Dana Blankenhorn

The Global Boom and Bust Called Bitcoin

As a business reporter for 40 years now I have seen my share of booms and bust.

The Houston oil boom, and bust. The S&L boom, and bust. The dot-com boom, and bust. The real estate boom and bust of the 2000s.

All those booms and busts happened just in the U.S. Other countries had their own cycles. There was the “Asian contagion” of the 1990s, and the Euro crisis early in the current decade, to cite two examples. While Houston was booming, New York was busted. And vice versa.

But the current cycle is different. Thanks to Bitcoin.

Bitcoin is an implementation of Blockchain, which is as revolutionary in its way as the Internet itself was in the 1990s. Blockchain automates trust. That means if you’re working as a financial intermediary – as a banker, a broker, a trader, or a regulator – your job could be eliminated in the next 20 years.

Blockchain does this by applying encryption to two already-existing technologies, the database and spreadsheet. Each block of data is encrypted. Each block is part of a database. The database is organized as a general ledger, a spreadsheet.

On Net Neutrality

If you have been reading this blog for any length of time, you no doubt believe that I’m a radical. A liberal. A fanatical criminal. 

In some ways this is true. On foreign policy I’m an internationalist who believes in peace. On social policy I believe people should be free to love who and what they want, and to kill themselves in any way that suits them.

This is not true in economic policy. I still consider myself a liberal here, but business was always a liberal force before the Nixon era. Progress is a business word, still often used in advertisements to denote the aims of oil companies and manufacturers, as well as tech outfits.

My economic beliefs are based on those of Adam Smith, who saw wealth inclining the wealthy toward the common good. I consider Trump and his acolytes to be Nietzscheites. (Ayn Rand is just Nietzsche in a skirt.)

More to the point, I consider them Fascists, and resent that I can’t use the word in public without being condemned.

So, when it comes to the subject of net neutrality, I’m sure you’re thinking, Dana is going to tell us that the FCC is wrong, that Democrats are right.

I’m not.

The Creative Destruction of Moore’s Law Trumps the Age of Trump.

There has always been an intimate connection between market cycles and political cycles in American politics.

The 2008 crash brought in Barack Obama, and the age we’re now living in. But like most people (including me), he thought the crash and his election meant the end of the crisis, not its beginning.

We’ve all learned better now.

One reason is that the 2008 collapse, and its quick resolution, didn’t drive home the lesson about speculation, and how man-made bubbles can cause enormous hurt when they pop, as they always do. The “Helicopter Ben” Bernanke solution of dropping money on the banks, replacing the losses, then regulating the banks’ use of the funds, only took the banks out of the equation during the next bubble.

The cycle of crisis, recovery, anti-thesis, and excess accelerated, as change does in the age of Moore’s Law. By 2016 the markets were ready for a new period of excess.

Beating Fascism in Our Time

Before this era is over there will be a global demand to “eat the rich,” at which point the Kochs, the Mercers, the little Trumps and Peter Thiel expect this nation’s intellectuals to save them from the guillotine.

The rich do have their purpose. Wealthy people supply capital for opportunities that create jobs. They stand by the banks that provide liquidity to the system. But they were amply paid for these services before they launched all-out war on the poor (and middle class), starting with Nixon, accelerating with Reagan, becoming obvious under Bush and climaxing under Trump. 

At Christmas 2017, the day of victory over these forces seems far off. The rich and their castles of money seem as impregnable as the castles of stone were for their 14^th century forebears. Everywhere you look, it seems, fascism reigns supreme. Russia has taken down America, China is “communist” only in name, the Middle East is ruled by the Saud Kings, and throughout the developing world absolute rulers of all stripes know the great powers have their back.

The world is much like it was in 1942, except that democracy and capitalism are being squeezed from above, not from the sides.

But victory is in sight.

The Fascist Decade

The biggest mistake American reporters make, whether covering politics or any other beat, is in describing the two sides of the political debate.

Liberal and conservative are two sides of the same coin, the democratic coin. Liberals will bow to conservatives, and vice versa, when the other side wins a free and fair election. This is true regardless of how different policy positions may be. Both accept the legitimacy of democracy, the rule of law. They take freedom as a given, as inalienable. They like open markets, everywhere.

This is not the case in our time. Today there are two completely sides in the political debate.  There is a democratic side that supports democracy, an open society, and free enterprise. There is a fascist side that supports dictatorship, a closed society, and enterprise controlled by a small elite in the name of the nation.

Donald Trump is a fascist. This is what makes him different from every previous American President. It’s the word the media, even today, won’t utter. Fascist.

Americans are taught in grade school that we beat fascism in World War II, that it died with Hitler and Mussolini. It didn’t.