SAN FRANCISCO — When I moved to the Bay Area two years ago, it was with a sense of relief.
Relief from New York winters and deteriorating subways, yes. But also relief after six years of covering Wall Street, an industry that had moved from one crisis to another after the financial crash of 2008, drawing the unending wrath of the public.
In California I was joining a growing team of reporters covering Silicon Valley, which had quickly become the new engine of the economy. Just like Wall Street before it lost its luster, the tech industry had become the destination of choice for the top college graduates. I would be writing about a place where everyone was focused more on the future than on the past.
Now, just two years after getting here, and a decade after the start of the financial crisis, I have a creeping sense of déjà vu as I go about my job.
Admiration of the tech world has, in the wake of a growing list of scandals, quickly soured into an intense suspicion that manages to cross partisan lines, similar to what Wall Street faced after 2008.
As I have watched the recent parade of tech executives being grilled by Washington lawmakers from across the political spectrum, it has been eerily reminiscent of the combative hearings the big banks faced back in 2009 and 2010.
As was true after the financial crisis, the backlash against tech rises out of a public awakening to the integral role that these huge companies occupy in our society — with Facebook, Uber and Twitter playing the part that Goldman Sachs and JPMorgan Chase did a decade ago.
“People talk about bankers being amoral,” said Charlie Beckett, the director of the Truth, Trust and Technology Commission at the London School of Economics. “They are starting to talk about tech people in similar language. Where before they were kind of heroes — they were people who brought us these wonderful products — they are now starting to be blamed for the ills of the world.”
It often feels as though these companies took on their pivotal positions so quickly that no one — not even their employees — had a chance to understand how they really worked or how much influence they had.Image Facebook’s Sheryl Sandberg and Twitter’s Jack Dorsey at a Senate hearing last week. Worries about social media platforms are fueling a push for regulatory action similar to the Dodd-Frank financial rules. Credit Tom Brenner for The New York Times
Ana Botín, a longtime executive at the giant Spanish bank Santander, recently wrote on LinkedIn that the tech companies were losing the same basic thing that banks lost in 2008: the public’s trust.
“Some in big tech are beginning to accept what we in banking learned some years ago: We don’t have all the answers,” Ms. Botín told me last week.
The storm that Ms. Botín and other bank executives faced after 2008 and the one we are witnessing now are obviously different.
The crisis precipitated by the banks was a financial one that caused markets to crash, and threatened to bring down the global economy.
The crisis involving the internet giants is not hitting our pocketbooks — it is straining our confidence in what we know about the world. If Russian hackers can create and amplify fake news stories across the many sites we have come to rely on, where can we go for reliable information?
In public surveys, like the Harris Poll Reputation Quotient, the tech giants are still polling well ahead of Goldman and Wells Fargo, and some, like Amazon and Apple, seem to be mostly flying above the fray.
But the Edelman Trust Barometer found that the public’s confidence in search engines and social media platforms fell 11 percentage points from 2017 and 2018. They face more skepticism than even we, the perennially unpopular journalists.
I can see this change in the companies themselves, which are on the defensive with the public and press, and in at least some young employees and recruits, who are beginning to wonder if taking a job at Google or Facebook might come with just as many problems as working at Goldman Sachs.
The exact ills that people assign to the industry tend to differ based on their politics. While people on the right, including President Trump, have expressed the most concern about political bias and censorship, the left has worried more about the way the companies opened the door to election interference and have exacerbated income inequality. But nearly everyone is voicing unease about the way our children have been turned into digital addicts.
The broad shift in perception is inevitably piling more blame onto the shoulders of one industry than it should bear. Like the mortgage meltdown, our current crisis of confidence is the result of factors that go beyond any one player in the drama — from the polarization of the media landscape to the growing economic inequality that has led to distrust of elites of all sorts.Image The Federal Reserve Bank of New York and its reflection. “People talk about bankers being amoral,” said Charlie Beckett of the Truth, Trust and Technology Commission at the London School of Economics. “They are starting to talk about tech people in similar language.” Credit Jeenah Moon for The New York Times
Whatever the reality, political momentum is building behind some sort of broader regulatory response, similar to what came together in the Dodd-Frank financial regulations. The current push has begun with talk of legislation that would protect our privacy — but much bolder steps are being considered.
What I wonder now is whether any regulatory response will follow a similar path to what came after the financial crisis.
A long list of new laws in the United States and Europe did seem to make the banks safer and another crisis less likely.
But the regulations also appear to have cemented the status of the biggest banks in our economy. The largest financial institutions now control a bigger proportion of the industry’s assets than they did before the crisis. These big banks are regulated as if they were more like utilities, but the high regulatory costs provide a kind of barrier against most competitors.
It is easy to imagine something similar happening in the technology industry, and European authorities have already taken some steps in that direction.
If tech companies are forced to be more responsible for the content on their platforms, they will most likely need to build a significant apparatus for compliance. That would cut into profitability. It would also make it very hard for upstarts to challenge them.
“There’s an increasingly loud call for the platforms to get involved in content moderation,” said Cory Doctorow, a special adviser with the Electronic Frontier Foundation. “It’s well intentioned, but the outcome of that is very likely to be pretty disastrous.”
Mr. Doctorow has been part of a growing chorus of people calling for antitrust actions to break up the biggest companies, rather than tweaking their operations.
Whatever steps the government takes, they are unlikely to help recover the trust that has already been lost. As I know from those years of covering the banks, confidence, once gone, is not easily regained.
As for me, the familiar problems have not allowed for the change of pace I was expecting. And in truth, the subways out here are no better. But the weather is still very nice.
Follow Nathaniel Popper on Twitter: @nathanielpopper.
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