Dana Blankenhorn

Fire Sundar Pichai

Recessions are good for markets.

They show us where the rot is, where the poor performers are.

This current one is no exception. It revealed that some of our Cloud Czars, the companies dominating the global economy with hyperscale datacenters paid for with cash flow, aren’t as clothed in gold as they seem. Some are downright naked.

Early this month, I identified one source of rot and urged Jeff Bezos to fire Amazon.Com CEO Andy Jassy. But it’s also time for two other founders to get back in the game. Larry Page and Sergey Brin need to push out Sundar Pichai.

Pichai is the kind of numbers-oriented manager Wall Street loves, but Silicon Valley should despise. He’s the kind of go along, get along guy who can make the trains run on time, but completely lacks vision. In technology this is a fatal flaw.

It’s obvious in how he dealt with artificial intelligence, the new hotness of 2023.

This is not about firing an ethicist. It’s a more basic failure to see where things were going, and deploy the necessary resources to get there. 

The Limits of Senior Power

If I were around 100 years ago, I would be dead. Instead, I’m rich. (Pictured are my grandparents, May and Edmund O'Donnell, in 1918.)

It’s a demographic and economic transformation that is destroying hope for change in America and (perhaps) making us the last generation.

Until recently, people lived their first 20 years dependent on parents, the next 20 as parents, the next (if they were lucky) 20 as grandparents and anything past that dependent on the children. Most of the world still lives this way.

But starting with Social Security in 1934, and continuing through general prosperity to today, America has turned this on its head. Seniors aren’t just living to an average age of 83, we’re doing it with money. I’m just a 68-year old journalist but, thanks in large part to a wife who works in tech, I’m a millionaire. We own our house. We have enough invested to guarantee a fine retirement, God willing. There may even be something left when we’re gone.

This has changed political incentives. There’s no better example than Florida where The Villages, a huge retirement town of 150,000 (almost all of whom vote), has turned the state’s politics on its head. Add them to those already living up-and-down the state’s east, west and south coasts, and you get a huge state entirely devoted to short term thinking. Education, the environment? Fuck ‘em. We’ll be gone.

2022: The Global Cold War

It was clear in 2020 that Americans were at war with ourselves.

In 2021 that became a Cold War, mostly played out in the media and state legislatures. There were some violent outbursts. There always are. But for the most part it was our war.

In 2022 that war became global. Russia invaded Ukraine. China ratcheted up its rhetoric about invading Taiwan. Afghanistan and Iran criminalized every woman in their countries. And the war became hotter here.

With the good people of this country activated, we won some notable victories. We held off the horde in our general election. Ukraine held off Russia. China’s economy rolled over, giving Xi Jinping something else to think about. Iran’s women revolted. Jair Bolsonaro lost his re-election.

Fog of Global War

This is a depressing day. It’s the day when crystal balls are shattered. It’s the day I expected to happen, but now it’s upon us.

There comes a time in every campaign where you really don’t know what’s going on.

Both sides are spinning small events as big deals. Everyone is talking past one another. Everything is up in the air.

This is October, and it’s the same in America every two years, as people choose what direction they want their states and nation to go in.

But it’s worse this time.

That’s because, in addition to the usual midterm madness, we’re at the center of a global crisis. Russia is seriously threatening nuclear war over its losses in Ukraine. Iranian women are rising and being crushed underfoot. In China, Xi Jinping may become a new Putin, an absolute dictator with no guardrails. Religious dictatorship is rising against democracy in India. We don’t know what’s happening in Brazil. The Sauds are pushing up oil prices.

This is also no normal midterm election. This is an existential battle between democracy and fascism. Major media try to both sides it, but that’s increasingly impossible. Every possible -ism is rising against democratic compromise and common sense – sexism, racism, fascism, Christianism. All the evils bedeviling the rest of the world have come here to roost because Vladimir Putin invited them in.

Nuclear Impunity

I wrote about the concept of impunity back in August.

I was talking in terms of American politics, but there’s a bigger kind of impunity, nuclear impunity, which Russia is now attempting to deploy.

The idea is that once you have a nuclear weapon you are immune to criticism. You can do whatever you want, kill whomever you want, because if you’re pushed to the brink, you can destroy the world.

North Korea is well known for this. The Kim dynasty can destroy their economy, starve their people, commit all kinds of crimes but South Korea writes it off because they have nukes. North Koreans are now several inches shorter than the people to their south. They suffer from chronic malnutrition. They live in a geographic prison, and no one will help them escape, because the Kims have nukes.

We can’t have effective nuclear non-proliferation with this kind of impunity. It’s too tempting. We know Israel has nukes. We just don’t say so. We know India and Pakistan both have nukes. We’re scared of Iran getting nukes because they might use them against Israel.

