Techies Get Friendly White House Reception – Roll Call
While President Barack Obama’s drive to curb influence-peddling has transformed the swank lobbying world into a kind of ghetto, there is an Obama Corridor on K Street, and it houses technology industry operatives galvanized by an administration that has put their issues at the top of its to-do list.
Not only do tech lobbyists have a leg up on their rivals in the business community, but they are getting the kind of solicitous treatment from Obama they never had under the business-friendly President George W. Bush.
Obama and his aides, according to numerous tech industry sources, buy into the notion that technology is special because it promotes the development of other industries. Bush viewed the tech world as just another business sector, these sources say. “He doesn’t know the difference between a silicon chip and a potato chip,” tech lobbyists were fond of whispering to each other.
“I really think that President Obama has shown he understands that innovation and technology can drive the economy,” said Josh Ackil, a partner in the Franklin Square Group, which specializes in representing high-tech companies. “It’s a different perspective,” Ackil added, saying the new view may stem from a “generational” attitude and from Obama’s successful use of technology in the campaign.
“There’s been rejuvenation,” said one Obama Corridor lobbyist. “We used to watch Bush’s State of the Union addresses and wait to see if he said the word ‘broadband’ — and if he did, that was it for the year.”
On Wednesday, Obama did his first bit of presidential glad-handing with the business community, inviting a tech-heavy group of 13 chief executive officers to the White House to share their thoughts. Among them were Micron’s Steve Appleton, Motorola’s Greg Brown, John Bryson of Edison International, Ann Mulcahy of Xerox, Sam Palmisano of IBM and Google’s Eric Schmidt.
Not wanting the tech community’s Washington reps to stink up the Roosevelt Room — where Obama met with the CEOs — the White House sequestered the lobbyists in another room with new National Economic Council Deputy Director Jason Furman. Some then joined the CEOs in the East Room for a few public remarks by Obama.
“CEOs are pretty good lobbyists, but they’re not registered,” remarked one source who spoke about the chiefs’ privileged access to Obama.
Sources say the meeting grew from a letter to the bipartisan Congressional leadership last week backing the stimulus. The letter was signed by many of those who found themselves at the White House. In a further sign of Obama’s commitment to the tech crowd, the stimulus itself includes large chunks of change for broadband, health information technology and scientific research, among other items. Even the road construction money, lobbyists point out, benefits technology companies because of sensor equipment that will be used on modern highways and the possibility of laying down wire as the roads are built.
On the Obama Corridor, sources point to an in-crowd with particularly tight ties to the Obama folks. Among them is Bruce Mehlman of Mehlman Vogel Castagnetti — ironically a Bush administration alumnus who is executive director of the Technology CEO Council, which includes several CEOs who met with Obama. Mehlman’s partner David Castagnetti is also close to the former Clintonites who make up Obama’s staff. And Jon Hoganson, a principal at the firm, worked for White House Chief of Staff Rahm Emanuel for five years and is viewed as a key conduit to the White House. Hoganson has performed a critical role in building the type of relations between the White House and the tech officials that led to Wednesday’s CEO summit.
The first among equals of the CEOs is Google’s Schmidt, who served as an Obama transition adviser on tech issues and who has hosted Obama on Google’s campus.
Others with special reach into the West Wing, according to K Street sources, are Mark Bohannon of the Software & Information Industry Association and John Kenny and Ken Kay of the e-Luminate Group.
Several tech association officials said the Obama team was paying close attention to their needs.
Ralph Hellmann, senior vice president of the Information Technology Industry Council, noted that ITIC President Dean Garfield and other ITIC staffers have been in frequent contact with Obama aides since well before Obama was elected.
“It’s very logical that now that he’s in office, [the stimulus] largely reflects priorities that we recommended to them,” Hellmann said.
Phil Bond, president of the Technology Association of America — newly formed as a result of a merger between Bond’s old Information Technology Association of America and the American Electronics Association — said the Obama outreach to him and other techies has been significant. The administration asked his group in early December to convene a meeting of the tech lobby at AEA headquarters so that transition officials could get the gist of the industry’s needs and concerns.
It’s been better than under the Bush regime, agreed Bond, a former Bush undersecretary of Commerce.
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Techies Get Friendly White House Reception
Op-Ed Columnist – On the Edge – NYTimes.com
A not-so-funny thing happened on the way to economic recovery. Over the last two weeks, what should have been a deadly serious debate about how to save an economy in desperate straits turned, instead, into hackneyed political theater, with Republicans spouting all the old clichés about wasteful government spending and the wonders of tax cuts.
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Fred R. Conrad/The New York TimesPaul Krugman
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Readers’ CommentsIt’s as if the dismal economic failure of the last eight years never happened — yet Democrats have, incredibly, been on the defensive. Even if a major stimulus bill does pass the Senate, there’s a real risk that important parts of the original plan, especially aid to state and local governments, will have been emasculated.
