Dana Blankenhorn

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.

Trump’s War

I’ve been guilty of this myself.

I’ve said that George W. Bush had to have been a worse President than Donald Trump because he lied us into war and Trump didn’t.

Well, Trump did. Trump has. Trump has unilaterally declared a trade war, based on nonsense, and a lot of people are going to be hurt by it.

And it’s all based on lies. (Sculpture by Kimber Fiebiger.)

First. A trade deficit isn’t money you have to borrow. It lowers your cost of goods sold. It’s deflationary and allows you to sell finished products for less than before. It makes the whole global economy more productive and efficient. This idea that we “owe” China for its trade surpluses is, simply, a lie.

Second. Trump is going to war on behalf of industries that deserve to fail. Coal hasn’t been a growth driver since the 19^th century. Steel hasn’t been vital since World War II. Supporting failing industries is bad industrial policy.

Third. Trump is going after China in precisely the wrong way. If he did want to hurt China economically, he would open the H-1B visa floodgates and encourage every Chinese student coming here to remain. What drives economic growth in the 21^st century, as I’ve said many times, is human capital, trained and willing minds. Freedom is our trump card in any conflict with China. Sending them down the demographic cliff while we stay above it, remaining youthful by bringing in the world’s best and brightest, is the only way we’re going to stay in the economic game.

The Eye of the Hurricane

The 1978 election, my natural analog for 2018 based strictly on economic history, was not a great one for Republicans.

True, they won 15 House seats and two in the Senate. But Democrats retained control of Congress, both houses.

If history were to repeat itself in 2018, this would give Democrats the Senate and keep the House in Republican hands. History rhymes, it doesn’t repeat.

Jimmy Carter was very popular at this point in his term, in the wake of the Camp David accords. His approval rating was 56%. The fact that Republicans won in 1978 despite this shows their issues had saliency. The Wikipedia entry on the election notes that it set the stage for the Reagan Revolution, and that the Republicans who won were far more conservative than those they replaced. 

Peak Carter, Peak Trump

One thing that has surprised me over the last two years is how almost no one understood my point right after the 2016 election, that Donald Trump is a sort of Bizarro Carter. 

By that I meant he is completely the opposite of Jimmy Carter. Carter was a Democrat. Trump is an Autocrat. Carter believed in human rights. Trump believes in the divine right of kings. Carter championed the environment. Trump trashes it. Carter said he’d never lie to us. Trump lies 6 times before breakfast.

What they have in common is they represent the end times for the Political Thesis that birthed them. Carter was elected 44 years after Franklin Roosevelt and was the last President to run on those principles. Trump came 48 years after Nixon and will be the last President elected under the Nixon Thesis of Conflict. 

The 1978 Game: Our New Political Overlords

At this point in 1978, no one in politics saw oil coming.

I was getting ready to graduate from Northwestern, and would spend the next several months, mostly unemployed, back home in Houston, the capital of oil, before getting the job resulting in the picture to the right. People were becoming accustomed to the strange man in the White House and his scandals. His “Georgia Gang” of cronies was being derided as a political gang that couldn’t shoot straight.

But beneath the surface, economic change was brewing. Oil had been handed political power under Lyndon Johnson and found a ready embrace in the Nixon years thanks to former Governor John Connally, whose decision to switch sides seemed at the time like a small story but would later prove massive.

Oil didn’t want to become a Republican bulwark. They wanted to play both sides against each other. Carter, and his more liberal detractors, forced them into the Republican camp. During the 1978 campaign, and beyond, this would prove decisive.

We’re at a similar historical junction now. Washington is becoming accustomed to a strange man in the White House, and his scandals. His “Wall Street Gang” is being derided as a political gang that can’t shoot straight.

But beneath the surface, change is again brewing.

Why Prejudice Doesn’t Pay

The current economic era is unique.

In the past, economies were driven by human labor, by land and its resources, by financial capital, or by infrastructure.

Technology is different.

Technology doesn’t require land, it can replace resources, and it doesn’t require massive amounts of low-skilled labor. Singapore (right), Hong Kong, Israel and Silicon Valley have none of these things.

