“Public Interest” Groups Pull a “Tommy” on Google’s Motorola Lay-offs

by Mike Wendy on August 13, 2012

Bloomberg reports today that:

Google Inc. (GOOG) will cut about 4,000 jobs at its Motorola Mobility Holdings Inc. unit, or 20 percent of the staff at the company it bought for about $12.5 billion.”

This is hard news for the 4,000 let go, especially in these tough times, cut by a company that preaches a mantra of not being evil.  That said, millions of jobs churn monthly in our “free market” economy, and though this is indeed crummy news, most of these workers will land back on their feet, hopefully finding new and better jobs as a result.   My thoughts are with them, however, having gone through these same circumstances a-time-or-two in my life.

As hard as it is for those laid off, it’s also hard news for all of those non-profits – such as Public Knowledge and Free Press – who support their benefactor, Google.  You see, they can’t tell the positive story – and there is one – from this not unexpected event.

You may remember back when AT&T proposed merging with T-Mobile, that these groups (and Sprint, a lay-off king in its own right) just couldn’t believe AT&T’s story that nearly 100,000 direct, indirect and induced jobs would result from $8 billion of new wireless investment being pumped into our economy from the new company.

They couldn’t fathom itSome reporters, tooOh, and let’s not forget the FCC, also.

A similar, “multiplier effect” is at play here, however.  Stated simply, the dollars and resources saved by Google will be plowed back into the company, making the new company stronger and more innovative for consumers (and shareholders).  Investment and resources, instead of being employed inefficiently, will go to higher, more productive ends.  This is not to belittle those workers who lost their jobs.  But, more than likely – if Google plays its cards right – more direct, indirect and induced jobs will come out of this painful event than the number of jobs that got displaced.  Way more.  This is not to mention any productivity benefits that the broader economy should experience from the ICT innovation brought about by the new company, which will also add jobs.

I know, the equation sounds counterintuitive and funky:  Displacement and disruption = more jobs and economic gains in the long run.  But, that’s how our resilient economy works (and, it does still work).

What’s truly funky in all of this is this: Why more reporters don’t call Public Knowledge and Free Press out for their selective use of economic principles and “understanding” – that is, how the groups roundly Mr. Hyde (as in Jekyll and Hyde) network providers that try to grow their companies and jobs through mergers, yet pull a Tommy when their primary benefactor, Google, does the same thing.

Google just shed 4,000 jobs in the real world because of their merger, yet the outrage has gone wanting.  Had AT&T done that, those paid-for “public interest” shills, as well as their reporter friends, would simply be freaking out with 40-point type headlines, screaming, “There, we told ya’ so!  AT&T CRUSHES American jobs with new merged company. AT&T is EVIL.”

This double standard speaks volumes.  Sadly.

It’s good for the economy that Google can do this, as tough as the job displacements initially are.  It’s bad for public policy and the economy when our understanding of job creation gets bent, perverted and hijacked by self-appointed “public interest” advocates who really have no greater interest than to serve their corporate overlords.

AT&T’s merger would have created more jobs.  Google’s merger will eventually do so, too.  Becoming Mr. Hyde for AT&T, and then suddenly Tommy for Google disserves this important debate, not to mention the groups’ credibility in the marketplace of ideas.

gator Dad August 16, 2012 at 12:59 pm

And the folks at the FCC and DoJ are a bunch of Pin Ball Wizards playing games with
our very fragile internet economy.

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