Wednesday, June 16, 2010

The Government Takeover of High Tech

Dennis Kneale, CNBC Media & Technology Editor, reports:

The Obama Administration is waging a silent, unwise war on high-tech, hell-bent on taming a few targets to bolster a get-tough image. The feds’ enmity toward what we’re best at—technology and making money on it—threatens our long-term economic recovery.

It will curb job growth in an industry the employs well over two million people in the U.S. It will penalize investors. And it could hurt even consumers, who, far as I can tell, aren’t injured by the practices now under review.

These government forces are more interested in meddling in markets to shield weaker companies—the laggards—from the strong ones: the lethal. The feds now try to intervene before anything bad happens, rather than respond after a problem pops up. The effect is to penalize success and criminalize bigness.

I have covered high-tech since the 1980s, and I never have seen the feds involve themselves so fiercely and frequently as they have since President Obama took office. I talked about it on Friday on "Closing Bell" with Maria Bartiromo.

Read more, and watch the video below:

Some additional quotes:

One understands the obligations to enforce the law, but this overzealous campaign goes farther than that—this looks begrudged, retaliatory, possessed of an unabashed, unalloyed anti-business bias. Some see it as part of a bigger, pernicious picture.

“I generally share your sense of the assault on the techies, but have also found that every other industry is under regulatory assault,” says Thomas Curran, a former securities-fraud prosecutor in the Manhattan District Attorney’s office. 

So many industries now rely on public dollars that “regulators have greater sway over private industry generally,” says Curran, a partner at Peckar & Abramson in New York. He laments an attitude among regulators “that business is ‘bad’ and must somehow be cheating, especially if they make money. I encounter this every day.”

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