Two Cities, One Industry: Big Tech, Power and Politics in Seattle and San Francisco (live)

[00:00:10] Hello and welcome to this special live joint taping of the GeekWire podcast, which covers tech news, trends and insights from the Pacific Northwest and beyond, and Blue City Blues, a podcast featuring smart guests talking about the problems facing blue cities and how to fix them. I'm David Hyde with my Blue City Blues co-host Sandeep Kaushik. Hello, Sandeep. Hey, David. And a big hello to this amazing audience here at the National Nordic Museum.

[00:00:41] So Sandeep, super fun that we're joining forces with GeekWire for this event for the first time. I think this is the perfect topic for both of our podcasts. Seattle and San Francisco are the bluest of blue cities. They share many of the same problems, many of the same strengths, and they're also the top two tech hubs in the United States. They are indeed. And you know, I will say I have now lived here in Seattle for just shy of a quarter century.

[00:01:07] And so I really do feel like I've had a front row seat to see how the rise of big tech and the tech economy here in Seattle has transformed this city. And not just its economy, but I'm a political consultant by day, but it's really impacted our politics and our culture as well.

[00:01:30] And the city I moved to in 2002, the kind of, you know, somewhat blandly, middle-brow, civically committed, somewhat provincial, backwater kind of bird that I moved to. You don't sound as nostalgic as I am. Yeah, no, well, you know, Seattle had its charms back then, right?

[00:01:51] But it was a very, very different city from what it is now, which is we are now the best educated blue city in America. We are the third most affluent big city in America. We are top three in terms of literacy ratings. We were just picked the fourth best city in the world by a ranking that just came out this week. And so we have become a global knowledge economy powerhouse.

[00:02:18] And to borrow a phrase I always borrow from Seattle Times columnist Danny Westy, we've been hit by a prosperity bomb, right? That was created largely by the rise of this tech economy. So with that, I'm really excited for the conversation we're going to have today with our all-star panel. And let me start by introducing them here. First, let me introduce my friend John Cook, the co-founder and publisher of GeekWire.

[00:02:43] Who, as far as I'm concerned, knows everything there is to know about the Seattle tech world. Welcome, John. Thanks, Sandeep. Glad to be here. And next, let me introduce Margaret O'Mara, history professor at the University of Washington. Also a former Blue City Blues guest. Who writes extensively about history, tech, and politics. I remember reading Margaret in the New York Times on these issues on a regular basis.

[00:03:11] And Margaret is also the author of The Definitive History of Silicon Valley, The Code. Silicon Valley and the Remaking of America was published in 2019. Margaret, thank you for being here. Thanks. And then finally, our third panelist is San Francisco journalist Jonathan Weber.

[00:03:31] Also a former BCB guest who has been covering the tech industry since he was named the LA Times first Silicon Valley reporter all the way back in 1990. So speaking of having a front row seat to see how tech has transformed a city, Jonathan has taken that as the author of a riveting new book that tells the story of how tech transformed San Francisco. It's called City on the Edge, Technology, Politics, and the Fight for the Soul of San Francisco.

[00:04:01] And believe me when I say it's a colorful, interesting, wonderful read that really tells a story about the evolution of a city. So Jonathan, thank you too for coming up and joining us here. Oh, thank you. Thank you very much. And that book is for sale, right, Jonathan? There at the back of the room, if anybody... I'll sign books afterwards. Yeah. Yeah. All right. Well, let's start with Margaret O'Mara.

[00:04:23] The last time we had you on Blue City Blues, we were talking about how the romance that had emerged between big tech and blue cities like Seattle and San Francisco had hit a rough patch in recent years with some big tech leaders like Elon Musk and Jeff Bezos saying, that's it, we're done, we're leaving. And some leaders saying, okay, bye. Bye. So part of what we're hoping to get into today is how can this relationship be saved?

[00:04:52] And we're going to start thinking like historians for the first few minutes here and ask kind of how did we get here? So I want to go all the way back to the post-World War II period when the Seattle area and San Francisco had a lot in common, including tons of highly skilled engineers, businesses that were on the cutting edge of technology, big research universities, tons of federal dollars coming in for research and defense spending.

[00:05:21] But Silicon Valley develops differently than Seattle. It starts this startup and venture capital system that you outlined in the code, whereas Seattle ends up becoming a Boeing company town, essentially. So why did these two cities develop so differently? Yeah. Well, I think that one way to think of it is that Seattle built big, meaning airplanes, big things.

[00:05:44] And the Valley, particularly the South Bay, so this is not, you know, San Francisco at this point is not part of Silicon Valley in the 50s, 60s. It built small. It specialized in small electronics and communication devices, which turn out to be the building blocks of all the various devices we have scattered around this room were in our pockets, right?

[00:06:04] And that also was – and also the venture capital, the high-tech venture capital industry started concentrating in and around there, in part because that was the only way that these companies could get any sort of funding for these kind of esoteric, very expensive, strange things that didn't yet have a commercial market.

[00:06:20] But one thing that, you know, interestingly enough, even though Boeing was both a federal – wasn't as a government contractor, military contractor, and a commercial airline airplane maker, in the Valley, particularly in the 50s and coming, you know, really through the 1960s, the main customer was the Defense Department.

[00:06:39] It was – and the space program was part of that, building, you know, small devices like transistors and integrated circuits that could go into rockets and missiles and send them up into space or long distances. So that was, I think, a really sharp contrast.

[00:06:56] And you kind of have this private sector streams of funding, these VC firms that are playing with other rich people's money and investing in these small startup companies and a network of these companies, particularly semiconductor companies, is really seeded by the middle part of the 1960s. Let me follow up on that question, Jonathan.

[00:07:18] And I think one of the things – one of the many things I loved about your book was you tell a story about San Francisco and what it was like in the late 80s coming into the early 90s when you first see the rise of the internet and this kind of tech culture in San Francisco. Very different city back then. Yeah, it was very different. As Margaret said, the technology industry really grew up in Silicon Valley, south of the city.

[00:07:42] When I got to San Francisco in 1990, there was essentially no tech in the city at all. There were a couple of tiny companies. The city economist's numbers showed that 2% of the city's workforce was in tech in 1991. And the city, as you all know, is known for many other things. It was the birthplace of the counterculture and had a very, very lively music scene and art scene and underground culture scene.

[00:08:11] And the city was not very expensive, which was part of why it attracted a lot of artists and others. And there were some very powerful cultural things that were fairly unique to the city, namely the gay community in the Castro and leading the gay rights movement. And so there was a lot happening in the city in the wake of the counterculture. Not all of it good by any means. There was Jonestown. There was AIDS. You know, a lot of horrible things.

[00:08:38] But there was also a lot of cultural ferment in the city. And it was really just, you know, tech was just something that happened, you know, down south, over there, not really part of the conversation. And in fact, when I showed up in the Bureau at the time, the LA Times had about eight people in San Francisco and very senior correspondents. And, you know, they were prestige jobs. And I was kind of the junior guy covering this super boring tech thing that nobody cared about. And they're like, yeah, well, I guess it's nice that you're here.

[00:09:08] But if you're the Silicon Valley correspondent, what are you doing here? Like, this isn't Silicon Valley here. So that, you know, so that was the start. And things really changed big time. Hey, Blue City Blues listeners. We've got a special event coming up later this month for folks who live in Seattle. It's called Two Cities, One Industry. Big Tech, Power, and Politics in Seattle and San Francisco.

