We’re writing this note as the first polls close in the US midterm elections, but we will go with the prevailing wisdom that the House will swing Democratic for 2019. If that proves wrong, we will title tomorrow’s note “Dewey Beats Truman”. Fun fact about Thomas Dewey: he was offered the position of Chief Justice of the US Supreme Court twice, and declined both times.
If the pollsters and online wagering sites have it right (finally…), all the House committee chair positions will swing to the ranking Democrat from their Republican counterpart. Since the chair sets the agenda for these committees, a lot will change come 2019. For example:
- House Judiciary: New York’s own Jerry Nadler will have the gavel. There’s no love lost between him and the president, and the prevailing wisdom includes impeachment hearings in the New Year.
- House Financial Services: California Democrat Maxine Waters will be in charge. This will make Fed Chair Powell’s semi-annual testimony a good deal livelier, if nothing else.
- House Oversight and Government Reform: Elijah Cummings (D-MD) is on deck here. Another House member with little love for President Trump, Cummings has said he will investigate the president for violating the emoluments clause of the US Constitution, among other issues.
Since this is the “Disruption” section of our note, let’s look at the House committees/subcommittees that directly affect the Technology industry:
- House Energy and Commerce: this is the committee that grilled Twitter’s Jack Dorsey earlier this year.
Ranking member Frank Pallone (NJ 6th district) is a 16-term House member. His website lists 17 “Issues”; none of them are “Technology” or anything close to it. His website here: https://pallone.house.gov/
- House subcommittee on Digital Commerce and Consumer Protection: Jan Schakowsky (D-IL) is the ranking member.
Her concerns seem centered on digital privacy. She introduced a bill in the current Congress that would limit employers and schools from requiring employees, students and applicants to make available their social media accounts. You can see the rest of her legislative priorities here: https://schakowsky.house.gov/issues-legislation/
- House Science, Space and Technology: Eddie Bernice Johnson (D-TX) is the ranking member here. She was the first registered nurse ever elected to Congress, back in 1993, a remarkable fact in its own right. As with Rep Pallone, the “Issues” section of her website does not mention technology: https://ebjohnson.house.gov/issues-legislation
- House subcommittee on Cybersecurity and Infrastructure Protection (under the Homeland Security committee): Cedric Richmond (D-LA) is ranking member. Much of his “Issues” page relates to general security concerns rather than cyber: https://richmond.house.gov/issues
There are a few other House groups that might have a say on Tech regulation, but these are the important ones. There don’t seem to be any anti-tech firebrands in the new leadership, which is good news for the industry. The only wrinkle we see is none of the new chairs of tech-related committees hail from California, so they have less skin in the game than a representative from tech’s home state.
The upshot to all this: if gridlock in Washington is good for stocks, it may be absolutely wonderful for Tech. All the industry has to do is not screw up too badly, and they do seem intent on beating that low bar just now.