In New Economy, Old Government Up for Vote


Each says he is a fan of the high-tech companies that have propelled this region--and the United States--to an Information Age of exploding wealth and financial dominance.

But as they slug it out in one of the nation’s most contested races for Congress, Republican Jim Cunneen and Democrat Mike Honda are stirring a debate that will rage long after November and echo far beyond Silicon Valley.

Looming over the clash between two state assemblymen is one far-reaching question: Does a new kind of economy demand a new kind of government?

Cunneen, 39, says it does: “Elections are about the future; they’re not about the past,” says the former high-tech executive who emphasizes the importance of personal initiative in creating today’s boom times.


But Honda, 59, still backs an ambitious federal role in the fight for social justice and other goals: “We have to make sure we don’t forget about our other responsibilities,” the former science teacher says.

The scramble to represent California’s independent-minded 15th Congressional District is one of a handful of contests that will determine which party controls the House. On the surface, it is like other races around the country, with jousting over health care, education, guns and other matters of concern to voters everywhere.

But ultimately, it is a contest to represent the new high-tech economy, a skirmish over future priorities--a contrast in style, substance and approach to Washington.

“You really are testing out this theory for the first time--that the new economy is going to drive elections,” says Amy Walter, a congressional analyst for the nonpartisan Cook Political Report.

Onetime Democratic Region in Transition

The laboratory is a sprawling district of leafy suburbs, concrete-and-glass industrial parks, mountains and valleys rolling through much of Santa Clara County, including South San Jose, along with a piece of Santa Cruz County stretching to the Pacific.

Democrats enjoy an 8-percentage-point edge in voter registration, a key reason why many believe that Honda leads the race, although a new GOP poll points to a tossup. In the last three elections, the district’s voters crossed party lines to send Republican Tom Campbell to the House, an expression of independence that may become typical for new economy voters. For 20 years before that, they chose Democrat Norman Y. Mineta, now the U.S. Commerce secretary and a Honda mentor.

Many of the district’s voters combine conservative, free-market economics with a keep-government-out-of-the-bedroom approach to social issues, research suggests. Already, new-economy enclaves, where many earn their living at high-tech companies, are emerging in parts of Southern California, New Hampshire, Massachusetts, North Carolina, Washington, New York, Texas and Florida, says Kevin Spillane, a Republican consultant who is advising Cunneen.


Silicon Valley, he adds, is the cutting-edge prototype: “It is ground zero for the socially moderate, fiscally conservative, independent-minded voter.” It is a group of voters he says is growing.

At the top of the high-tech ladder, meanwhile, top executives are rethinking their traditional disdain for politics, an important shift that is bringing new voices and money into the electoral arena. While Honda enjoys the support of organized labor and other loyal Democratic interests, Cunneen has rallied to his side a who’s who of high-tech heavies, including chief executives from Cisco Systems Inc., Hewlett-Packard Co., National Semiconductor Corp., Intel Corp., Sun Microsystems Inc., EBay and other area companies.

Yet Honda may be winning the money race. He has raised some $1.7 million, in addition to almost $400,000 in media support from the Democratic Party, according to officials in his campaign. Cunneen has raised about $1.2 million, plus $500,000 worth of TV ads and direct mail, paid for by the Republican Party.

The high-stakes battle for the 15th District was sparked a year ago, when Campbell chose to vacate his seat to challenge Democratic Sen. Dianne Feinstein.


Cunneen, who had established himself as a pro-technology moderate during three terms in the state Assembly, jumped into the race early. Tall, friendly and telegenic, he seemed on the verge of sailing into the open seat.

But as the December filing deadline approached, leading Democrats weighed in heavily. Two days before Honda was scheduled to visit Japan, Vice President Al Gore asked him to run. By the time President Clinton called the next day, Honda had decided to go for it. Almost instantly, the down-to-earth assemblyman became a formidable candidate, boosted by decades of community ties and a stirring life story.

On some issues, the candidates do not seem so different. They even agree on some of the new economy matters, such as the importance of education, free trade with China and the benefits of allowing more high-skilled immigrants into the country.

But their priorities, world views and sources of support make for a striking contrast between Honda, whose family once scratched out a living in the region’s fruit fields, and Cunneen, a former Eagle Scout who grew up in a middle-class suburb.


Debating a New Role for Government

It is on the economy and the evils of government red tape that Cunneen holds forth with his greatest passion: “Should you or the government decide the most important decisions in your lives?” he asks a group of students at a San Jose community college. “I think you should.”

The former global corporate manager for Applied Materials Inc., a producer of chip-making equipment, almost gushes: “You’re going to work for these incredible companies that are not only transforming the world, they’re transforming our lives. The question is, does government understand that?”

The question resonates in some of Silicon Valley’s most elite circles: “I don’t believe in more government or applying old-world regulations to this new economy,” explains John Chambers, chief executive of Cisco Systems, the world’s largest maker of computer-networking equipment. “If you watch Jim, he just gets it. There’s no other way to say it.”


Chambers’ comments were made one recent evening when he and other high-tech leaders helped Cunneen raise $300,000 at an event in upscale Saratoga.

Some in the high-tech elite also praise Cunneen’s thirst for details about their issues; they say many politicians view high-tech mainly as a source of cash. E. Floyd Kvamme, a Republican investor who sits on seven high-tech boards, speaks approvingly of Cunneen’s frequent telephone calls seeking input on policy matters.

“In the California Assembly, Jim’s the only guy that does that,” Kvamme says. “I think it’s old economy versus new economy, though Mike Honda might not want to say it that way.”

For Honda, who seems more at ease discussing injustice than the Internet, much of his perspective was forged through personal experience that has nothing to do with high tech. While still a toddler, he spent more than two years in a World War II internment camp. His formative experience with capitalism came on a strawberry farm in South San Jose, where his family toiled as sharecroppers.


“We ended up owing the bread man. We ended up owing the meat man. We ended up owing the fish man,” he recalls. Low-key but idealistic, Honda would never forget those travails in a career that has included a Peace Corps stint in El Salvador and work as a science teacher, principal, planning commissioner, school board member and county supervisor.

His early experiences “affect how I look at other people’s lives and struggles,” Honda said during a campaign break inside a San Jose Elks Lodge. “Even in today’s good economy I know that, not only are low-income people struggling, middle-income people are also struggling in this valley.”

Elected to the Assembly in 1996, he forged close ties to organized labor and community groups that typically see government as a force for good. At the same time, he has staked out pro-industry stands on taxes and other issues. “Government has to be a partner” in seeking solutions to such problems as affordable housing and overwhelmed roads--not a force that dictates “unilateral” solutions, he said.

Indeed, Honda is not without his own high-tech supporters, particularly among a more youthful crowd. They are people like Josh Becker, 31, a venture capitalist who was among dozens who gave as much as $1,000 to attend a recent Honda fund-raiser hosted by CrowdBurst, an Internet start-up. At least some in the new economy view Honda’s long experience in government and schools as an asset.


“It’s not like you can go to Capitol Hill and spend 90% of your time on high tech,” says Becker, an associate with Redpoint Ventures and a former congressional staff member.

But in a region where many spend little time worrying about Capitol Hill, the ideal candidate profile remains in dispute, the political debate a work in progress.

“There’s been a slow transformation from ‘Leave me alone--I’m living my own life’ to a little more: ‘My gosh, we’ve got to worry about schools, we’ve got to worry about the environment and who’s going to deal with that?’ ” says Larry Gerston, a political scientist at San Jose State University. “And therein lies the battleground.”