[00:09:34] A live taping of Blue City Blues and the GeekWire podcasts at the National Nordic Museum featuring historian Margaret O'Mara. She's at the University of Washington. And she's the author of The Code, Silicon Valley, and the Remaking of America. We also have GeekWire's John Cook and journalist Jonathan Weber. He's got a newish book out called City on the Edge, Technology, Politics, and the Fight for the Soul of San Francisco.

[00:10:00] So the conversation is going to look at how these two different cities became the twin capitals of tech and how the relationship between big tech and local governments that host tech continues to evolve. Recorded live for both podcasts, Sandeep and I are going to be asking some questions. So check that out. September 29th, starting at 6 p.m. We'll put a link in our show notes if you want to get in on that. And we hope you can join us. Thanks.

[00:10:30] All right. So John Cook, let's talk about Microsoft. Moves here to Bellevue, right, from Arizona. Albuquerque, New Mexico. It's New Mexico in 1979. Same year Alien is released, just coincidentally. Good fact. And I guess the question is just how does Microsoft fit into the story that we're hearing today? And how does it start to change the Seattle area? Yeah, I think it's an important part of our history, certainly.

[00:10:58] And I think it's worth mentioning that Microsoft actually started in Albuquerque, New Mexico because it didn't have to be based here. And it was a really a little bit of serendipity that the fact that Bill Gates and Paul Allen just happened to be from here and decided to move back to their hometown. I think Bill Gates Sr., Bill G.'s dad had a lot to do with that. He was a very prominent lawyer in town. His mom was very well connected as well, a very power couple in Seattle society.

[00:11:26] And having those sorts of connections and roots when you're starting a company matters. And they were able to leverage those connections in their hometown in new and creative ways. I think they got more horsepower here than they would have if they would have stayed in Albuquerque. But, yeah, we could be talking about the tech hub of Albuquerque, New Mexico, had it not just been for the fact that Bill Gates and Paul Allen were from here. So luck has a lot to do with this.

[00:11:51] As Microsoft took root here, and I know Margaret can share some details here on the contrast with San Francisco and Silicon Valley, the tech community really became in Seattle about Microsoft. It was a one-company town as it related to tech versus Silicon Valley, which had the venture capital ecosystem, startups cropping up, just a vast array of companies. Seattle was very much a Microsoft place.

[00:12:19] And the rub on Seattle 30, 40 years ago was, yeah, you could take a job at Microsoft and get into tech. But if you get laid off or you just don't like the culture, there's nowhere else to go in the Seattle tech ecosystem. It was really a solo company. And you saw a lot of rivalry between the Borg of Microsoft versus the upstarts of Silicon Valley. And it was a big-time rivalry, probably most manifested in the Steve Jobs-Bill Gates rivalry in many ways.

[00:12:47] And so that's a really unique part of the story because we look across the Seattle tech ecosystem now, and it is so diverse in terms of the number of companies that operate here. Not only the homegrown companies like Microsoft and Amazon and Expedia and T-Mobile, but what we've tracked at GeekWire over the last really 10 to 15 years is this influx of Silicon Valley tech giants that have established very large operations in the Seattle area.

[00:13:16] So now we have an extremely diverse tech ecosystem here that goes beyond Microsoft and Amazon. So let's get – oh, I'm sorry. You know, in talking about Microsoft and their arrival here, it reminded me of a funny anecdote. And it's pretty because it's hard to recognize today how back in the 90s, even when these companies were already starting to get big and powerful, but the tech industry was a completely different animal. It was much, much, much smaller.

[00:13:45] It was not the most important industry in the world. Most people were not interested in it very much. They had – people had computers at home that they used as typewriters, and that was mostly it. And Bill Gates was already – Microsoft in the early 90s was already very dominant. Bill Gates was already a rich guy. But he was not the Bill Gates we know today. So he – and I went to interview him in 1992.

[00:14:12] And he – and it was a – I remember weirdly it was a Saturday. And I went into his office and there were no – there was just one secretary there, but, you know, there wasn't really people around. And I went in and he – and I wanted to ask him about what was then the new FTC investigation of Microsoft. He literally spent the first 10 minutes of the interview telling me what an idiot I was for thinking that this was even an issue. If I knew anything about anything, I would know that, you know, this was stupid. Why was I even asking about this thing?

[00:14:42] You know, he was so obnoxious. Then somebody came in with food, like, for him, no food for me. He sat there and ate sloppily, you know, while I talked to him. But I was just blown away, you know, at how antisocial the guy was. And then, of course, now, you know, he's had a huge personality makeover. Well, join the ranks of people who have been – especially Microsoft exists – who have been, you know, touted as saying, you know,

[00:15:06] the dumbest person in the room or the stupidest idea I've ever heard because it was legendary Bill Gates lore of him talking to people that way. This kind of brings us to the 60 Minutes interview you were bringing up earlier, Margaret O'Mara, with Bob Simon talking to Jeff Bezos in his office in 1999. You can see this. I looked it up. I watched it just before coming over here.

[00:15:29] At one point, he's walking towards the office and Bob Simon says this office is, quote, just past the pawn shop and porno parlor in Belltown. And the office looks more like a college dorm than a corporate office. And it's just such an interesting moment, right, because tech is – it's generating a lot of money. I mean, he is a billionaire many times over and he's living in a college dorm-like office. So it's this moment where tech hasn't really remade Seattle yet, right?

[00:15:57] These companies are there, but they haven't reshaped the cities as much as they end up doing. Yeah. And Amazon was an outlier in that it – I mean, it started in a garage in Bellevue briefly, but it quickly moved to Belltown to this classy space on 2nd Ave between Pike and Pine, which was – yeah, having a hard time. But mostly because it was looking – he was looking for cheap real estate.

[00:16:20] And, you know, just building on Jonathan's earlier point, like, you know, Silicon Valley was, you know, 30, 40 miles away from San Francisco. It was very resolutely not urban. Microsoft was in Bellevue and then moved to Redmond, built a suburban campus that was its own kind of bubble far away from the city. So the idea of an urban tech when Amazon is in the 90s in Seattle was really highly unusual.

[00:16:45] So you had these – it was very separate from – and so even, you know, at that point in San Francisco, the dot-com era did bring some, you know, startups to San Francisco and a little bit of that. But I remember I was living in San Francisco then and there was a lot of commuting down the 101 and 280 to wherever one worked. There was very little in the city.

[00:17:06] So, you know, there was a – you know, to your point about kind of these companies not really catching up to their – to the wealth they were generating, they also were not in any way attending to the urban environment around them. And part of the culture of tech has been we are heads down, locked in, building products, shipping product. Our business is great engineering, great software, great hardware. That's what we do.

[00:17:31] We don't worry about the potholes or the city council or the, you know, what's around us. It's a – it's this, you know, it's part – it's baked into the culture. I mean, businesses generally are, you know, don't kind of – startups don't start – whatever industry you're in, you don't start up saying, well, I care about, you know, what's our – what's our – how do we feel about public policy? That always is kind of this afterthought, particularly locally.

[00:17:53] But the tech industry in particular has kind of – and this is a Silicon Valley culture, you know, that was very much – and it was a product of growing up amid a bunch of orchards in quasi-rural California in the 50s and 60s where there weren't other things going on. You had two bars to go to. You had one restaurant. It stopped serving at eight. And, you know, you were just there working on your thing and working all the time.

[00:18:18] So I think that is something that's a really important foundational thing to understand when we're thinking about the cities that now have tech as these huge employers, as having these big physical footprint in the city and having ripple effects on all sorts of things from traffic all the way down. Well, you know, I placed that issue of sort of the city versus the suburbs and I was talking briefly about the culture in San Francisco in the 80s and the 90s.

