The 1979 Game

When you win the popular vote by 9.5% but still lose ground, as Democrats did November 6, your problems are systemic.

The result underlies tech’s obligation to come out of its shell and fight for the political system that birthed it.

Tech moguls have done some things. Jeff Bezos bought The Washington Post, Marc Benioff bought Time Magazine, Laurene Powell Jobs bought The Atlantic. The key to gaining more power will be in creating journalism business models beholden to tech interests.

Tech must do to Bizarro Carter what oil did to Jimmy Carter, and for the same reason -- to protect its self-interest.

Until then Trump will go merrily on, bending courts to his will and defying the will of both the people and the economy’s growth engine. The 2018 result most resembled that of 1978, when the rising economic tide of oil made gains against a President who disdained it but failed to make a real breakthrough. Technology is the rising economic tide today.

The natural reaction of liberals is to urge a boycott of Trumpist states, like my own state of Georgia, by liberal business interests. The solution is the opposite, namely to flood small states with investment, and new employment, so they turn around naturally. That’s going to happen. Costs are driving tech companies out of Silicon Valley, Seattle, and the northeast corridor, into other parts of the country. The “Rise of the Rest” is real.

We’re about to play the 1979 game.

You may remember 1979 as a year when the pressure of oil finally blew the lid off the economy, in the Iranian revolution, in a second oil shock, and a crisis that could only be won through military pressure, which Republicans proceeded to apply even before Ronald Reagan took power.

Prosperity then meant controlling resources.

Prosperity today means deploying trained minds. Minds are the gating factor to growth. America is the Saudi Arabia of trained minds.

During 2019 prices will rise because Trump’s tax cut party must be paid for. An annual deficit of over $1 trillion and rising, placed alongside previous deficits, means the government must go to the market and borrow with both hands. This raises the price of money. Interest rates go up, squeezing out borrowers like homebuilders and retailers which need capital, causing layoffs. The stock market falls as well. I expect a crash in many sectors that have been rising very soon. This will take even more capital out of the market.

At the same time, the deflationary pressure of Moore’s Law will continue to grow. That means unemployment. This is what happened in the last two recessions. Jobs disappeared. They didn’t come back.

This is going to hurt those exurban and rural areas where Trump’s political power lies. Retailers, farmers, and manufacturers are going to be squeezed by inflation and only those that are ruthless in cutting costs, using technology, will stay in business.

This will even be true in energy. Fracking is more expensive than conventional drilling, and crushing bitumen, then combining it with natural gas liquids, as is done in the “oil sands” of Canada, is even more expensive. Why do that when a fully-capitalized solar panel delivers its energy free? Why do that when the wind blows, the Sun shines, and we still live on a molten rock?

Renewable energy is now the cheap energy. Trumpistan is going to be crushed between the twin grinding stones of Wall Street, demanding profits, and technology, cutting costs.

At the same time technology companies, for their own protection, are going to have to step up their fight for political power. For oil, in the late 70s, this took the form of a host of intellectual and social pressure groups, funded by oil money, devoted to a host of right-wing causes guaranteed to support the oil and defense industries.

Technologists now must do the same. They need to invest in journalists, especially local journalists, who will tell the story I’m telling you now. Even the Cloud Czars can’t thrive in a world where they can’t import skilled labor, where Washington treats them as a political scapegoat.

What technology needs to thrive are open markets, so it can chase global opportunities. But the rise of nationalistic dictators like Trump represent a War of All Against All. Nations are walling themselves in, making war on critics, blaming one another for their problems. This is even leading to a balkanization of the Internet, making it harder to move goods and labor to cut costs and do more business. Trade wars are unhealthy for economies and other growing things.

The biggest beneficiary in all this will be China.

China continues to invest in renewable energy. China’s internal system is big enough to deliver all the trained minds its tech companies want. Chinese politicians ration freedom strictly, but its tech leaders still have access to the global Internet. China’s population remains hungry enough to tolerate these limits in the name of order, because order has made them rich. China has the tools to fight inflation, even to fight global warming, and to keep investing in technology and the infrastructure that grows its wealth and power.

China also keeps out the American Cloud Czars. U.S. hardware, software, and service companies won’t find comfort in the Chinese market.

The real threat to America is economic and can’t be met with guns. It can only be met with the tools of freedom, of ordered liberty, with trained minds. That is why technology will fight for power within the American system.

A lot of liberals are going to call the situation hopeless in the next few weeks and months. They’re going to say that democracy is broken, that the will of the people is stifled, that the world is going to hell in a handbasket. They’re right.

But pressure is building against dictators in every country. Democrats won the 2018 elections, by a lot. Most Englishmen oppose Brexit. Most Chinese want freedom. Agitation isn’t going to stop just because governments stand against the agitators.

I can’t tell you where the next crisis will occur. I’m guessing England. But I do know this. What technology needs to grow is freedom, trained minds that can build wealth with the tools which technology has brought them.

Tech doesn’t care about the containers its raw material comes in. It doesn’t care about your sex, your color, about your age, or about who you love. It doesn’t care about your politics, so long as you’re willing to work collaboratively. If you can’t move at all, you can be the next Stephen Hawking. This is both an economic and political demand. It won’t be silenced by guns, because those economies which heed the call are going to grow, and those which ignore it are going to fail.

The American system may be bruised, but it is not yet broken. It is the best business environment for obeying the dictates of modern growth. Technologists aren’t going to sit idly by and watch their companies be destroyed by today’s machine men.

As Charlie Chaplin said, in his own voice, at the end of The Great Dictator, two generations ago, “In the name of democracy, let us all unite!”