Dana Blankenhorn

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 Political Validation Looks Like

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When the political winds change, and everyone can see it, I call it political validation.

This only happens once in a generation. It is a climactic event.

Before validation, reporters and pundits will come to their work with an assumption that the political winds are blowing in one particular direction. After validation, they will always come to their work with an assumption that the political winds are blowing in a different direction. Their successors will take this new direction as a given.

After Nixon won in 1968, Democrats refused to believe for a decade that the New Deal Coalition was truly dead, and could not be recreated. The truth only dawned on them after Ronald Reagan’s victory in 1980, and his emphatic re-election in 1984, validated the strength of the Nixon Coalition. He had been considered extreme, “the man who nominated Goldwater,” and his natural caution kept him from entering the 1968 race until it was too late.

Generation Gap

When David Bowie died last week, age 69, many wrote that he was “gone too soon.”

The point illustrates something important about our society today, and our politics.

Because David Bowie was never too old to rock and roll, and he was too young to die. (Ian Anderson of Jethro Tull, who wrote that lyric, is 68 and currently on tour – we have tickets.) Paul McCartney is still rocking at 73. Bob Dylan is 75 and still writing songs. I guess 70 is the new 60. (Which is good because I turned 61 last week.)

When older players refuse the leave the stage, it can be hard for a younger one to shine. That may not be true in arenas like music or sports, but it is definitely true in politics. Democratic front-runner Hillary Clinton is only a few months younger than Bowie. Her opponent, Bernie Sanders, is 74. Republicans can’t complain because their front-runner, Donald Trump, is 70. For those old enough to remember the issue of Ronald Reagan’s health in 1980, it’s a sea change.

It’s not entirely welcome, either. One thing a generational crisis should do is wipe previous history off the political map. Lincoln and Douglas didn’t debate the War of 1812. But 1968 is just as far removed from 2016 as 1812 was from 1860. Clinton and Trump could well try to re-legislate Vietnam. Both were active way back then.

2016 and Technology Economics

Most economists have absolutely no idea what they’re talking about.

It’s not their fault. They have lacked the data to prove or disprove their theories. So they repeat those theories, year after year, decade after decade, and are surprised when economies don’t fit the theories.

Most of these are industrial age theories. Marx wrote in the 19^th century. The Austrian economists wrote in the early 20^th century. Their theories are products of their time, the idea that machines generated additional productivity slowly, and that operators would always be required for those machines.

Moore’s Law destroyed all these theories.

There was some recognition of this early-on. In 1971, when early technology pioneers like David Packard were in the Nixon Administration as part of his “California Mafia,” the tie between metals and money was broken. This was called the “Nixon Shock.” It was made absolutely necessary by Moore’s Law. Without it, the deflationary effects of technology improvement would have wrecked the economy. Imagine what gold would cost today if the whole economy had to be floated on it.

But the impacts of Moore’s Law aren’t just cumulative. They are, in many ways, exponential. The impact of clouds-and-devices on productivity are exponential. Imagine. You not only have a supercomputer in every person’s hand, one capable of automating not just office work but entire marketplaces, and these are connected, without wires, to more compute power than we could have dreamed of creating just a decade ago.

The Internet at War

I think a lot of historians mistake the point of our periodic political crises.

To me, it’s the point where directions turn that are key. To others, it’s the point at which that turn seeks validation, when it’s challenged, that matters.

So to me 1968 matters more than 1976, and 1932 more than 1940. I think 1896 was a key year for America, and that 1860 was probably the key moment in our entire history.

But others just see directions set in those years. The real crisis, in their view, comes after, when the new assumptions are challenged and things turn really violent. World War II is on The History Channel a lot more than the Great Depression is.

The Fourth Riding of the Ku Klux Klan

Every advance of minority rights in this country has been marked by violence. The Civil War never really ended, as Barbara Fields said. It can still be lost.

We were taught in history class that the Civil War ended in 1865, but the violence continued, as white southerners including Nathan Bedford Forrest formed the Ku Klux Klan in the late 1860s, the specific aim of this First Riding being to put blacks back “in their place,” under heel, through murder.

That effort was successful, as Union troops abandoned the field in 1877, after a disputed election where southern electors became crucial. The “war” won, the overt violence died down and lynching took on its aspect of ritual.

Winning the Oil War

Vietnam was said to be “a Cold War activity,” part of a larger struggle for global supremacy between the U.S. and the late Soviet Union.

The description overlooked millions of deaths, and immense human suffering, dismissing it as a byproduct of something larger, a proxy war. Veterans of the conflict remain insulted by the characterization, but in historical terms it was accurate.

History will record Syria, then, as an “oil war activity,” just as 9-11 was an “oil war activity.” It is part of a larger struggle for global supremacy among the producers of oil and gas. The tragedy is that it’s not recognized as one.

Understanding that Syria is just one piece of a larger struggle, and understanding what that struggle is really all about, would give us a chance to win that struggle, but so far no one in power, not even President Obama, has made that connection publicly, and with sufficient urgency.

National Security and the War Against Oil

The attacks in Paris are a reminder that, 82 years after Texas aligned America with the Saudis’ Arabia, trading technology for oil, things are getting no better.

It’s a chain of mutual dependence. They have oil. We need oil. They sell oil to buy guns. We make guns to buy oil.

It no longer has to be this way.

In just the last five years, the cost of renewables has become cost-competitive with that of grid energy. Warren Buffett buys solar power plants to assure Berkshire-Hathaway with regular electricity supplies. 

At peak times Texas gets 30% of its electricity from wind. Once, due to the peculiarities of its regulatory system, wind suppliers were actually paying customers to take that electricity, it was so plentiful. 

The Silent Majority Needs to Run

Conservatives love a parade. Liberals all want to lead one.

It’s an old political saw which speaks a profound truth. People are always more ready to fight in defense of what they have than on behalf of an unknown future.

The basic political equation I learned over 40 years ago remains M x V = P. Myths times values equals power. Old values are understood more easily than new ones. Myths are more easily created around old ideas than new ones.

America has, on the whole, been a liberal nation because our leaders have been able to wrap new values in the colors of old myths in order to achieve power.

The Founders wrapped the ideas of the Declaration of Independence around English common law, drawing a clear line from the Magna Carta of 1215 to their own struggle, and relying on contemporary philosophers like Locke, Burke and Montesquieu to explain them. The Constitution was negotiated, then explained in terms of democratic frameworks dating to Greek and Roman antiquity.

Why We Are Going Left

Ignorant of longer-term patterns, beholden to their owners, every political reporter on the planet has missed the political story of the year.

The wind that for a generation was blowing from the right now blows from the left.

Whether you’re talking about Syriza in Greece, Podemos in Spain, Labour in England, the Pope in Rome or Democrats in the U.S., ordinary people have grown tired of conflict, tired of feudalism, and tired of excuses for prosperity failing to improve their lives while elites play zero-sum games in order to grab more-and-more power.

This wave has been building for a long time and it’s based on an economic fact. The age of oil is ending. The age of technology is here.

For technology to fulfill its potential takes an enormous amount of cooperation. Technology flattens hierarchies, and broadens bases. Technology demands liberty.

I have made my living covering technology since 1982. These trends are not new. What is new is that technology is now at the center of everything. It’s how we move money, it’s how we do science and art, it’s essential to participation in the modern world.