[00:18:48] And I argue in the book that it was really the culture of the city that drew the dot-com era of companies to San Francisco rather than the valley. And that also had a lot to do with the shift in the technology. So you had the growth of the arrival, really, and development of the World Wide Web in the early 90s. And that was the start of the Internet revolution. And that was a different set of skills, actually, and a different type of person that was involved in that industry.

[00:19:16] So the dot-coms, they involved design and marketing and images and sound and music, you know, other things. It wasn't like the bits and bytes of the semiconductor world. So it was a very different, like the cliche of tech is the engineer with the pocket protector. But the people who kind of made the dot-com thing in the 90s were not really those people, actually. Yeah, the sense of place is really interesting as it relates to cities versus the suburbs.

[00:19:46] And I thought you saw this play out really interestingly in Seattle. When Amazon, they were moving locations and they were at Belltown and then Pioneer Square or Soto. But I thought they were most perfectly positioned in Seattle when they were up on Beacon Hill in the old Art Deco building, completely isolated from the rest of the city. And, like, no one really knew what was going on up there. They were doing their own thing. And when things really shifted for Amazon is when they decided to plant themselves in the middle of the city.

[00:20:13] And then things accelerate and then these problems start to come in and Amazon starts to get blamed. I don't think they would have the physical space to stay up on Beacon Hill. Otherwise, they would have taken over the entire hill. But that transition from Amazon on Beacon Hill isolated to the middle of the city is a really interesting progression. And that starts in 2010, right? The first employees start occupying Amazon offices in Belltown in 2010.

[00:20:43] And boy, yes, does it change the city. But Jonathan, let me ask you, let's start the clock a little bit back. Because in your book, you talk about this first era and the first Internet, World Wide Web pioneers in San Francisco. And they're pretty countercultural. They share a lot of the culture of the old, you know, hippie San Francisco. They're open source. They're not in it for the money. This is about a vision of creating this kind of brave new world that they intend to create.

[00:21:12] They see themselves as pioneers. But that changes really fast, right? By the mid-90s, the VC money is coming in. Companies are going public. Fortunes are being made. And by the late 90s, you say in your book, a backlash starts to begin in San Francisco. And so speak to that a little bit. What is the dynamic? Yeah. So there was the dot-com bubble was a remarkable phenomenon, which I was the editor of a magazine called The Industry Standard.

[00:21:42] And we were actually both the chroniclers of the dot-com boom and bust. And we were also an example of the dot-com boom and bust. So to give you the numbers, we went from a standing start in 1998. We launched the magazine. And in the third year, we had $140 million in revenue in the third year. And then we went bankrupt in the fourth year.

[00:22:08] So that was a pretty typical arc of companies in that era. And as Sandeep said, you know, the early part of the decade was really a super idealistic time and really creating new things and the idea of a new economy. And companies were going to be more fun and less hierarchical and more collective in their actions and all kinds of good things. And people really believed in that.

[00:22:35] And I think even in the bubble period, so Netscape went public in 1995, still referred to in the venture capital world as the Netscape moment when people realized that this was the biggest opportunity ever. And so certainly in the late 90s, you had the financial bubble. But there was still actually a lot of optimism underlying that.

[00:22:58] You know, so a lot of people who, you know, including our company, like we had stock options and I nominally had a few million dollars. You know, but it was not like I told everyone, like, don't count that money. Like, don't be here for that because that may be real, but probably not. But people really were having a lot of fun and there was a really powerful current of idealism that this is going to be kind of a good thing for the world and for humanity.

[00:23:24] Now, when the thing accelerated and prices started to soar, that created the first backlash in San Francisco against the tech invasion, as people often called it. And especially in the Mission District neighborhood that was particularly changed by this, there was a lot of pushback and die yuppie scum, you know, written on the walls and stuff.

[00:23:50] But that, and I'll stop here in a minute, but that actually, the backlash that began there, then the 2000s changed. It was much quieter. But then the real backlash came later in the 2010s. Let's bring it back to Seattle first with John and then Margaret. I wonder if you could just give us a sense of the scale of the change that happens in Seattle after Amazon really moves in.

[00:24:12] There's a point at which there are like 10,000 jobs being advertised at one time, not warehouse jobs, but high-paying jobs, 10,000 job ads in Seattle. I mean, this is recent history. Probably most of us in this room remember it. But can you just give us a sense of that change for folks that don't know? Yeah, I mean, you're really going from an upstart company to a multibillion-dollar corporation with tens of thousands of jobs. I think – I don't know what the exact number is. I think it was over about 50,000 jobs now in the Seattle area.

[00:24:42] 15,000 of those roughly now for Amazon are in Bellevue, which gets into the modern-day part of this story is that you now see Amazon playing Seattle versus Bellevue in part because of fights between the political establishment and Seattle. And so you see a shift of jobs to Bellevue. But, yeah, the region was really transformed. And as I said earlier, this transformation from Beacon Hill into the middle of the city really changed the dynamic and the relationship that the community had to Amazon.

[00:25:12] I think historically people had this view of Amazon as – a lot of people are proud of the companies that grow up in their backyard. And Amazon wasn't a big chemical producer or creating weapons or some things that you could probably get really angry about. They were actually delivering your goods and your packages in record time, and people loved them. But there was a moment where things did start to transition in Seattle as it related to the relationship to Amazon.

[00:25:42] And there was a massive backlash, and we still see this to today certainly. And I think it's both – it's hard to find fault on this because I put blame on both the side of public officials and Amazon at the same time as to why this occurred. Why did this have to happen? Why couldn't these two forces get together and just make this ideal city together?

[00:26:06] I think you had a company in Amazon that was, as Margaret and Jonathan were mentioning, kind of these libertarian values. You know, we're doing enough by just bringing our jobs to the city. And that was certainly the ethos of Jeff Bezos. And you had a progressive city that wanted more and saw the changes and saw the prices increasing. And those two philosophies just collided in Seattle in real time.

[00:26:32] And we're having the reverberations of that still to this day based on our political establishment that we have. And so I don't know if there was one moment that led to this, but it was over time. I do think it was that headquarters move into the middle of the city where people – it was just so on the nose. And all these new transplants came into the community. And when was that? What year? This is 2010 to 2020. Yeah, 2010 to 2020. Yeah, but a 10-year period.

[00:27:00] Because I also think that there was a big shift nationally in attitudes towards technology in the middle of the decade. Right? That around first it was the Snowden revelations. Then it was the election of Trump. Then it was Cambridge Analytica and the Russia scandal and all that stuff. And so you saw a big change in public opinion towards big tech and towards tech companies right around kind of 2015.

[00:27:26] And my perception in San Francisco was that that compounded the resentments around the higher prices and other things that tech was building. So it was kind of a double storm of kind of local complaints and also a bigger vibe feeling of like, ah, this tech thing maybe isn't so great. And then accelerated – and Margaret, I want to hear your historical perspective here for sure – but then accelerated even more in Trump's second administration.

[00:27:56] Then you saw the tech pros and the tech infrastructure kind of switch allegiances from a more progressive view in some of these blue cities to the Trump camp and some of the fringe elements of the venture capital and startup and tech ecosystem that were deeply aligned with the Trump administration getting a lot of power as a result.

[00:28:18] And now there's even more momentum behind this anti-tech idea in part because of Trump's election and the people in the tech industry that have risen to such levels of power. Sandeep's got a question for Margaret here. But also there's that 2019 election in Seattle where Amazon puts its finger on the scale and tries to tip the balance. And there's a huge backlash. And people don't know who they're voting for. They're voting against Amazon. Yeah, yeah. Yeah, well, they were voting against what was seen as the excessive influence of corporate and tech power in our politics.

