Dana Blankenhorn

Time for Tech to Choose

Technology companies will dominate the politics of my children’s generation.

It’s inevitable. The politics of oil and resources dominated my time because the key political issues of that time revolved around resources and access to them. That’s what the Arab oil embargo was all about in 1973. It’s what the Iranian embargo was about in 1979. It’s why we went to war in 1990. That’s why we invaded Iraq. It was oil. Anyone who denies this is like those who deny the Holocaust, or who claim slavery to have been good for black people. They’re lying and should not be heard again on any subject.

In the same way, the politics of manufacturing dominated the lives of my parents. That’s what the Great Depression was about, what World War II was about, what the development of the military-industrial complex was about. It was about creating new markets for the abundance of factories. That’s what the suburbanization of America was about. It was about ginning up demand. Mass consumption leads to mass production.

The point is every American generation has a dominant industry, one whose problems and demands come to control American politics. It will be the same with technology. I, for one, welcome our new Google overlords.

I do, that is, assuming they make the right choices now, assuming they understand where their own self-interest lies, and assuming they take steps to defend it.

This Market is Going Down

I love when people call a down market “volatility.” They don’t call an up market “volatile,” no, they say it is up, and you better get in now, and buy, buy, buy. But when the market is down it’s “volatility,” which implies that it might be going up when in fact it’s going down.

The market is going down for a reason. Interest rates are rising. Money is costing money again. Thanks to $2.5 trillion added to the deficit, mainly because of the Trump tax cut, we’ve got inflation, and bond yields are up.

Higher interest rates are good for some people. Baby boomers are at the front of that line. It means you can sell the government your money and get income. On a 30-year government bond, that’s a yield of 3.16%.

Winning The 1978 Game

We are approaching 10 years since the financial crisis that launched a new generation in American political history. As was true before, we’ve had the election of a President from the wrong party, one devoted to policies that defy the will of the rising business class, because older voters refused to leave the stage.

This happened because our government allowed deflation to run riot, which sent the benefits of productivity scurrying to the top of the economic pyramid, leaving those who should have been the beneficiaries with nothing. The nature of our crisis is to broaden the base, recycling the wealth of deflation into inflation, generating economic power that can meet the needs of the world’s people.

It so happens that 1978 was also the year I entered the work force. I was in Houston, then a wide-open town growing like gangbusters, much like Silicon Valley today. Houston was driving the economy but not getting what it needed from policymakers, who were more interested in the fate of manufacturing cities like Detroit than in the resource industries.

What Jeff Bezos Can’t Do

Word that JP Morgan Chase, Berkshire Hathaway and Amazon.Com were exploring ways to “fix” health care caused a lot of reporters to quickly make asses of themselves. 

They had little choice. The announcement was deliberately opaque. The goals are amorphous. The aims of the players are different. Warren Buffett is looking for a legacy, Bezos for a profit, Dimon for cash flow.

All very fine, but it will come to nothing if they can’t make progress against the key driver of health care costs, non-compliance. Some 75% of health care costs today are for chronic conditions that could be prevented, like diabetes and heart disease. If people took care of themselves, if they even took their medicines as prescribed, we would save trillions.

Some doctors are just as bad. Surgeons don’t use checklists, physicians don’t use best practices, others prescribe the high-priced drugs patients saw on TV where cheap generics would work just as well. Still others think a medical license means they can push any quack nostrum that comes into their head. It’s not just malpractice. It’s abuse of the system in the ordinary course of business, most of it perfectly legal, even ethical.