Obama has been surprisingly unwilling to take credit for the most powerful economic success story on his watch: The growth of the communications/internet sector
Going into the next two debates, Barack Obama would certainly like a bit more of Bill Clinton's mojo. After all, Clinton both won a second term and presided over the Internet-driven New Economy boom of the late 1990s, which created millions of jobs and eliminated the budget deficit. These are achievements that Obama would dearly love to duplicate.
Yet, Obama has been surprisingly unwilling to take credit for the most powerful economic success story on his watch: The astounding growth of the communications/internet sector, including smartphone makers, app developers, internet companies, and wireless providers.
Here are some figures:
• Over the past four years, the internet publishing, search and social media industry has been the top industry in job growth, with a 44% gain in domestic employment.
• Tech has beaten motor vehicles as a source of job growth. Since Obama took office in January 2009, the motor vehicles and parts industry created 94,000 jobs. By comparison, the key tech industries of software, online retailing, and internet publishing, search and social media have created 98,000 additional jobs since Obama's inauguration. Custom computer programming--much of which involves the internet or mobile--accounts for another 91,000 new jobs over the same period.
• The so-called App Economy includes more than 500,000 jobs, up from none in 2007. These figures, based on an analysis of The Conference Board's database of help-wanted ads, include the tech jobs that involve developing and maintaining mobile apps; the non-tech jobs that support app developers; and a conservative estimate of local spillover jobs.
• The real growth rate of gross domestic product is about a half percentage point higher than the official numbers show, once we take into account the enormous increase in data use by consumers.
American companies such as Apple, Google, and Facebook are the new face of American global prowess, with no viable European competitors. Indeed, the success of this sector--which I have called the "Data-Driven Economy'--shows how the U.S. innovation edge has remained vigorous during Obama's term in office. The smartphone/mobile revolution has transformed the life of most Americans since Obama was elected.
So why is Obama avoiding this potent argument that touches almost every American? He did not mention the words 'Internet', 'mobile', or 'smartphone' in the first debate, even thought it would have given him a chance to associate himself with Clinton's second term, which is being remembered more and more positively these days.
One issue may be purely tactical. The auto industry is critical in swing states such as Ohio, while tech-dependent states such as California are solidly Democratic. Still, there are App Economy jobs in every part of the country.
Perhaps more important, Obama may be reluctant to take credit for the communications/mobile job boom when the rest of his administration seems to have declared war on the leading innovative companies of that same boom. In particular, the Federal Trade Commission is actively targeting Google for a major monopolization case, which may be announced any day now. (The FTC is not doing Obama any favors--in an April 2012 ABC News/Washington Post Poll, Google was the most popular tech company, with 82% of respondents expressing a favorable opinion).
If Obama wants to recreate the Clinton second-term boom, he should be wondering why the FTC is marshalling potent forces against one of America's most innovative companies. And he needs to remember that a big part of the Clinton recipe for growth was a relatively hands-off approach on the part of regulators towards Internet companies. The one main exception--the antitrust suit against Microsoft--reached a climax in June 2000, when the trial judge ruled that the software giant should be broken up. Did the apparent success of the antitrust suit, later reversed, signal a sudden surge in tech jobs at startups? Hardly--employment in the internet industry peaked the very next month, and then went into a four-year swoon.
Whether Obama agrees with the current FTC policy or not, he shouldn't let that stop him from using the tech boom as a success story during the coming debates. While Mitt Romney talks about tax policy, Obama can be responding with his record on encouraging the rapid growth of mobile, broadband and tech jobs--and that's the right tone to take.