We've been hearing a lot in recent months
about techlash, the backlash against the world's
largest and richest tech firms.
The backlash is taking three forms: cognitive, political,
and economic.
Let's take that last piece first and look at the growing
economic power of these firms.
If you look at the top 10 firms by market cap in the US,
you can see that the top five of them
are the big Silicon Valley tech platform firms.
These firms are generating more wealth
than any other companies before in history.
And a lot of it, of course, is being stored abroad
in overseas tax havens.
There's been a lot of talk in the last couple
of years about these overseas cash hordes.
In fact, the Trump administration recently
changed the tax code, hoping to get some of that money
back into the US.
But interestingly most of those assets, as you see here,
are actually being held in bonds, many of them
corporate bonds, rather than cash.
So why is this?
Well, the largest tech firms can use their own high credit
ratings to issue debt at very low interest rates.
They then use that to purchase the bonds of other companies
and hold those as safe assets in overseas havens.
Now what happens if they're going to bring this cash home?
Well that's going to mean the selling
of these corporate bonds, which could have
a big impact on interest rates.
All of this, as well as growing concerns about monopoly power,
anti-trust issues, has led Americans
to believe that the internet giants should
be more regulated, and if you look here,
you can see that over half of Americans
do indeed believe that we need to go further with regulation
of the tech giants.
So watch this space.