What these and other tech centers have, is trained minds in abundance. They can create them. They can attract them. They nurture them. They give them what they need to thrive.

Re-evaluating J.P. Morgan

The Greatest Progressive of American history was J.P. Morgan. But he wouldn’t be one today.

Let me explain.

Businesses have always talked up the idea of progress, of change. It’s at the heart of the progressive idea, a constant, incremental improvement. Progressives believe in things getting better, and the way they usually get better is by something better coming along. Better products, better services, and better ways of doing things. Today these are all byproducts of competition.

They weren’t always.

Morgan was active from the Civil War through the first decade of the 20^th century. He is usually portrayed as either a colossus or an octopus. He was the man behind the “trusts.” Trusts were evil. He was Teddy Roosevelt’s great nemesis.

But was he? We know the men were close. Morgan and Roosevelt were both Republicans.

What is undeniably true is that, during Morgan’s time, America and the world were short on capital and on basic infrastructure. We couldn’t afford to have several rail lines serving the same point, or several telegraph wires serving the same office. That would mean other points and other offices got no service.

Speaking Your Own Truth

In his book The Tools, Phil Stutz found a way to make me cry.

One of his tools is that you should imagine yourself as a child, insignificant and broken, flawed. Not your best self, just the opposite. Then, when it’s your turn to speak, speak through that child. Once you’re unafraid of being seen for what you are, or what you’re afraid you are, you’ll be fearless.

I’ve been using this tool all my life without knowing it. I desperately want to be heard. It’s what I’m about. So, I shout, on this typewriter, as loud as I can, every day. When I’m done, I’m satisfied, whether a lot of people were listening or just a few. This gives me inner peace. It’s not what I do, or my job, it’s what I am, I tell people.

I didn’t understand the meaning of this until I faced a child who didn’t have it. I would tell this child, every day if I could that what mattered to him wasn’t what he was learning, but how he integrated it, and how he expressed what he knew to teach new truths others. The kid didn’t believe me. The fear was too great. He went around the world, learning, but afraid to speak his truth, and no one ever heard what he had to say.

There are many success stories, however, who are just like this child. They just parrot what teachers tell them. They say what they’re told to say. They memorize a script and recite it, believing that they’re saying something but, in fact, contributing nothing new to the conversation.

This Market is Going Down

I love when people call a down market “volatility.” They don’t call an up market “volatile,” no, they say it is up, and you better get in now, and buy, buy, buy. But when the market is down it’s “volatility,” which implies that it might be going up when in fact it’s going down.

The market is going down for a reason. Interest rates are rising. Money is costing money again. Thanks to $2.5 trillion added to the deficit, mainly because of the Trump tax cut, we’ve got inflation, and bond yields are up.

Higher interest rates are good for some people. Baby boomers are at the front of that line. It means you can sell the government your money and get income. On a 30-year government bond, that’s a yield of 3.16%.

The Two Great Opportunities

Most people will tell you that, in 2018, we have two big problems.

There’s not enough money. Machines are going to be doing all the work.

These are not problems. They are opportunities. The “problem” of automation and the “problem” of money are opportunities to transform life and, in time, to transform this world.

When the machines take over, and they are indeed taking over, what I call “Baby Boom retirement” can come to everyone. Automation isn’t the end of the world. It’s the beginning.

I was born at the height of the Baby Boom, in 1955. In 2020 I will reach “retirement” age, 65. For women, that peak came two years later, when the love of my life was born. She is due for retirement in 2022.

As we have grown up and grown old together, the nature of retirement has changed.

In 1934, when the Social Security Act was passed, retirement was a few years of rest before taking the Big Sleep. The average 65-year old only lived to see 67.

By my youth, when On a Clear Day You Can See Forever saw its debut on Broadway, with the song Wait Until We’re 65,  retirement was a never-ending vacation. My parents’ generation all moved from New York to Florida. Robert Klein joked, “I sent you two healthy 65-year-olds, and 25 years later they come back dead!”