[00:28:48] So let me bring it to this question of this happens, right? Amazon comes downtown. They've got at their peak 60,000 people employed in the city of Seattle. Amazon occupied at their peak in Seattle more office space than the next 40 largest employers in the city combined, right? I mean, to get a sense of the scale of what they were doing.

[00:29:12] How does municipal government grapple with what's happening here in Seattle, what's happening in San Francisco with the gentrification, the rising rents, the, you know, all of the kind of downstream impacts of the new prosperity that tech is bringing to some people, but not everybody. So, Margaret, why don't you start?

[00:29:34] And, you know, what's your take about kind of how that interplay between the tech business world, the libertarian ethos intersects with the progressive politics of these places? It's a yes and. Historians, we often get things, you know, we always have this, it's always complex causality. It makes us bad on cable television because we never have one thing to say. Yeah, right, yeah. But that's really what's going on.

[00:29:58] It's a national phenomenon of the supersizing of tech, which really accelerates after the financial crisis of 2008, 2009, where all of this money in the sloshing around the globe looking for a home starts going into the tech industry. The valuations get enormous. The headcounts get enormous.

[00:30:14] Not only is Amazon adding tens of thousands of employees in the Seattle area, but Facebook and Google and you name your big tech company are opening huge, you know, facilities here and hiring thousands of people, too. So Seattle's tech employment headcount, I mean, John, you probably know this off the top of your head, like, is just skyrocketing. Amazon is the biggest of the big. Microsoft is growing.

[00:30:39] Microsoft is having its Satya Nadella renaissance and is, you know, expanding, too, in the city as well as in Redmond and in Bellevue. So there's all – and this is, you know, where this meets municipal reality is San Francisco and Seattle are places with limited housing supply, both because of laws, policies, zoning, and land mass.

[00:31:05] You know, I crossed four bridges to get here tonight. I'm just a reminder of, you know, it is – there is – you only have room on which to build, you know, certain – only – and as – when we were – my husband and I moved to San Francisco at the peak of the dot-com boom. We moved into our apartment the day the NASDAQ hit its highest number, and then it was all downhill from there. But as his boss at the time said, it's expensive in San Francisco because everyone wants to live here.

[00:31:34] And that was back in 2000. And it's true in Seattle and San Francisco, too. And tech has accelerated that, and people getting big salaries are able to, you know, buy into the market. And the people who were already here or other people who want to come and just do something that's not in tech don't have the opportunity.

[00:31:50] And as this bigness is happening, and particularly the middle of the last decade as the news items you mentioned, Jonathan, you know, and including, I think, particularly this one to 2016 Brexit then Trump election where social media is suddenly in the spotlight as did this make the difference? And it's also happening at the time that these people are getting extraordinarily wealthy.

[00:32:17] So to circle back onto, you know, this interesting political thing, the techno-libertarianism of tech has contributed to, hey, we just brought you all these jobs and we're really successful and you're penalizing us for this. And also it is a kind of strain, not to say that politics haven't changed, and I can talk more about the, you know, the grumpy middle-aged Gen X billionaires that seem to have, you know, decided that everyone's against them.

[00:32:47] But that techno-libertarianism, this sort of idea of, you know, tech is going to solve these things and the presence of tech is essentially a good thing and we're changing the world for the better. That was the ethos of the Obama era, Silicon Valley, which was very tightly allied with Democrats at the national and at the local level. It is the, that ethos is still present in the Trump era.

[00:33:07] It is, but, you know, part of the turn towards Trump by some of the, you know, the handful of people at the very top who have so much wealth and power, they matter a lot, is partially because during the, particularly during the Biden era, that suddenly the Democrats weren't just saying, go, go, go, go, go up and to the right. We love everything you're doing. We need more Silicon Valley thinking in the world. And they're getting pushback and they're getting public pushback. And that was something that was unusual.

[00:33:35] And they, you know, the tech people just really couldn't stand Biden. You know, and it wasn't just Biden himself, but the people around him, you know, he felt they didn't understand tech. They didn't care about it. They, they just didn't get it and they couldn't really have a conversation with these people. And so that, that came through a lot in, in, in my conversations.

[00:33:59] And I always regarded the politics of the industry as being like, there was always, there was kind of a liberal, libertarian strain, but there was also a kind of a liberal, like rights-based, like we don't care if you're gay or trans or whatever, you know, right. Very, you know, kind of rights-based liberalism in that way. But the politics was always pretty lightly held. People weren't very political. So they were, they supported Obama. They liked Obama.

[00:34:28] Who could, everyone liked Obama, right? So they liked Obama. You know, they were going to reluctantly, they reluctantly supported Clinton because, Hillary Clinton, because that's kind of what you did with the exception of Peter, Peter Thiel. So, but it was a kind of a default posture.

[00:34:44] And then when they got, when things kind of got really rocky and they got very alienated by, by the Biden administration and then all the chaos of COVID and then that sort of habit of being a Democrat, it's like, oh, actually, no, we could actually vote for this Trump guy. He's going to, you know, make us more money. It's not ideology. It's business. And look, these are, we're talking in many cases, leaders of publicly traded companies that their job is to be accountable to their, you know, shareholders and make the share price as high as possible.

[00:35:13] So there's also this, I think, going back to the question of kind of municipal tensions and also responsibility of big corporate employers. And this extends beyond tech, kind of this, you know, what is the, who is responsible for filling the potholes or for improving quality of life?

[00:35:29] I think another really important background is, is public sector austerity and the lack of public funds or, or the public will to, to, to kind of create quality of a broad based quality of life. It is no coincidence that the tech industry has grown large in an era of nationally and, and a state and local level where taxes are going down and, and, and profits are going up or there's less regulation.

[00:35:59] In 1978, California passed Proposition 13, which capped property taxes and essentially starved localities of revenue. 1978 is also, you know, the year that the consumer facing, you know, personal computers and video games are really just taking off. Silicon Valley is kind of grown up in that world and in that state of, of public spend, you know, of austerity where, where the public sector isn't delivering at the local level as much as it could.

[00:36:26] Well, and I think, you know, one problem that San Francisco has, as was noted, it's a, it's a very small city. It's geographically small. It's small in population. It has 800,000 people. And, and so the city itself is actually not, I mean, the city has a lot of money. The city has a budget of almost $18 billion a year now, which for a city of, of 800,000 is like a lot.

[00:36:51] But, but still it can't deal with these big social problems as a city. You know, it just can't. It has to be a state or national level thing. I mean, housing, homelessness, mental health issues, you know, that there's only some, you know, the city currently has about 16,000 people who live in supportive housing, you know, which is a lot. That's an expensive thing. Like how, you know, are we going to build another 20,000 units of supportive, you know, it's just not realistic.

[00:37:20] So the, this, the city isolate can only do so much. And when you, and the companies are like, we pay these taxes and, you know, there was the Twitter tax rate, which I can talk about. But the, but the basic dynamic is a company can move two miles and avoid whatever taxes the city wants to impose. And so that, you know, that's a real handicap for the city.

[00:37:42] All right, John Cook, let's, let's bring it to Seattle and let's kind of think about the last decade or so, starting with, well, it's more than a decade, but Mike McGinn. Then who do we have after that? Was that? Ed Murray. Ed Murray, right. Sandeep was there with Ed Murray. Then Jenny Durkin, Bruce Harrell, now Katie Wilson. So how do tech leaders think about these mayors that we've had in Seattle? Do they feel like they've been getting good leadership here? You've talked to folks. What do you find in your reporting? Short answer, no. Yeah.