Somehow, Washington has lost any sense of what’s at stake — of the reality that we may well be falling into an economic abyss, and that if we do, it will be very hard to get out again.
It’s hard to exaggerate how much economic trouble we’re in. The crisis began with housing, but the implosion of the Bush-era housing bubble has set economic dominoes falling not just in the United States, but around the world.
Consumers, their wealth decimated and their optimism shattered by collapsing home prices and a sliding stock market, have cut back their spending and sharply increased their saving — a good thing in the long run, but a huge blow to the economy right now. Developers of commercial real estate, watching rents fall and financing costs soar, are slashing their investment plans. Businesses are canceling plans to expand capacity, since they aren’t selling enough to use the capacity they have. And exports, which were one of the U.S. economy’s few areas of strength over the past couple of years, are now plunging as the financial crisis hits our trading partners.
Meanwhile, our main line of defense against recessions — the Federal Reserve’s usual ability to support the economy by cutting interest rates — has already been overrun. The Fed has cut the rates it controls basically to zero, yet the economy is still in free fall.
It’s no wonder, then, that most economic forecasts warn that in the absence of government action we’re headed for a deep, prolonged slump. Some private analysts predict double-digit unemployment. The Congressional Budget Office is slightly more sanguine, but its director, nonetheless, recently warned that “absent a change in fiscal policy … the shortfall in the nation’s output relative to potential levels will be the largest — in duration and depth — since the Depression of the 1930s.”
Worst of all is the possibility that the economy will, as it did in the ’30s, end up stuck in a prolonged deflationary trap.
We’re already closer to outright deflation than at any point since the Great Depression. In particular, the private sector is experiencing widespread wage cuts for the first time since the 1930s, and there will be much more of that if the economy continues to weaken.
As the great American economist Irving Fisher pointed out almost 80 years ago, deflation, once started, tends to feed on itself. As dollar incomes fall in the face of a depressed economy, the burden of debt becomes harder to bear, while the expectation of further price declines discourages investment spending. These effects of deflation depress the economy further, which leads to more deflation, and so on.
And deflationary traps can go on for a long time. Japan experienced a “lost decade” of deflation and stagnation in the 1990s — and the only thing that let Japan escape from its trap was a global boom that boosted the nation’s exports. Who will rescue America from a similar trap now that the whole world is slumping at the same time?
Would the Obama economic plan, if enacted, ensure that America won’t have its own lost decade? Not necessarily: a number of economists, myself included, think the plan falls short and should be substantially bigger. But the Obama plan would certainly improve our odds. And that’s why the efforts of Republicans to make the plan smaller and less effective — to turn it into little more than another round of Bush-style tax cuts — are so destructive.
So what should Mr. Obama do? Count me among those who think that the president made a big mistake in his initial approach, that his attempts to transcend partisanship ended up empowering politicians who take their marching orders from Rush Limbaugh. What matters now, however, is what he does next.
It’s time for Mr. Obama to go on the offensive. Above all, he must not shy away from pointing out that those who stand in the way of his plan, in the name of a discredited economic philosophy, are putting the nation’s future at risk. The American economy is on the edge of catastrophe, and much of the Republican Party is trying to push it over that edge.
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On the Edge
Come April, IDEO founder David Kelley will have an Edison Achievement Award pinned on him for his “pioneering contributions to the design of breakthrough products, services, and experiences for consumers, as well as his development of an innovative culture that has broad impact.” Kelley has had a hand in the design of the first computer mouse, the Palm Treo, and Steelcase’s Leap chair, among other things. Fast Company celebrates Kelley’s achievements with a series of articles, linked below:
IDEO’s David Kelley wins Edison Award for Innovation
17 Career Lessons from IDEO’s David Kelley
Ideo’s Newest Design Projects (slideshow)
Why a Bowling Shirt Made Me Love David Kelley
Lastly, there’s a compelling video of Kelley discussing interaction design up at the Designing Interactions site, definitely worth a look.
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IDEO founder David Kelley to receive Edison Achievement Award
great stuff !
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Windows 7 Touch and Multitouch on HP TouchSmart PC on Vimeo
The $825 billion stimulus plan presented this month by House Democrats called for $37 billion in spending in three high-tech areas: $20 billion to computerize medical records, $11 billion to create smarter electrical grids and $6 billion to expand high-speed Internet access in rural and underserved communities.
A study published this month, which was prepared for the Obama transition team, concluded that putting $30 billion into those three fields could produce more than 900,000 jobs in the first year. The mix of proposed spending is different in the House plan, but the results would be similar, said Robert D. Atkinson, president of the Information Technology and Innovation Foundation, which did the study.
Beyond creating jobs, advocates say, government investment in these technology fields holds the promise of laying a lasting foundation for more business innovation and efficiency, while helping to create new digital industries.
