Dana Blankenhorn

Democracy is Hard

Here’s a truth no one likes to admit.

Being a citizen in a democratic state is much harder, and takes much more work, than being a citizen in an autocratic state.

You need to think about things that may not matter to you. You should vote. If called upon, you have to drop what you’re doing and be a juror. Even if it takes weeks.

It’s a lot easier to just complain about government and keep your head down than take public affairs seriously. You have a life. You’re just trying to get by. Democracy, if you’re poor, comes off as a middle class affectation. Most people in this world are poor. Very poor. Even wretchedly poor.

The (New) Generation Gap

As we boomers aged, we avoided the Generation Gap that bedeviled our parents.

We didn’t disagree on the war. We let them indulge their passions. We tried to be friends and, while that wasn’t always a great idea, it did keep the peace.

But now that they’ve grown, that gap has finally arrived, in a way we never saw coming.

In a way it’s class warfare. Today’s millennials have less money than we boomers did. Most can’t afford a home. Many can’t even afford a car without help.

They’re not as heavily into things anyway. Their emphasis is on living. This is an over-generalization, of course. Some 30-somethings do have McMansions. Some own giant pick-ups. But most rent, and the rent’s too high.

Beating Moore’s Law

I spent 20 years, off and on, researching Moore’s Law, its history, and how it worked. 

As I wrote my book, and rewrote it twice more, most industries succumbed to its charms, its promise of productivity. Journalism succumbed. Retailing succumbed. So did distribution and management.

Three industries have not yet succumbed, and I have a chapter in the book devoted to them.

These are health care, the law, and education.

It’s not that there aren’t solutions. Law libraries are obsolete. So, too, college libraries. Health care has finally surrendered to electronic records, lured by sweet, sweet stimulus cash.

But final costs, and prices, have gone up in all these areas.

It’s politics.

States refuse to define what graduates need, and unions insist teachers must give the lesson, not just test and tutor. Courts have used technology to pile more work on lawyers and judges. Time is money. Doctors have used their gatekeeping function to stop standardization of treatment, while drug companies have used regulatory capture to create pricing based on the value of your life.

Bezos Come Back

Since Jeff Bezos left his post as CEO of Amazon, in mid-2021, the stock is down 43%.

That’s 5 times worse than the average stock in the S&P 500. It’s more than twice as bad as Google. It’s as bad as the performance of Meta, the artists formerly known as Facebook.

Amazon is also shedding employees faster than Bed, Bath & Beyond. Some 27,000 have been let go this year alone. 

The job of running this company is simply too big for Andy Jassy.

The store is at war with itself, with third party sellers sabotaging Amazon’s own merchandising. The company’s physical retail effort has been a disaster. Walmart is beating it all to hell. The streaming unit is on an island. Jassy replaced himself with an outsider. Adam Selipsky had been at AWS 11 years but left to join Tableau Software and was recruited back by Jassy.

Morale at Amazon is at an all-time low. My own Amazon drivers used to be cheerful folks who looked forward to driving new electric vans. Now they’re in beat-up gas-powered garbage, they don’t say hello, sometimes they’re in personal cars, and one even blocked my driveway the other day. (I’m not going to report her. She was obviously overworked and under stress.)

SBF 30 (or higher)

“White collar crime” is crime.

Robbing someone at pen point is worse than doing it at gunpoint. You’re in a position of trust. You have a fiduciary responsibility. You are supposed to have ethics, before you have the law, to guide your actions.

Break all of that and it can be murder. People die when their wealth and future is stolen. White collar thieves steal college educations, they steal retirements, they steal food from the mouths of grandbabies. They make every honest businessperson suspect.

I thought everyone felt that way until I heard Michael Lewis, author of The Big Short and other light classics, interview Harvard Business School professor Eugene Soltes on his podcast Against the Rules.” 

Everything is Liquid

What happened to Silicon Valley Bank is known as a liquidity crisis.

They had plenty of assets. But the assets were in instruments whose value had fallen, that weren’t worth as much as the bank claimed. When Peter Thiel and his bros learned this, they all pulled out their money at once and the bank collapsed.