[00:38:12] Not getting good leadership. Joe Wynn from the Greater Seattle Chamber just penned a column, an essay this week after his experience down in San Francisco. And that was his main point was we just don't have the leaders here to take us forward. And I think historically there has been this big disconnect between the tech community, the business community as a larger part of that, and the political establishment.

[00:38:38] And, you know, you talk to a lot of people in tech these days and they're like, hey, we can't even bring our people into the offices in downtown Seattle. It's our employees are afraid to walk on the streets, you know, and like basically get your house in order, city, before you start telling us how to live our lives. And I think this isn't just a libertarian tech ideology.

[00:39:02] I mean, you've seen people like former Governor Chris Gregoire come out and say the problem in Washington state is there's, you know, it's not a revenue problem. It's a spending problem. The budget has accelerated. And business people look at that and they're like, wow, we're paying all this money. You're levying all these new taxes on us. I mean, Todd Bishop here, my co-founder, and I were just talking about a tax story today.

[00:39:25] And like we got confused on it because there have been so many different taxes levied on businesses over the last couple of years. It's like we were getting all twisted up on was this the capital gains tax or the millionaires tax? And it's like businesses feel that and they're like, in the meantime, fill the potholes. Clean up the streets. We're paying all this money. We're doing our part. And so there's a big disconnect.

[00:39:50] And you can't blame them for feeling that way when you look at the revenue numbers that are coming into the state largely based on the tech economy that's driving a lot of those dollars. And we're just not seeing the action. And so that's the real disconnect, I'd say, at this moment.

[00:40:07] What has been interesting in the last really just couple months, something that I've observed is that you see, and I mentioned Joe Wynn from the Greater Seattle Chamber, Chris Gregoire, Brad Smith at Microsoft, others who have really started to come together. And we've talked about this on the GeekWire podcast in recent weeks where there's a change in mentality in the business and tech community where they're going on offense.

[00:40:32] They feel there's a vacuum and a gap here based on this lack of political leadership that they're going to try to step into it. And they're forming coalitions and they're allying to try to bring their resources together to get their viewpoint out there a bit more because they feel like they've been under attack for so long.

[00:40:50] And so this is going to be a really interesting thing to watch in Seattle in the coming months and years is whether this business and tech community, which has largely been absent, can coalesce and come together and fill a political void. I think one of the things Sandeep and I've been learning on Blue City Blues is there is some reason to be jealous of other cities. If you look at Boston, which has a very progressive mayor, Michelle Wu, she seems to be doing an amazing job. She's very popular down in San Francisco.

[00:41:17] Daniel Lurie and some of these other mayors are doing a better job. Seattle has this incredible tech talent. But I don't know, whatever your politics, were you super excited about Bruce Harrell as mayor? I mean, I wasn't, to be honest. And I think that Katie Wilson just doesn't seem to have a lot of experience either. So I hate to offer my opinion here at all, but that's my opinion. I just wanted to let you know that we have questions being taken in the back. So I hope folks are writing those down because we're going to go to your questions in just a minute.

[00:41:46] And Sandeep, David, I just wanted to piggyback quickly on mayor conversation because I can't let that go because I think it is a big point. One of the big jobs of mayor, in my opinion, is to be the chief cheerleader of the region and the city and what you're about. So much to cheerlead here in Seattle when you look around, even with all of our problems. And for whatever reason, the last few mayors have been unable to do this basic task of the job. And I feel it's a complete miss.

[00:42:14] I was just down in San Francisco last summer for the Debt and Company concert at the beautiful Golden Gate Park. Who was out there? Mayor Lurie welcoming 100,000 people saying, San Francisco's back. Basic message. Have fun in our city. How hard is that? And it was fun. And the city, and I was just there this past weekend, the city is cleaned up compared to my past visits. Well, Cup here was a huge success. Yeah.

[00:42:41] Well, Lurie has been very successful with really a lot of very basic things. So being the chief cheerleader has been huge. It makes people feel good. He's got a very good social media team. So he does these great videos. And he's just kind of the man about town. And he'll go to any ribbon cutting, any store opening, whatever. He's just out there feeling good about San Francisco. And that makes a lot of difference.

[00:43:07] Even though he's a billionaire, he comes across as a kind of a regular San Francisco guy somehow. And I actually compare him. Well, that's kind of a regular San Francisco guy these days. Yeah, well, that's a good point. That is a very good point. And people perceive him to be on the right side of the Democratic Party. But I actually compare him to Mondami in New York as a person who his kind of spirit as the leader of the city has just done a huge amount in and of itself.

[00:43:38] And he is doing the small things, as you said. Yeah, he's a lot of low-hanging fruit. You know, he's done a lot of basic stuff. He's brought in some good technocrats to, you know, help solve certain kinds of problems. And then on top of that, you know, the city was just very fortunate because they – or he was very fortunate as a politician because he arrived in office right at the beginning of a giant financial boom. So he, you know, he just gave all the public employees like a huge raise. You know, they're already well-paid.

[00:44:05] And he just gave him a huge raise because he's like politically, you know, he's just bought off everybody and the city can afford it because of the AI boom. So that's a nice spot to be in if you're mayor. Can I add something here? I think this is a really important point, like thinking about the things that don't have to do particularly with like economic development is classically defined. So when people – I've been asked a lot over the last couple decades, you know, what's the secret to building a high-tech hub?

[00:44:34] And I think it comes down to three basic things and it even kind of transcends high-tech, kind of places of innovation over time and millennia. One is you need capital. You need money. You need resources. The second is you need institutions, universities, places, sandboxes where people can play around with ideas and where they can get educated and all that sort of thing. Like Stanford or the University of Washington. Yeah, Stanford, University of Washington. You know, it's very hard. You can't really find a high-tech hub anywhere that doesn't have a significant research university in the mix.

[00:45:04] And then the third is quality of place. And this is the really mushy thing. And it doesn't necessarily have to mean kind of classic, you know, you can go, you know, hiking and water skiing in the same day, but you can in some places. But the things that draw people in, for people who have the choice and the mobility to live, you know, different places, it's something that draws them in and keeps them there. And it can be a whole host of things.

[00:45:33] It can be, you know, affordability, kind of quality of life. It can be is this fun if you're in your 20s or there's like lots of fun things going on in the city. The World Cup in Seattle was really, really fun. Like being down in Pioneer Square in downtown then was really fun. We can't have the World Cup every day. But those types of things are, if I look over time and space and place, that's the common denominator.

[00:45:59] So these things like public safety, these things like showing up at the Dead and Company concert, the things that are people, getting people excited to be in the place and feeling, you know, safe and secure and feeling like they can build a life there that's going to be a good one. That's really important. So let me ask about AI, right? You mentioned the AI here. Sandeep, let me correct you. Super intelligence. That's right. Rebranded.

[00:46:29] The end of the world. Didn't you get the memo? Yeah. The end of the world. I was talking to a friend at Microsoft a couple months ago. He was telling me, look, cloud computing, right, was a massive driver of just a wave of technological innovation, but also wealth. And leading that charge, both Microsoft and Amazon, huge players in the cloud computing world over the last decade.

[00:46:56] But he's like, now there's this new thing, AI, that's rising up, that's likely to be, it already is the next big thing in tech. And he was saying to me, look, we're number two in Seattle. San Francisco is number one for AI in terms of all the innovation and development, what's happening. We're number two, but we are a distant second is the way he put it to me.

[00:47:20] And even for Microsoft, our best AI minds are really in California. They're not up here. And so what does that bode for the future of Seattle 10 years from now if all the cool AI stuff is happening down there and not up here? Right. So, you know, he's at Microsoft. He's got a point of view. He's trying to trying to make a case to me. But I want to ask about that.