“The appeal of these kinds of investments is that you not only get the stimulative effect but also build a platform for productivity gains and long-term growth,” said Blair Levin, a former senior official at the Federal Communications Commission who was a technology policy adviser on the Obama transition team.
During the campaign and afterward, Mr. Obama has championed policies to promote electronic health records, better broadband networks and power grids that use computers and sensors to fine-tune electricity use.
But the standard for including any initiative in the economic recovery plan is that it be “timely, targeted and temporary,” while also creating jobs, Mr. Levin said recently in an address to the Congressional Internet Caucus, an advisory group. Not every investment in these technology fields, he said, fits those criteria.
The technology industry is not typically viewed as a prolific job producer. Much of its manufacturing is highly automated. But bringing technology to services fields like health care, telecommunications and energy can be labor intensive and thus generate jobs.
At the top of the jobs pyramid, the design of new technology is done by scientists and engineers with advanced degrees. The installing, tweaking and maintaining of that technology in specific industries involve a far broader base of workers with a range of training, skills and education.
“There is a huge implementation phase to the adoption and use of these kinds of technologies locally,” said John Irons, an economist and research director at the labor-oriented Economic Policy Institute in Washington. “The jobs involved do tend to span the spectrum of skills and income levels. And they are not going to be outsourced offshore.”
The job-generation estimate by the Information Technology and Innovation Foundation translates into more than 30,000 jobs created for each $1 billion of government investment — roughly similar to projections for public works spending.
But proponents of spending on digital infrastructure say the beneficial spillover effects are greater than for conventional public works. The high-tech investments, they say, can be the contemporary equivalent of federal financing for highways in the 1950s, which fostered the growth of businesses like automakers and national retail chains.
For years, technology policy in the United States has focused mainly on broad measures like federal spending on basic research and tax credits for private investment in research and development. Mr. Obama has vowed to increase spending on basic research and make R.& D. tax credits permanent.
But the administration’s plan for large programs tailored to specific industries is a departure. How investments and incentives are structured, experts say, will be crucial to companies, consumers and taxpayers.
The danger of such an approach, some economists warn, is that industry-specific government programs can tilt markets to the advantage of some companies and disadvantage of others, putting Washington on the path of picking winners and losers.
The other criticism is that, while these projects may be worthy for the long term, they should not be part of a short-term economic recovery plan.
All three fields, said Robert E. Hall, an economist at Stanford, involve “a bunch of specialists, where if we raised spending quickly, the limited number of competent suppliers would be in short supply and get increased incomes,” benefiting some companies more than the economy as a whole.
“We should not pour government money into these areas,” said Mr. Hall, who is a senior fellow at the Hoover Institution, a conservative research group.
The issues surrounding electronic health records illustrate the policy challenges of targeted programs. Mr. Obama has advocated spending $50 billion over five years to accelerate the use of such records and the sharing of health information across a national network.
The computerized records, when used properly, are an indispensable tool for measuring, tracking and improving patient care — yet only about 17 percent of the nation’s doctors are using them. They are commonplace at large medical groups, but 75 percent of doctors practice in small offices of 10 physicians or fewer.
Doctors often benefit from inefficiency, because the dominant fee-for-service payment system means they are paid for doing more — more doctor visits, tests, surgical procedures, pills.
“Paying to put computer hardware and software in physicians’ offices isn’t going to do anything unless you change the incentives in the system,” said Dr. David J. Brailer, former national health information technology coordinator in the Bush administration.
There are some experiments with a pay-for-performance approach, in which Medicare gives medical groups bonus payments for meeting certain benchmarks of quality care. Monitoring that performance requires electronic health records. Yet to date, these have been isolated tests.
“You want to pay for achievement — better health quality and efficiency,” said Dr. David Blumenthal, director of the Institute for Health Policy at the Harvard Medical School, who advised the Obama campaign. “But in the transition period, before financial incentives are reformed, you need to provide incentives or grants to use electronic health records because this technology is sort of the opening wedge to reform.”
Those eligible for grants to buy technology, a member of the Obama transition team said, will include inner-city and rural hospitals and small doctor practices. But most money, he said, will go to incentive payments to improve quality and safety of care.
Still, creating effective programs to accelerate the use of health information to improve care will be difficult. And the move toward a national health information network, where patient data is more widely shared among providers and insurers, must include strong safeguards to address concerns about the privacy of personal health information, if Congress is to approve the proposed financing.
Some health experts say a shortage of skilled people is a bottleneck in any rapid push toward electronic records.
In suburban Philadelphia, Greg Beese is head of the Logic Group, a 15-person technology support firm, whose clients include 15 doctors’ offices. He says he looks forward to an acceleration of the use of electronic health records. A person with solid technology skills, he said, can master the health care knowledge in a couple of months on the job. “It’s not like we’d have to send them back to school for two years.”
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Technology Gets a Piece of Stimulus
