Andrew Yang preached his tech-friendly gospel at Sam Altman's San Francisco house: You can't treat tech like oil companies and breaking up Amazon won't bring malls back
- Presidential candidate Andrew Yang had a fundraiser attended by tech workers in San Francisco at supporter and tech investor Sam Altman's house.
- Altman and Yang talked about their shared interest in "universal basic income" and the argument against breaking up big tech. Yang called the proposal espoused by Elizabeth Warren and Bernie Sanders "a knee-jerk 20th-century approach to much more nuanced problems."
- The former tech executive running in the 2020 election has supporters in Silicon Valley, where employees from Google, Apple, and Facebook have donated large sums to his campaign.
- Visit Business Insider's homepage for more stories.
Presidential hopeful Andrew Yang may have been born in New York, but the mood at a money-raising event in Silicon Valley this week was that of a homecoming.
The Yang Gang's biggest spenders in San Francisco gathered for a fundraiser on Wednesday afternoon, where the top ticket cost $5,600. Tech investor Sam Altman hosted the luncheon at his home not far from the tech hub's downtown. The living room filled with Yang's supporters, wearing jeans and suit jackets and hats that said "math," a cheeky campaign slogan that the candidate wore on his lapel in place of an American flag pin.
"There's this notion that techies are averse to any sort of conversation about guidelines on technology, and that hasn't been my experience," said Yang, sitting at the front of the room during a half-hour chat with the host. "The technologists I've talked to, they're pretty reasonable."
Yang sits in the single-digit percentages in several national polls, but the former entrepreneur has rallied a group of tech workers who support him, knowing fully that his signature campaign promise is centered on taxing their employers. The presidential candidate wants to give $1,000 a month to every adult American, an income that's paid for in part by a value-added tax on goods and services.
A wide-ranging discussion covered the fundamentals of "universal basic income," the path to pulling the federal government into the 21st century, and the argument against breaking up big tech.
Yang said he "wouldn't lead with" breaking up big tech as a solution to society's woes, which got a laugh.
"It's just false that if we were to break up Amazon into four mini-Amazons, that all the malls and mainstream stores would reopen. They would not," Yang said. "And many of these marketplaces gravitate toward one or two winners. ... No one's using Bing because no one wants to use the fourth-best search engine."
"... To me, the DC-break-up-big-tech approach is unfortunately just a knee-jerk 20th-century approach to much more nuanced problems," he said. "Do I think that consolidation has gone overboard in tech? Yes. Do I think that now the business model of a startup is to get acquired by one of the behemoths and not try to displace them over time? Yes. Does that stifle innovation and some level of creativity and competition? Yes. So these are real problems, but you can't take a sledgehammer to these problems like it's all going to be fixed if I treat you like a railroad. You don't solve these problems by treating them like an oil company."
A more sophisticated solution involves an "active partnership" with the tech companies, he said.
"The best thing we can do would be to knight a group of young people"
After the floor opened for questions, a Google software engineer who said he worked in a senator's office when he was younger, asked about modernizing the technology that politicians use to help them work smarter. He remembers the pains of recording data in spreadsheets.
"What you don't want to do is you don't want to pretend you can transform that kind of culture, unilaterally, overnight," Yang said in response. "In a way, the best thing we can do would be to knight a group of young people like yourself to just to go into various offices and say, 'Hey, look, they're just there as a resource.'"
Tickets for the event at Altman's home, which included a lunch of charcuterie and cucumber sandwiches, started at $2,000. A VIP pass costs $2,800 a pop, while the "max donor" contribution was $5,600. These funds will fuel Yang's campaign committee and marketing.
The topic of universal basic income, an idea that is so near to Yang that his campaign's website was "ubi2020.com" at the start, came up throughout the event. Its host, Altman, the former head of startup accelerator Y Combinator, is tech's loudest supporter of universal basic income. In the last few years, he led a modest pilot program that gave free cash to people in Oakland. The two joked on stage that "it's harder to give people free money than you think," Yang said.
"The way I think about it is, if you have a population that's living paycheck to paycheck - and 70% of Americans are living paycheck to paycheck," Yang said, "and then you come and say, 'Hey, the magical Asian man wants to give everyone $1,000 a month,' it does not jive with their time-money tradeoffs that they're making all the time, because to them, they have this lived experience where money is very, very scarce."
Yang has said he plans to finance the cheerfully named "freedom dividend" by creating a tax on financial transactions, among other taxes. A value-added tax is similar to a sales tax but it gets collected at every point of the supply chain. For example, if Amazon buys a server for its cloud computing business, it pays a tax on the server. When it buys power, it pays a tax on the power. The tech giant goes on to sell that rackspace, and the end user pays a tax on the price of the computing minus the tax on the server and the power, so as to avoid double taxation.
An analysis by the nonpartisan research group Tax Foundation has cast doubt that Yang's proposed value-added tax of 10% would cover the cost of universal basic income for 236 million adult Americans.
His plan hasn't turned off all employees at the companies that Yang wants to tax.
Andrew Marshall, a software engineer who previously worked at Google, started supporting the candidate in February, because he was interested in Yang's ideas around universal basic income. He said after the event that it's unfair to say the value-added tax would only affect companies like Google and Amazon.
"We can't leverage all of our hopes and dreams on Amazon to fix everything," Marshall said.
The Center for Responsive Politics, whose website OpenSecrets.org tracks federal campaign spending, lists the companies whose public action committees, employees, or owners have contributed the most to Yang's campaign. Google parent-company Alphabet tops the heap, followed by Amazon, Microsoft, the University of California, and Facebook.
The Yang Gang has some big names on its rolls, though they were absent from the event. Jack Dorsey, the cofounder and chief executive of both Twitter and Square, has contributed to Yang's campaign; James Monsees, who helped create Juul, and Twitch cofounder and executive Kevin Lin are also donors.
The long-shot candidate reported one of the biggest improvements on recent fundraising. His campaign pulled in $10 million in the third quarter, a $7.2 million increase over their second-quarter haul.