[00:47:46] This does seem like we're seeing all these layoffs in Seattle right now related in part to the rise of AI and companies kind of shedding workers they don't need anymore. At the same time, Washington state had the highest GDP growth in Q1 of 2026 of any state in the country. Right. I mean, it's not like we're not making someone's making bank here, even as we're doing these layoffs and stuff. So let's so let me just ask this question.

[00:48:13] Like how much of a disruptive force is the rise of AI? What does it mean for San Francisco and Seattle? And is this the end of the world or not? Got any more questions? Just three. Yeah. Jonathan, you want to start? Yeah, sure. I mean, certainly San Francisco is the capital of AI by far and away.

[00:48:41] Really just by the serendipity of, well, open AI, which grew out of the ecosystem. But the fact that open AI was founded there and then Anthropic, which is a spinoff of open AI. So the two most important companies are in San Francisco and aren't going anywhere. And so that's been a huge boon. I mean, the issue for San Francisco really is that it's like too much. I mean, there's a mansion shortage. So, you know, you got $10 million.

[00:49:11] Well, you know, it's a little rough actually to find a place. It's a small mile in. And so this is a real issue. I mean, rents, you know, have gone up 20% in the last year. Okay. So and again, it's a small city and the housing problem existed even before AI. So that's going to create some disruption. You know, the wealth bomb disruption times 10, you know, is coming to San Francisco. So that's going to be a big issue.

[00:49:38] I think the more meta issue of like AI, I mean, I think it is going to be hugely disruptive. I think it's going to cause a lot of layoffs in the tech industry, actually. And, you know, I'm not really a believer in the existential risk in the sense of, you know, the paperclips are, you know, going to take over, you know, that I'm sorry, you might not be familiar with the meme, but the idea that AI is going to take over somehow and do things, destructive things that we don't want it to do.

[00:50:08] I don't really believe that. But I do believe that AI in the hands of bad actors is super, super dangerous. And we're not really positioned to deal with that. As it relates to Seattle and its position to the Bay Area and the rise of the AI economy, I think it's important to keep in mind that Seattle has always run second to the Bay Area. And we often have this inferiority complex in Seattle that, oh, we're not quite the Bay Area. I think we got to give up that narrative. Like, who cares?

[00:50:38] Like, they are their own thing. We're our own thing. Being the number two tech center is important. And we have our own DNA. We have our own way of doing things here that runs a little bit counter to the Bay Area. And I think that's a good thing. I saw my friend Pete Hanning here in the room. And he was always trying to brand, when he worked at the Fremont Chamber, the Fremont area where GeekWire's headquarters are located, the Silicon Canal.

[00:51:04] And I've always, I've all, and sorry to give the shout out here, Pete, but I've always resisted this idea that we were Silicon anything here. First off, we don't do a lot of Silicon in the Seattle area. Secondly, like, we're our own thing. We're not the Silicon Prairie. We're not the Silicon Forest. I don't know. There's Silicon everything. It's all over the place. I was always proud of the fact that we're Seattle, you know, and that's what we are. And we can be different, you know. And, but if you look at the numbers, just raw numbers of money going into venture capital

[00:51:34] and especially venture capital into AI at this point, I mean, it is an astronomical difference. And it's hard to compete against that. The money center there, the talent center is there. They have the flywheel is going around AI. That said, we're still going to pick up things as a result because what we've done over the last 40 to 50 years here is import some of the smartest people on the planet.

[00:51:58] And they do like staying here, Margaret, because they can ski and water ski and be in the mountains and on the water. And those people often don't want to leave. And so what happens is these big Bay Area companies like Anthropic and OpenAI, both of which have large engineering centers here, hire talent here that don't necessarily want to go down to California. Maybe they don't want their state income tax, at least right now. But for whatever reason, they don't want to go down there.

[00:52:23] And they'll set up these engineering centers or they'll just continue to add talent here in big ways. And we're seeing this through and through. So while at the same time, we might not be incubating as many startups here and not seeing the venture capital flow behind some AI startups, we are seeing the talent pool that has been created here get sucked up and stay here and build things. Yeah, gold rushes kind of, you know, generally have one center, right?

[00:52:53] Whether it's 1849 or it's 1999 in San Francisco or it's now with AI, like everyone's going in. But we have silver and gold rushes here too, just not on the, you know, as big a scale. And I think to sort of build on John's point, yeah, we're not silicon anything. And the symbiotic relationship between Seattle and San Francisco is part of, I mean, this goes to like, why do the two tech ecosystems, how have they grown the way they have? Look, venture has always been concentrated in the Bay Area.

[00:53:23] Yeah, the Microsoft and Amazon had San Francisco, Silicon Valley venture money. Bill made Bay Area-based VCs go to a Husky game with him and his parents in order to, as they were wooing, trying to get, you know, early round funding for Microsoft. And same thing happened with Amazon. You have the kind of core, really critical early stage investing that's coming from San Francisco.

[00:53:48] And so this is something that has kind of contributed to the, you know, the relatively small size of the VC community here because it's just so easy to get on a plane and go raise money down there. There's plenty of venture capital and angel investment here too now because of the maturity of the tech ecosystem. But that, like thinking about these two cities as, you know, twinned and rather than, you know, less competitors but actually being interdependent in really important ways. Totally agree with that, Margaret.

[00:54:18] And, you know, the old adage in the startup ecosystem here in Seattle for the longest time was if you're building your company, you start your company and build your company in Seattle, raise your money in the Bay Area. And that cross-pollination between the two markets is you see it in money and talent. And there's this movement to try to create a Cascadia or these connection points between Portland and Vancouver and Seattle. And I get it regionally, but frankly, the pipeline is San Francisco, Seattle.

[00:54:46] And if we want to do anything as a region to strengthen those bonds and ties, we should be looking at ways that we make stronger bonds between those two communities rather than building something between Oregon and Vancouver, B.C. I see almost no cross-pollination between Portland and Seattle. In fact, people in Portland hate Seattle. So, like, why do we want to go do business with them? So it's just very odd there. Just a very quick anecdote.

[00:55:15] I've done lots of public affairs consulting for various tech companies over the years here in Seattle. And I remember, I think it was 2015, when Lyft opened their first engineering office outside of San Francisco here in Seattle. And I remember asking the Lyft folks why Seattle. It was, you know, it was maybe 300 engineers. And they said, you know, we looked at Portland.

[00:55:39] And first of all, they said the cost of an engineer in Seattle is cheaper for us than in San Francisco. So that made sense. And we looked at Portland. It's cheaper in Portland than it is in Seattle. But the talent isn't there. And so Seattle had the right mix of the pool of talent as well as kind of the lower cost structure per employee you're adding. So it just made sense for us to come here.

[00:56:04] And it seems like a lot of, Margaret, you were saying all these companies from San Francisco opened their outposts during that period. And people don't job hop quite as much. Yeah. Let's get into some of the backlash in the politics about AI. You've got tech leaders calling for more regulation. You've also got folks at the same time in this furious race to build much more powerful AI that's going to lead to the end of the world, essentially. So it's a bit like I was thinking kind of Dr. Frankenstein saying, like, watch out. The monster is going to kill you.

[00:56:33] And then going to the graveyard and getting back to work. So I have this question I'm going to tack on to that, which is, why can't the tech giants create their own AI risk stop buttons instead of asking for it, this audience member asks. Is it just a PR game? I don't know if any of you know the answer to that.

[00:56:51] This is a big debate in the industry right now is whether all of this hype around AI is being created by the companies like Anthropic or OpenAI as a prelude to them going public. And I'm not sure I buy into that, that this is all a marketing scheme. But, you know, I think it's an interesting time as it relates to AI and how it's taking root in the economy. I tend to side with Jonathan here.

