These are the times we live in: President Trump has taken on Tik Tok.
Social media apps are now national security priorities.
While some of you are still trying to figure out what Twitter and Facebook are all about, the kids have moved on, as they always do. Even Snapchat is too passe now. Tik Tok is where it’s at.
Let’s move past the debate over whether Tik Tok is or is not a national security threat because it’s owned by a Chinese company that may or may not be harvesting all your data. That’s important, but that’s not the part we’re interested in here. Two American tech giants —Microsoft and Oracle — both want to buy Tik Tok, which would solve the problem of American kids uploading their funny videos to a Chinese app. Here’s the part we’re interested in: Trump says he won’t allow the sale unless somebody pays “a substantial amount of money” to the federal government. It’s unclear whether this should be the buyer or the seller. It’s even more unclear why either should owe the federal government anything at all beyond whatever taxes are normally involved. For the government to demand a cut sounds like extortion.
Trump is thinking about this all wrong. Instead of shaking down either Microsoft or Oracle or Bytedance, the Chinese company that owns Tik Tok, here’s what Trump should be demanding. He should say he’ll only allow the sale to go through if the deal benefits rural America.
Everybody else is focused on the impending sale of Tik Tok in terms of the ongoing U.S.-Chinese trade war and an even larger debate over data privacy. But there’s also an opportunity here to address another problem — the growing economic divide between metropolitan America and rural America, a phenomenon that economists have called “the great divergence.” There’s always been an economic divide between the two, of course, but in years past — economies past — the two were still economically connected. Think of it this way: In the industrial age, if Detroit did well making and selling cars, so did Gary, Indiana, because that’s who was making the steel that went into those cars and, ultimately, so did the Appalachian coalfields because that’s who was digging the coal that helped fire those furnaces. Now, though, that connection has been severed in the information age. If Google does well, that’s great for Silicon Valley, but that doesn’t help rural America. Google’s not buying algorithms assembled at digit factories in Martinsville.
Policy think tanks have wrestled with what to do about this. Should we just give up on rural and small-town America? Should the federal government spend lots of money on research and development to try to create new tech capitals in smaller cities across the American heartland? (That’s a Brookings Institute proposal that was favored during the Democratic primaries by Michael Bloomberg, Cory Booker, Pete Buttigieg and Elizabeth Warren and has been adopted now by Joe Biden, although it’s unclear how enthusiastically he’s done so). The problem with that — if you’re a conservative, and maybe even if you’re a liberal — is that would involve a lot of tax dollars. Here Trump has an opportunity to do this without any tax dollars, just some federal muscle. That would mean abandoning any pretense of a laissez-faire approach to the economy, but Trump has never claimed to be a traditional, limited-government conservative. He’s also made it clear he thinks the federal government has a role here — demanding a kickback to the treasury. He just has the wrong role in mind. Here’s what he could do: Precondition the sale of Tik Tok on a commitment that any expansion of its American workforce take place in rural and small-town America. The company is currently headquartered in Culver City, California — just outside Los Angeles. An American president shouldn’t be in the business of encouraging a company to abandon one U.S. city for another (even if we, as Virginians, would be happy to make a case for why it should move here.) But he can rightly encourage Tik Tok to “spread the digital wealth” —to employ a phrase used by a Democratic congressman from Silicon Valley, Ro Khanna.
Tik Tok started the year with 500 employees. Now it has 1,400, according to Forbes magazine. But last month it announced plans to create up to 10,000 jobs in the U.S. — its popularity is growing that much. Those are 8,600 jobs that presently don’t exist but apparently will soon. If we let an unregulated free market run its course, we know where those 8,600 jobs will almost certainly go — probably in California, with maybe some in some other tech capitals around the country. Microsoft is based in the Seattle suburbs; Oracle is in Silicon Valley. In other words, the rich will get richer. What if the federal government conditioned any sale of Tik Tok to a commitment to put those 8,600 jobs somewhere else in the country? Trump hates Amazon. Here’s a chance to be the anti-Amazon. When Amazon went looking for a site for its HQ2, it declared a preference for metro areas with a population of 1 million or more. What if Trump insisted that Tik Tok’s 8,600 new jobs go to places with less than 1 million people? Or, better yet from our parochial point of view, places with less than 500,000 people? Trump could rightly say that he has single-handedly helped jump-start a new technology capital — or capitals, if there are multiple locations — in the American heartland. There’s more he could do, too. Tik Tok says its servers — the computers that serve up content to users — are located in the United States. Great. But we also know a lot of those server farms are in high-tech communities already. Northern Virginia is home to the world’s largest concentration of data centers, according to Data Center Frontier, and more on the way. Microsoft reportedly just bought 66 acres in Loudoun County for a new server operation. But Trump could mandate that any new Tik Tok servers go somewhere else —which would mean more jobs for rural America. Good-paying tech jobs, too.
Making one tech company locate in rural America won’t solve every problem. But it would dramatically show that not every tech company has to be located in one of the usual tech capitals. Biden could call for this. But Trump could actually do it. He has set a Sept. 15 deadline for the sale or he’ll ban the app (a move that, ironically, would get the attention of young voters in a way that Biden never will).
The clock is ticking. You might even say it’s going Tik Tok.
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