Dana Blankenhorn

Could Xi Fall?

It’s a question no one is even asking.

Could Xi Jinping fall from power?

There is no evidence for this. He is in his third term as China’s President, and increasingly acts like Vladimir Putin. He’s committing genocide in Xinjiang, he has destroyed Hong Kong’s economy, and he is threatening to invade Taiwan. He has absolute impunity. He is the world’s strongest dictator.

But how secure is he?

Unlike every other dictator on this planet, Xi Jinping presides over a complex, post-industrial economy. As I’ve been writing for decades, such an economy relies on highly trained, educated, and motivated people. The secret to America’s success lies in our ability to create, encourage, and (when necessary) import such people. (I know Trumpism threatens all this, but that’s another story for another time.)

Can China Be Turned?

A quiet effort is underway to turn China from the path of war back to the path of prosperity.

If it works, it’s the biggest story of the decade.

Secretary of State Antony Blinken got a surprisingly warm reception in Beijing last week. He even got an audience with Xi Jinping, complete with a handshake that shows Xi as an old Chairman Mao.

China’s establishment is torn between two ambitions.

Its military and political establishment want Taiwan back. They’re willing to kill millions of their own people to get it. They see the price being paid for their depredations in Xinjiang and Hong Kong as worthwhile. They want what Japan wanted before World War II – a “Greater East Asia Co-Prosperity Sphere” that can stand as an equal to America’s dominance of Latin America.

China’s business establishment, and its people, want the deal they signed up for 45 years ago. Deng Xiaoping made a compact with his citizens in 1978, capitalist prosperity in exchange for absolutist unity. Westerners read Tiananmen as the destruction of freedom, and China’s efforts to forget it as ignoring the lessons of history. Both are true. But the other side in that exchange, an apartment, a car, and a chance at real wealth, is just as real.

On China

Since the start of COVID, the U.S. and China have drifted toward a Cold War that threatens to become a hot one.

China insists we don’t understand it. All they want is the respect due the world’s second largest economy. That means a sphere of influence covering East Asia. That means no one questions their government’s actions.

They say the U.S. has that. We reject that idea but look at the record. Since World War II, America has built an empire on the backs of our military. We haven’t lived up to our ideals any more than China has lived up to Karl Marx’. We’re hypocrites.

I know what you’ll say. China’s record is worse. It’s doing to Xinjiang’s Muslims what we did to our native Americans. Its behavior in Hong Kong is as bad as ours against black Americans. It sees Taiwan as a threat it needs to take out. We feel the same about Cuba.

Things Are About to Happen

This country, with its institutions, belongs to the people who inhabit it. Whenever they shall grow weary of the existing Government, they can exercise their constitutional right of amending it or their revolutionary right to dismember or overthrow it. 

A political campaign can start only after policies are implemented.

In 2023, a lot of things are about to happen that will have profound impacts on how people vote next year.

• Ukraine is coming for Russia. We’ll know a lot more about that by fall.
• Jack Smith is coming for Trump. We’ll know a lot more about that by fall.
• Gun, abortion, and education policies are being implemented by states and we’ll know a whole lot more about their effect by fall.

I haven’t even mentioned the weather, which will show in no uncertain terms just how damaging our reliance on fossil fuels has become. Droughts and hurricanes will wreak terrible havoc on the whole planet this summer, and on Americans too.

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.