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What Silicon Valley millionaires need to crack into politics

Silicon Valley's highfliers often seem to be living an even more charmed life than their fellow one-percenters when it comes to public image.

You just don't usually hear the names of Mark Zuckerberg, Marissa Mayer or even Larry Ellison pilloried at your typical "Occupy" protest.

But so far, America's tech titans haven't been able to transfer their financial and public-relations successes into the political arena. And that's because a combination of powerful opponents and naïveté.

From left: Mike Honda and Ro Khanna
Source: Wikipedia, Facebook
From left: Mike Honda and Ro Khanna

First, let's assay the recent electoral body count: Former eBay CEO and current HP chief Meg Whitman famously failed to defeat Jerry Brown in California's 2010 gubernatorial election in what is probably the most famous example of a Silicon Valley billionaire coming up short even on home turf. Former HP CEO Carly Fiorina lost on the same day in her bid to unseat California Senator Barbara Boxer. But Whitman and Fiorina are Republicans who were running in the deepest of blue states and their chances weren't great no matter what industry they came from. Democrats are just not likely to lose any major races in the Golden State anytime soon.

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Two years later in 2012, Sean Parker told an audience at South by Southwest that they needed to take control of the political process with technology-aided crowd-sourcing efforts and social media campaigns. But that was pure naïveté. Reality is setting in for Parker and his peers, who now seem to understand that you can't win elections without good, old fashioned, cold, hard cash.

And that's why a better test is going on right now in the middle of Silicon Valley itself in the election for California's 17th Congressional district. The district includes Apple's Cuppertino, LinkedIn's Sunnyvale, and a big chunk of San Jose. It's been represented in Congress for14 years by Democratic Rep. Mike Honda. Honda will turn 73 later this month.

Some of Silicon Valley's biggest names, including Parker, Sheryl Sandberg and Marissa Mayer don't believe Honda understands the global economy well enough to represent the district and they're backing 37-year-old fellow Democrat Ro Khanna to oust him.

But Khanna is still facing a tough battle as unions back Honda. In big-city blue states like California, backing Democrats and socially liberal candidates is not enough when establishment Democrats are backed by election-savvy unions who just do not like or trust the Silicon Valley superstars.

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Silicon Valley companies are famous for not employing a huge amount of people, and they certainly have little need for the kinds of lower skilled on-the-clock workers that make unions what they are. Unless this somehow changes sometime soon, the Sean Parkers of the world will face stiff union opposition every time they dip their toes into the political arena.

Tuesday night, Khanna did win second place in the Congressional primary and the right to face Honda one-on-one in the November general election. Khanna still trails Honda by a significant amount in the polls, (Honda won about 50 percent of the primary vote to Khanna's 25 percent), but he's trounced the incumbent in the fundraising race with $3.8 million to Honda's $2.1 million.

It would be a surprise if Khanna can unseat Honda, but it should be a learning experience for Parker, et al, who should finally realize that big government groups and union power dominate liberal states and the Democratic Party. Not only is it impossible to win an election in California, New York, or Illinois without them, it's hard to get anything done at all.

Facebook founder and CEO Mark Zuckerberg should have learned that lesson when definitive reports came in showing his $100 million donation to the Newark Public Schools had been largely wasted by the unions, lawyers and consultants who infest the system. Sadly, he doubled down on the same mistake last week with another $120 million donation to Bay Area public school systems. The fate of that money won't be much different.

But Zuckerberg's big mistakes are not all that different than the money his peers have lost in their efforts to back political candidates. They too will see more failures, but eventually a Silicon Valley millionaire/billionaire will win a key elected office.

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The one ingredient Silicon Valley candidates really need, besides a little more experience, is candor. Silicon Valley's leaders should talk more openly about how they're the beneficiaries of some of the freest market capitalism in the world today. And they should talk about how that economic freedom would be a good thing for everyone in terms that go well beyond Google's almost laughable "Don't Be Evil" credo.

These superstars need to explain that the tech sector still enjoys relative regulatory freedom while so many other American industries have been strangled by regulations, taxes and high labor costs. Silicon Valley's biggest winners should promise to re-introduce their kind of economic freedom to other sectors of the economy and disparate regions of the country.

That's the kind of "spreading the wealth" message all voters can get behind.

So Silicon Valley's foray into campaigns and elections is still clearly in the beta testing stage, and that means there's more trial and error to come. But like all oil, real estate, and banking millionaires who came before them, they'll eventually break through on election day.

Commentary by Jake Novak, supervising producer of "Street Signs." Follow him on Twitter @jakejakeny.

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