, before partially rebounding.
Heralded for two decades as the triumph of American business prowess, Charles Hugh Smith argues that global tech giants are increasingly viewed as an opaque Deep State "monoculture that incentivizes self-serving corruption and propaganda." He warns that their primary task is to "convince the commoner sheep being sheared that being sheared is the best of all possible worlds — and that dissenting sheep will be led off to slaughter."
Smith adds that the fatal flaw with such central planning solutions is that "they run completely counter to the principles of evolution which guide all systems, natural and human. That which is rigid and inflexible cannot adapt to rapid change, and thus it fails to adapt and vanishes from the Earth. That is the essence of evolutionary dynamics."
Between 1985 and 2000, the trade deficit with China rose from $6 billion to $83 billion but was small compared to the size of the economy. But after President Bill Clinton signed the U.S.-China Relations Act of 2000, the deficit tripled by 2006 to $234 billion. The loss of 1.9 million jobs, mostly in Midwestern manufacturing, strongly contributed to the Republicans losing six senators and 31 representatives in the 2006 midterm elections.
Democrat Barack Obama crushed Republican John McCain in 2008 by promising to create four million jobs by aggressively attacking China's currency manipulation.
But the Democrats' attitudes toward tech offshoring changed radically by the 2012 elections, as most Silicon Valley CEOs and 83 percent of employee donations backed Obama's re-election bid. Highlighting tech giants' symbiotic business relationships with Washington, D.C., the TechCrunch blog coined the term "Valley of the Democrats."
The U.S. trade deficit with China rose to $367 billion in 2015, primarily driven by FAANG tech companies, like Apple that offshored all but 69 of its 766 suppliers.
Campaigning for Democrat Hillary Clinton across industrial Indiana in mid-2016, Obama calmly stated that Trump claimed that "he's going to bring all these jobs back. Well, how exactly are you going to do that? What are you going to do? There's no answer to it." He argued those jobs are never coming back and that blue-collar workers must learn to code.
Big Silicon Valley tech giants have argued that capitalism and the nation-state may end, because a single computer program can wipe out hundreds of jobs. But President Trump, demonstrating last year that the U.S. could generate the largest expansion of domestic manufacturing jobs since 1988, has flipped the script against Silicon Valley.
Realizing that Trump may have fundamentally co-opted the industrial Midwestern voter base for Republicans, Democrat presidential hopefuls are now going all in for socialism, open borders, and victimization. Increasingly seen as the cause of much of the outsourcing of American jobs to Asia, Democrats will join the Silicon Valley Techlash.