President Biden’s policies have helped to subdue the COVID pandemic and put people back to work. But he’s getting little credit because Americans are transfixed by soaring prices for fuel, food and other necessities.
Inflation hovers like an alien spaceship over the Democrats’ midterm election prospects. U.S. voters say they trust Republicans over Democrats to handle it, by a whopping 19 points. They also give Republicans a 14-point lead on managing the economy.
To make matters worse, some congressional Democrats are pressing for a vote this summer on ill-conceived “antitrust” legislation aimed at dismantling America’s most innovative and competitive tech companies.
With inflation eating away at working families’ purchasing power, it’s hard to imagine a more effective way for Democrats to show they are out of touch with voters’ everyday economic struggles.
Yet again, party leaders again are letting the progressive left’s ideological zeal dictate their economic agenda. That’s triggered private grumbling by some Senate Democrats facing competitive re-election campaigns this fall. California Democrats who represent lots of tech workers understandably are balking, too. In general, however, the party’s pragmatic, pro-growth wing, which should be a forceful champion for U.S. high-tech innovation, has yet to find its voice.
Sens. Amy Klobuchar and Chuck Grassley, architects of the Senate anti-tech bill, insist that it’s a popular and bipartisan measure. But there’s no discernible public groundswell for breaking up or drastically regulating big tech companies. In fact, market concentration and antitrust don’t even register when voters are asked to name their top concerns.
Instead, the anti-tech crusade springs from the fevered brow of the nation’s political class. It’s propelled mainly by left-leaning academics, activists and journalists, business-bashing liberals like Sen. Elizabeth Warren, and a smattering of Trumpist Republicans like Sens. Ted Cruz and Josh Hawley. The left claims that “Big Tech” uses its market power to quash competitors, while the right whines about social media platforms censoring Donald Trump and other veracity-challenged conservatives.
Americans do have some qualms about big tech companies, even if they aren’t top of mind. In opinion research PPI has commissioned, battleground voters were most worried about their privacy and data security. They are less concerned about market power, and in fact are more inclined to see the size of U.S. tech companies as an advantage for our workers and economy.
Although presented as an update of U.S. antitrust laws, the Senate bill does not tackle market concentration across the U.S. economy. Instead, it draws a bead on a handful of big tech companies: Alphabet (formerly Google), Apple, Amazon, Meta (formerly Facebook) and perhaps Microsoft.
The anti-tech coalition evidently sees big as synonymous with bad. Amazon, they say, takes advantage of network effects to drive consumers to its online marketplace and provide popular products and services that brick-and-mortar stores can’t match. The big platforms also are accused of preferencing their own products and services in searches, even though the same could be said about the shelf placements in your friendly neighborhood grocery stores. Apple and Android control the sale of apps for their smartphones not to assure quality and data security, but to rake off lucrative fees. All the companies are accused of gobbling up potential competitors.
Big, powerful companies always merit close scrutiny. But tech’s foes haven’t made a convincing case that they harm U.S. consumers, throttle competition or stifle innovation in the vibrant tech-ecommerce ecosystem.
Consumers won’t be happy if Congress forces tech platforms to cut back or spin off integrated services they’ve come to rely on, such as Google Maps and Amazon Prime’s free next-day shipping. Google’s instant search results would be subject to endless second-guessing by regulators and rivals. People might lose access to Amazon Prime as well as the “Fulfillment by Amazon” services offered to hundreds of thousands of small businesses that sell on the behemoth’s platform. Smartphone users could be vulnerable to malware installed on side-loading apps not vetted by device manufacturers.
U.S. workers wouldn’t be any better off either. According to calculations by PPI economist Michael Mandel, the tech-ecommerce sector has replaced the health-care industry as the economy’s biggest job creator, over the past five years accounting for 40% of all job growth in the U.S. economy.
These jobs also pay well. Average tech-ecommerce pay is higher than average manufacturing pay in almost every state, says Mandel. Production and nonsupervisory workers in the warehousing industry, which includes most fulfillment centers, have seen their hourly pay jump by 15% over the past year.
While all sectors have been hit by rising prices, inflation has been notably restrained in the digital sector — the opposite of what you’d expect if it were truly dominated by tech monopolists busy snuffing out competition. Online prices increased by only 2.9% in April compared to a year earlier, according to the Adobe Digital Price Index.
Finally, unraveling the nation’s most dynamic tech companies would undermine U.S. innovation and global competitiveness. Biden says America is locked in a race with China for tech mastery; gutting tech companies would be akin to shooting ourselves in the foot.
So Democrats have a choice to make. Will they join left- and right-wing populists in taking a sledgehammer to America’s most successful companies? Or will they look to correct abuses in a smart way that doesn’t hamstring innovative companies that are investing at home, creating good jobs, keeping prices low, and helping America outcompete China?
Marshall is the president and founder of the Progressive Policy Institute.
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