[00:57:21] I think there's a lot of opportunity. There will be some job loss as a result, as there have been through economic waves and different periods of our history. But for the most part, I'm not buying into the doomers camp that we're all going to get wiped out here. And to the point on the first part of the question on why they don't have a stop button, many do. I don't know if people saw the news from NVIDIA this week, but they kind of came out with their own kind of stop button on AI systems.

[00:57:50] Now, whether they work or not, I guess that's the key question. And we've seen examples here of OpenAI doing some experiments, obviously, with the attack on Hugging Face. And so I think these systems can get a bit out of control and go rogue whether they kill us all. I'm not quite there yet. Yeah. You know, it's interesting.

[00:58:09] I think that one of the AI, in a way, is a boundary-breaking, hard to compare to earlier technological transitions because of the scope and of the technology. And keep in mind, AI is like a category, like saying the Pacific Ocean. Like there are many, many things that are encompassed in that definition of AI. It isn't just, you know, LLMs or chatbots. It's a whole bunch of other things.

[00:58:32] However, I think to emphasize, overemphasize the novelty or the impossibility of containing it is also to – it becomes a very convenient excuse not to regulate it, right? Oh, it's moving too fast. We can't regulate it. And, you know, I spend a lot of time, unsurprisingly, thinking about the Gilded Age, the first one, back, you know, Carnegie, Rockefeller, et cetera, et cetera, where there was a similar, you know, real imbalance between these very fast-growing,

[00:59:00] technologically-driven new industries that were totally upending job markets and economies, consumer markets, and kind of overwhelming the capacity of what was then a very small U.S. government to – or any government to regulate it. And the creation of a regulatory apparatus that put some guardrails on it still allowed people to make a lot of money, mind you. And we're, you know, I think where American capitalism has been healthiest is where there has been some things in balance. So, you know, I don't know.

[00:59:29] I'm not going to – you know, I'm a historian. I don't make predictions. But I think there's – you know, it is important to say, yes, so many things are indeed new. But at the same time, there are some – it doesn't mean that nothing can be done. Well, if I could just add a couple things. I mean, the – one thing I observe in the debate for the most part is that most of the people most of the time are talking their book.

[00:59:56] And so that makes it very hard to really read what's actually going on, you know. So Jensen Wong is out there saying, you know, full speed ahead. There's no problems, you know. Now, you know, I'm sure that Jensen is a very, very smart guy. But it's very hard for me to disentangle his obvious business interest in holding that position, you know, from what he really thinks. You know, so that's a problem kind of across the board.

[01:00:26] We're in the unfortunate moment of having this issue arise at a time of where we essentially don't have any national political leadership that's able to deal with it. You know, so that's a big problem. And then I would put – you know, I think Amodi and Anthropic are in a weirdly different category because Amodi is not like these other people. You know, he's not like Musk or Bezos. You know, he's not like a capitalist shark.

[01:00:53] He's sort of this kind of intellectual who found himself sitting atop this monster that he, you know, isn't really sure what to do about, you know. But he's got a very strange – like it is a cultish kind of company, you know. And he thinks of the AI as like his children.

[01:01:12] And I will say, you know, I had a super bizarre experience where we ran a little – we sent Claude to – asked to proofread a little item that we had written that was recounting two stories that had appeared about Dario Amodi's wife. This was about three weeks ago. And one in the journal and the other in the information. And we asked Claude to proof the item. And it came back and it said, well, I'll proof that for you.

[01:01:39] But first, I really have some issues with this item. And you really need to reconsider. You know, this is a private person. I mean, it was like a lawyer's defense of why we shouldn't be running this item about Dario Amodi's wife. And it was nuts. I'm still thinking about what to make of that. But what it felt like was the AI was defending Dario. Let me ask you a question from the audience.

[01:02:06] And I think this is a kind of – captures some of the tech skepticism, I think, that some people feel. There's a question about taxes, right? Corporate taxes have been slashed at the federal level. We've all heard stories. You know, Microsoft and Amazon evading federal taxes. You know, years go by that they're making all this money but not paying any taxes. I'll just add on to this. Just earlier this summer, we had the spectacle of the day Meta was announcing all these layoffs in Seattle.

[01:02:36] Zuckerberg's mega yacht is sort of coming into the city. One of our best journalistic moments of the year was – That was our story. We got a tip. I'll give a shout-out to Ed Lazowska, the former computer science professor at the UW who lives in the Ballard area up on the Bluff. And saw the thing out in the middle of Puget Sound and called Todd and me and said, Zuck's yacht is coming in. Get down to the locks. And so Todd and I sprinted down there. Todd lives three blocks from the locks.

[01:03:05] I came buzzing into my car. And I was like – and it was a spectacle. So the question from this audience member is, so you hear all these complaints from these, oh, we're overtaxed and, oh, all these taxes are being applied to us. Does that really hold up? Well, I mean – Well, that – sorry. I mean, going back to the – you know, this is an industry that's grown large in an era of low taxes and low regulation.

[01:03:30] And it's baked into the business model and it's baked into the assumptions of including the – and the, you know, the wealth of the people at the very, very top. And, you know, I talk a lot about, you know, the bubble that's created by – I mean, this happens across time and space. When you get – you know, once you get a B under your net worth, it's very hard to keep your grip on reality, especially if it's 100 – you know, a centibillionaire, which didn't exist. But this happened in the 19th century too. You had kind of weird behavior by very wealthy people.

[01:04:00] It's like, do they see how that's – this is not a good look. And the same – and I was – the day that the boat docked – I think that Zuck's boat ended up in South Lake Union. I was teaching class and a whole bunch of my students had, like, gone down to, like, take goofy pictures of the boat. And they were just relentless.

[01:04:18] It kind of made me – I was like, all right, I think the tide is really turning on – not on Mark Zuckerberg in particular, but on this, you know, AI-driven big tech moment, even among – well, a bunch of University Washington seniors who were like, I don't know if I'm going to have a job. Yeah, there is a big debate here on taxes and the revenue driven by these companies and then jobs.

[01:04:40] And, you know, you have to – I don't know if you have to pick a lane, but, like, the argument is do you want to be an innovation center and driving the next wave of technology, whatever that is? And in this case, it might be AI, but it might be medical research out of the Fred Hutch. And do you want to have an ecosystem that supports that next wave of innovation and technology? I'm of the camp that, yes, that's a good thing to have because I'm from Northeast Ohio.

[01:05:07] And I – Charles Fitzgerald, a GeekWire columnist who's here in the room with us tonight, we spent some time in Cleveland. And we did an analysis on what happened in Cleveland in the economic boom of the 30s, 40s, 50s, into the 60s, and then how it just stopped in the 70s and 80s because they just lost their grasp on innovation. And they lost their talent.

[01:05:32] And it was this real warning sign to Seattle in our view that if we don't get our shit together and pull together as a community, we're going to be lost. And so these two groups need to work in unison in some way because the thing that really stood out to us in Cleveland was that you talked to people in real estate. You talked to the mayor. I interviewed the mayor. We interviewed the governor. We interviewed the Cuyahoga County executive.

[01:06:02] Entrepreneurs, startup people, across the entire ecosystem. They were aligned. Cleveland, they want to come back. They want jobs. They want industry. They want business. It's a place to invest. And they're working that message. And I came back from that trip and Charles had the same viewpoint that communities like that are out to eat our lunch. And so it is this debate. You can debate the tax part.

