Bank of America has warned that America’s next social justice movement will be “Occupy Silicon Valley,” which will demand a redistribution of wealth from liberal tech moguls to workers.
With large cap tech stocks that are mostly headquartered in Silicon Valley accounting for about 40 percent of all market gains from the Trump stock boom, Bank of America Merrill Lynch’s Chief Investment Strategist Michael Hartnett suggests that the irrational bonanza “could ultimately lead to populist calls for redistribution of the increasingly concentrated wealth of Silicon Valley,” as first reported by the Value Walk blog.
B of A sees parallels to the “Occupy Wall Street” protests in 2011 that targeted the “one percent,” including big banks that were bailed and given cheap federal loans during the financial crisis of 2007-8. Occupy protestors claimed the government loans were a wealth transfer for the rich, at the expense of workers.
The bipartisan Center for Responsive Politics, which tracks the influence of Silicon Valley money on American elections and government bureaucrats, commented, “Just as water flows downhill, money in politics flows to where the power is.” Their research found that with the rise of Democrat Barack Obama since 2008, Silicon Valley’s annual lobbying expenditures skyrocketed by 800 percent, from $17.8 million to $139.5 million.
Premier venture capitalist and Trump supporter Peter Thiel famously stated that Silicon Valley’s symbiotic business relationship with Washington D.C., earned it the nickname “Valley of the Democrats” in the 2012 presidential election, when 83 percent of Silicon Valley top tech firm employee donations went to Obama. Non-partisan CrowdPac found the trend continued in 2016 presidential contest, with 95 percent of the $8.1 million contributed by Silicon Valley tech employees going to Democrat Hillary Clinton.
Silicon Valley captured a growing percentage of the $1.24 trillion federal procurement budget during the Obama Administration, including half the $86.4 billion information technology budget, and billions in secret “black” cyber-warfare budgets. The Democrat president’s policies also allowed the offshoring of U.S. tech jobs, and let tech companies use foreign tax havens to shelter $89 billion a year from the IRS. Thiat explains why Silicon Valley firms dominate the $2.1 trillion in profits that American businesses now have parked offshore.
Michael Hartnett suggests that liberals are beginning to understand that Silicon Valley’s globalist digital technology firms’ business model has been spectacular for a handful of CEOs and venture capitalists, but left the vast majority of Americans economically behind.
Harnett calls attention to the fact that Apple, Alphabet (Google), Microsoft, Amazon and Facebook now have a market capitalization of $16.1 trillion. That is about $1.2 trillion greater than the entire GDP of New York City, and twice the GDP of Los Angeles.
And one fact illustrates the potential that tech companies have to dominate the United States government: each one of America’s five largest tech companies now has a market capitalization that exceeds the GDP of Washington, D.C.
B of A believes that the divergence between the spectacular technology sector-driven stock market gains on the one hand, versus the continued weak global economy on the other hand, will ultimately be unsustainable.
Harnett’s strategy to prepare for potential economic turmoil is to sell highly appreciated technology stocks, and then buy bank stocks, European stocks, resource commodities and gold.