The main lesson is that everything is now liquid.

Financial assets are liquid. Political assets are liquid. Your reputation and marriage are liquid.

Before the Web was spun this wasn’t the case. It would take time for depositors to pull their money out of a bank, time the bank could use to sell assets in an orderly way. There were still runs but these could be managed through regulation.

This time the fall was sudden, and the punishment had to be severe. The executives all lost their jobs. They deserve to face criminal charges, for cashing out while the walls were falling around them. Everyone who invested in SVB or its debt lost all their money. That’s a hit of nearly $100 billion, mainly to very rich people. Hopefully it teaches other banks to manage their assets better, to sell out money-losing securities quickly so they’re not caught out, in other words to be more transparent.

The 1983 Game

By my calculations, oil took over political dominance from manufacturing in 1968. Tech took over from oil in 2008.

That means we’re now playing the 1983 game. (This will be my 40th Peachtree Road Race. That's me at my second, in 1984.)

That was the year I bought my house. Interest rates were still high making the $49,500 price hard to afford. While oilman George H.W. Bush was VP, it was the defense and media industries who had Ronald Reagan’s ear. The oil shortage of the 1970s had turned into an oil glut, fueled by the Administration pushing the Saudis to keep pumping even while prices paid to Texas oilmen were falling.

This should sound familiar to today’s tech tycoons. Even while Californian Kamala Harris sits as VP, the industry is being battered in Washington. There are calls to break up the company, to tightly regulate the Internet. The collapse of Silicon Valley Bank was a bad look.

The industry thus faces a political choice.

A lot of the big swinging dicks of the last decade have made their choice. Led by Peter Thiel, a lot of them are putting all the cash they can into Republican campaigns. They see control of the government, under the leadership of a Republican party dedicated to their specific interests, as the best route forward.

Run on the Bank

The collapse of Silicon Valley Bank may prove to be a bigger story than it appears.

The reason goes back to a story I ran away from, the 1981 collapse of the Houston oil industry.

I didn’t intend to run away. I finally got a job at a daily in Birmingham, Alabama. It was a job I’d hold only 4 months before being fired. But I left Houston June 1, 1981. The collapse began soon after.

As in this case, the Fed had telegraphed what it was going to do. Paul Volcker was going to raise interest rates until inflation gave up, just as Jerome Powell is doing now. Inflation was much higher than, double digits in fact. Add to that the Reagan Administration jawboning the Saudis for lower oil prices and it was a perfect storm.

20th Century Blues

The 20^th Century was the bloodiest in history.

World War I. World War II. Vietnam. Afghanistan. The Gulf War.

And those are just the wars the U.S. was a direct party to.

There were lots of others. In all cases they were caused by fear. Fear of the other, or the other side. Nations battling nations for dominance like rutting goats.

There was some hope, after the Cold War, that those days were ending.

They didn’t. Russia just regrouped, and China decided they wanted to play, too.

Humanity can’t afford this. Never mind who’s right and who’s wrong. (We’re right. They’re wrong.) The waste of natural wealth, the continued abuse of fossil fuels, the climate can’t handle it.

Unless we can find a way out of the current conflict with China, our grandchildren won’t have a livable planet. There’s no Planet B.

Publishing is Community

I call March 3 Firing Day.

I lost both my career’s jobs on March 3. In 1983 I was dumped by the Atlanta Business Chronicle. In 1997 I was dumped by CMP Media. Other than those brief periods, I’ve been a freelance all my life.

Had I stayed at ZDNet, a full-time gig I left in 2010, I would have lost my job this Firing Day, as Red Ventures dropped tech journalists from ZDNet and CNet.  

I’m told the culprit is ChatGPT, which can deliver conversational text from descriptive inputs. But it’s really Search Engine Optimization (SEO). SEO is designed to attract Google to content, to maximize its audience. If your content is listed first in Google, people will click on it. If it’s on the 5^th page of a Google search, they’ll never find it.

This is a fine strategy for mass media. But it sucks for journalism. I know because I still work for people who traffic in SEO.