[01:06:26] But I think you do have to think about the next generation of the economy and whether you want to participate in that or not. Thanks, everybody. I'm going to point to that. You know, San Francisco, one of the activist groups ran a very successful campaign in 2018 for a new homelessness tax. And the argument was specifically it was a tax on the biggest companies in town. It was like 50 companies. And the argument was you just got this big federal tax break from Trump in 2017.

[01:06:56] So, you know, this is just a drop in the bucket. And that actually was effective, was an effective campaign. And that initiative won. And you see the city over time, like when things are good, they ramp up, the city ramps up the taxes on businesses. And then when the economy is down, you know, it's a boom and bust town, right? So when it's a bust time, then the city gets panicked about the businesses leaving. And so it cuts the business taxes.

[01:07:25] And so you see that cycle of the cuts and the increases depending on the flow of the companies. And our socialist mayor just proposed a no new taxes budget. So we're going to see how that ends up. Thanks, everybody, so much for all of your great questions. We have time for one more that pairs nicely with our final question for our panelists. This is sort of a Bill and Ted's Excellent Adventure question, which I kind of like. It's a little dated reference there.

[01:07:50] But if you could go back in time to the pre-Amazon days, what advice would you give policymakers about the rising wave of change? I think I'm reading. Or sorry, riding the wave of change, I guess it is. So Jonathan, you want to start? Get ahead of that. Oh, you know what? And not just Amazon. Let's broaden it out to San Francisco or Seattle. Well, I think that getting ahead of the housing problem is the number one thing.

[01:08:15] So in the 2000s, there was a kind of window of opportunity that was not taken. Now, I don't know if that's the fault of business leaders as opposed to politicians. But I do think that looking back, that was a huge miss. Absolutely. I would say talk and work together. I think what happened in Seattle, and I'll use the Amazon example, is you had a juggernaut that was running at 800 miles per hour.

[01:08:40] And it's hard to regulate, put a tax system in, grow alongside that as a government. But what I would have liked to have seen would have been Amazon come to the table, city government come to the table, state government come to the table and recognize what was happening earlier in the process. You're starting to see it a little bit now, but not quite. And if those two coalitions could have come together, I think we would have been on a better path that our city and community wouldn't be as divided and torn apart.

[01:09:11] I don't got much for you. Historians don't like counterfactuals. Oh, come on. But it is remarkable just thinking about, you know, like I think it's really useful to talk about these two cities at the same time and to remind – what it highlights is, you know, how much there is in common. And there's this shared history. It goes back. I mean, not only the shared history of government spending, military spending, Cold War spending.

[01:09:37] It was shared history as Pacific West cities, as ports, as cities that had, you know, vibrant early 20th century radical labor movements that were working class cities and affordable cities for a very long time. Cities that were both magnets, both of them magnets for artists and the counterculture. The U District was up there with the hate in the 1960s, you know. There were plenty – we had almost as many hippies per capita.

[01:10:03] And so that shared, you know, that shared legacy, cultural legacy, it helps explain why tech has grown and flourished in both of these places. In a way, the Bay Area, you know, has the advantage of time. You started the flywheel of startups and VCs and exits started in, you know, sort of 1957, Fairchild Semiconductor, the first venture-backed startup.

[01:10:28] And here, a little later, it was kind of a post-Microsoft as spinouts started coming out of Microsoft really in the 1990s. So there's, you know, there's time. But there's also these ingredients. I think thinking about, you know, thinking again about not as two competitors, but thinking of places that are grappling with a lot of the same problems that share a lot, not only the same tech DNA, but people.

[01:10:51] People boomerang – I mean, I think I'm not the only one in this room who's lived in the Bay Area as well as in Seattle and gone back and forth, right? That's a very common thing. So, you know, going back in time, you know, it's hard to say. If you go back to that funny 1999 60 Minutes piece and when Amazon was in Belltown with the door desks and, you know, Jeff and his khakis, and it was hard to imagine, oh, this is going to be the juggernaut that, you know, takes over.

[01:11:19] And South Lake Union was still auto shops and, you know, we were not choosing to build a park there and that sort of stuff. So, but it was, you know, hard – it's very, very difficult to kind of sit there and look forward and say this is what we could have done differently. But we do have – we always have an opportunity to change. That's one thing I can say looking at – you know, history does show that things can – change does happen and sometimes it happens quicker than you think.

[01:11:43] And possibility if there is political will and momentum, there is a lot of possibility for really constructive change and I think working together rather than antagonistically. All right. Last question. Imagine the Allies lose World War II. No, joking. One thing Seattle and San Francisco should do differently over the next decade if they want to remain great tech cities and become better functioning cities.

[01:12:10] But you can't say – although you probably would say build more housing and talk and work together more effectively. Jonathan, one thing that San Francisco and Seattle should do differently over the next decade? Well, I think that San Francisco needs a – and I don't know how this corresponds to Seattle. But San Francisco needs a structural change in the governmental system.

[01:12:35] You know, it's governed by a city charter that has been amended hundreds of times and nobody even knows what's in the damn thing. And so we need a charter reform which is on the ballot and that structural change I think is super important. Nice. John? This is more of a soft one I would say. I think we need to tell our story. I don't think we're good at that.

[01:13:01] I think we have so many amazing assets as I explained earlier and we should be proud to live here and we should be touting those from the mountaintops. And we need political leaders, government leaders, business leaders, sports figures telling that story as well. Yeah. We are too down on ourselves. I don't know why we called this podcast Blue City Blues. Blue City Blues. Exactly. Well, it's funny.

[01:13:27] When I first moved to Seattle and I was – you know, I lived in Washington, D.C. and Philly and Chicago and when – in the 90s. And all I wanted to talk about was how Seattle and Portland were like these emerald cities on the hill doing everything right. And I came here and everyone's like, Seattle's doing it wrong. I was like, really? Everyone loves you elsewhere. I would say, you know, going back to those three things I talked about, the three ingredients, money, institutions, quality of place, it's quality of place.

[01:13:51] I think focusing on – and this is not just making things nice for Amazon engineers getting paid $300,000 a year. It is making the city safe, vital, and fun and activating. And this is part of telling the story. This is part of – and, you know, governance is part of that too. But just simply making it someplace that people want to be, feel that they have a place here and can stay.

[01:14:16] And that is also creating space for art, creating space for people who are not part of the business community or tech economy. And, you know, I would add to that that sense of place is super critical. And it's one of the things that tech actually threatens in a fundamental way, right? So one of the issues that cities have is that what are cities for, right? You go there to shop. You go there to meet people. You go there for entertainment.

[01:14:41] Well, if you can do all those things on the internet, you know, you don't need the city in the same way. And so that, I think, has been very undermining to the fabric of cities and important to really be proactive and activating, as you say. Jonathan, you suggest at the end of your book you're a little equivocal there about whether maybe tech has eaten the soul of San Francisco a little bit, right? Well, yeah.

[01:15:06] I mean you see now, for example, if you go to some of the traditional districts where there's a lot of nightlife, for example, right? Like there's nothing, you know? Well, the sidewalks are boarded up at 9 o'clock. And at the same time, if you talk to like the caterers and the party planners in town, they're super busy. So I think like a lot of social life has moved sort of indoors into private spaces, which is partly a function of people having the money to do that.

[01:15:34] But I do think that's a dangerous trend for cities. I just want to enjoy San Francisco in the metaverse. All right. All right. Let's hear it for Margaret O'Meara, Jonathan Weber, and John Cook. And for the National Nordic Museum, thank you so much for hosting us. And for this great audience, thank you so much for being here. That's it for another edition of Blue City Blues.

[01:16:02] I'm David Hyde with Sandeep Kashuk. And thanks to everybody so much for listening.