An Oilpatch Memo

President Biden’s move to cut gasoline taxes is doomed to failure.

That’s not because Congress won’t like it, or that it will take money from infrastructure. It’s because price is how we ration short supplies. No one has suggested an alternative rationing mechanism.

My family has done its bit for conservation. We bought a Toyota hybrid. We keep the thermostat at 77 during the summer. Except for our recent vacation, we’re not driving much because we’re working from home.

Privileged people can do this. Those without privilege, or those who think they’re without it but are, have a harder time. Poor people who live far from work get chewed up by inflation at times like these. Middle class folks who’ve bought giant pick-ups, boat trailers and homes in the exurbs are also hurting. There’s rising anger on both sides. Conventional wisdom says Republicans benefit as the “out” party.

I don’t want this to be about politics, however. I’m a finance reporter.

OPIC

My one fault with the Biden Administration so far has been its leniency toward its enemies.

Republicans aren’t the loyal opposition anymore. Vladimir Putin isn’t just an adversary. Those who still support Putin are domestic enemies, and it’s there in the oath of office, that you protect against both foreign AND domestic enemies.

The spike in oil prices may be another opportunity lost.

The opportunity is to create what I call an Organization of Petroleum IMPORTING Countries (OPIC). While the U.S. is nominally an exporter, we are the natural leader of this group, which could include India, Japan, Europe, South America, most of Africa and even China.

The first task of OPIC would be to account for the elimination of Russian supply from the market. Each member would agree to a specified reduction in imports, or an import maximum. Each member government would deal with this shortfall however it saw fit. But if no one breaks the agreement, then you can go toe-to-toe with OPEC in the oil markets, searching for price stability.

Saudi Arabia and other OPEC members want price stability. They like price spikes, but they know they’re a short-term thing. Over time, over the next 10 years, they know that their net production will rise, while demand will fall. The Sun shines, the wind blows, rivers, and tides, roll, we live on a molten rock, and there’s also efficiency. Today’s cars, trucks, appliances, and computers all use much less energy than they did before. The increase in time between charges for your phones is all due to their becoming more efficient. The batteries are the same.

The Second Coming of Armand Hammer

During the decades of the Soviet Union, there was a Russian spy hiding in plain sight. He was welcome in boardrooms, even the White House.

His name was Armand Hammer.

Hammer represented Soviet interests practically from its beginning. As detailed in the 1996 biography Dossier: The Secret History of Armand Hammer, Hammer befriended Lenin back in 1921. He continued to represent Russian interests almost until his death, in 1990.

During his life he was often called a “go-between,” because as CEO of Occidental Petroleum he was a business executive welcome on both sides of the Iron Curtain. While The New York Times called him a “riddle” in 1981, a more accurate term from Epstein’s work is traitor.

I believe we have another Armand Hammer in our midst, which is why I bring his name up.

Turning Point

Assuming there’s no nuclear war, the Ukraine conflict is a global political turning point.

Democracy has found its voice. Autocracy has found its limits. Dictators can act while democracies dither, but there’s no constraint on the dictator.

We know the price of that now. Not just in America, but everywhere.

The implications of this realization will spread like the concussive wave of the Tongan volcano. This will leave a mark on the world like that of WWII.

Trump and all his little Trumpkins are now discredited. That’s most of the Republican party, gone. TV is trying to resurrect Mitt Romney, who called Russia our enemy in 2012, as the new face of the party. But it’s a greatly diminished party.

Dictatorship has also been discredited globally. We can now see the dangers inherent in the political systems of Arabia and of China. Unchecked power leads to madness. Dictators also flock together, each endorsing the madness of the others. It’s bad for business. It needs to change.

None of this will happen all at once. We all want things to happen all at once. But the tone of global debate will slowly change. We have seen the strength of democracy. We have seen how people will die for liberty and unite against dictators.

We won’t forget.

Bottom Up

The relationship between the Washington press corps and its readers has become as abusive as anything Donald Trump ever drew up. The same is true for the relationship between “Lefty Twitter” and the left.

As usual, it’s a question of business models. You make money by getting clicks. You get clicks by energizing people, by making them angry or scared, preferably both. Straight news doesn’t pay.

That’s why The New York Times, Washington Post, The Hill, Politico, even CNN and MSNBC, have become trolls. If Politico writes a story saying the economy is improving, with numbers attached, no one is going to read it. But if they throw in a “but,” leading with a counter-example – a place where it’s not growing, people who are being left behind – that draws readers. Talk seriously about vaccines and you hear crickets. Write up some anti-vaxxer and its happy days. You’re getting clicks.