Dana Blankenhorn

Solving the Housing “Crisis”

There are many problems that, owing to political polarization, seem intractable.

The housing “crisis” is one. Since too many people want to use the “issue” to score “political points,” obvious fixes aren’t tried because they’re complicated.

There is no housing crisis. There are plenty of homes. Everyone should be able to get one.

The problem is that private equity is holding too many of them, as vacation homes, for lease, or for AirBnB. You can get more from a house as a hotel, occupied just a week or two, than you can on a lease.

The answer is straightforward. Change the tax laws. Encourage private equity to increase the supply of housing. Discourage private equity from holding houses for lease or rent. Encourage home ownership. Discourage second home ownership.

This must be done carefully, deliberately. Any sudden change in the tax laws could cause housing prices to crash. Even modest tweaks will get pushback from owners of existing homes, because for houses to become affordable their values must come down.

The Short Game

Shorting is a legitimate investment strategy.

If you think bad news is coming to a company, you borrow a share of stock and “sell” it, then buy it back when the news hits.

The new family fun game, however, is to find stocks that are heavily shorted, buy them, then keep that stock off the market until investors who saw the bad things lose all their investment, and often a lot more.

In this way a garbage stock becomes f’in gold. Hedge funds had played this game for years but, a few years ago, small traders got into it. They organized themselves at discussion sites like Reddit’s WallStreetBets, they looked up short positions on sites like Fintel, they found targets and they pounced. Fortunes were made in crap like Gamestop, AMC Theaters and Bed, Bath & Beyond, bothered, and bewildered (BBBY).

Revenge of the Norms

For months liberals have been screaming at Merrick Garland to DO SOMETHING about Donald Trump.

For months liberals have been expressing disappointment with Joe Biden over a lack of action on his agenda.

Whether you’re of the left or the right, the democratic and societal norms that restrict action are frustrating. I’ve been unhappy about it too.

This week, the norms struck back. Garland approved the search at Mar-a-Lago and offered to justify it with court documents. Biden got at least part of his agenda passed.

Side Effect

I should be dead. So should my wife. So should most Baby Boomers.

In my case, statins saved me. I have naturally high cholesterol, 373 when I got it checked in 2000. My dad (right) had a heart attack at age 47, a decade before this picture was taken.

Statins didn’t exist when  dad needed them, but today they’re generic, cheap. Same with my hypertension drug, an Angiotensin Reuptake Blocker (ARB). Without it my blood pressure was erratic in my 40s. In my late 60s it’s steady.

It’s not just my life. My mom went blind in her 50s, from retinal detachments. I just had my second retinal operation. It took 5 minutes. I was back at my desk the next day.

The good news is that Norman Lear and Mel Brooks are still alive. The bad news is, so are Rupert Murdoch and Donald Trump.

Positives of a Bear Market

Every bear market starts with the same picture.

It’s a bunch of guys, average age 40. They’re staring up in horror. These days it’s a flat screen. Before that it was a TV screen and, before that, a blackboard high over their heads.

It’s why we never learn the lessons, and positives, from a bear market.

It’s always different guys. The guys who could have taught the lesson have aged out.

Even our longer lifespans don’t help. There are lots of people in today’s market who remember the bear markets of 2000-2002 and of 2007-2008. Most have been shunted aside for younger faces. It’s part of the rotation in market cycles. The market doesn’t want a memory and eliminates it.

Career Advice for Tough Times

No one wants to read the financial page right now.

I don’t. And I write for it.

For companies that cover finance, it’s a long march without water. Many companies will be lost, and so will many jobs.

It’s part of a natural cycle. If things were great all the time any idiot could succeed. We don’t want to see idiots succeed.

A market winter is a time of discipline. As was the case in the last two recessions, those who focused on the short term, who focused only on page views and not on branding, won’t make it through. What does get you through is a brand.

A brand knows its target market. A brand manager can picture their ideal customer, and the brand can go to that customer when things get tight, knowing there’s a base from which to build. A publication, or any company, without a brand can’t do that. They die.

Loyalty

Loyalty is one of the most powerful forces in human nature.

But it can be broken, as anyone whose spouse has cheated on them knows.

Abandoning loyalty is painful. We avoid it even after it’s proven worth less. We defend it even when it’s proven worthless. Usually, we abandon it privately. Whoever or whatever abused our loyalty is often the last to know.

Getting and keeping loyalty is a big topic in business schools. So is getting it back. Not enough study is devoted to losing it. We just know it when it’s happened, when sales at Kmart, or Blackberry, fall off a cliff. When that happens, we usually look at Walmart, or Apple. We don’t study the loss of loyalty. In retrospect, it’s obvious.

While it’s happening, however, it’s not obvious. Loyalty dissipates slowly, then all at once.

How to Adapt to Accelerating Change

The chief theme of my working life has been the pace of change accelerating, under Moore’s Law.

We’ve all had to get used to it, but until this decade economists didn’t.

Now they must.

The pandemic has shown just how quickly economic behavior can change, and how inadequate our tools are for adjusting to it.

Just since the start of 2021, we’ve seen a tech-driven work-from-home economy replaced by a great reopening, followed by huge demand for goods, then workers, and now a giant stop sign as markets have saturated. But fears of recession may be overdone as services are replacing goods in the family shopping cart.

Why Democracy Works

Democracy works because people are stupid.

I’m stupid. You’re stupid. The smartest are stupid in some ways. Everyone is stupid (except Dolly Parton).

But in a democracy the stupid balances itself out. The collective stupid of every citizen yields enough intelligence that we get by. Even when stupid wins, as in 2016, the beauty of democracy is getting a chance to correct it.

I’ve seen on Twitter that most people think other people are stupid. They’re right. But so are the people making the accusation. We all have our blind spots, our prejudices, our absolutes. They’re different. In the end they balance out and we muddle through.

What’s most dangerous to democracy is the assumption, on the part of all elites, that everyone else is stupid. They are. But you are, too. It’s when elites achieve authority that they can be deluded about this. I don’t care if you’re in the media elite, the intellectual elite, the scientific elite, the business elite, or (God forbid) the political elite. Once you assume authority your stupidity will be laid bare.

Propaganda for Good

Russia thought it was attacking a Russian province.

Turned out it was attacking Europe.

Europe is a state of mind. It’s egalitarian, but it’s fractious. It’s united, but not entirely. It’s western civilization in microcosm – messy, slow to anger, but mighty when provoked.

The invasion revealed that Putin’s Russia wasn’t even a nation-state. It was a medieval Empire, gilded by 20^th century ideologies, wealth, and technologies.

What makes this Empire so dangerous is that it has used all it had to attack America. Until recently it was successful. Putin ran our government, through Trump. Had we not beaten Trump he would be sitting in Kiev right now.

The Putin threat to this nation is still alive. It can still win. That’s because Trump was never Putin’s most dangerous puppet.

Rupert Murdoch is.

Without Fox News, Trump would have gone nowhere. Without Fox News, racism could not still be rising. Putin is a King. He won’t be satisfied until he rules everything. Murdoch is an oligarch. Rich man wants to be King.

Find me three issues on which Murdoch and Putin fundamentally disagree. I’ll wait.

I’ve written this before. It is time for Americans to become Ukranian in the defense of our heritage and rights. I’m not talking about grabbing guns and heading for Kentucky. I am talking instead of using what Ukrainians have taught us, in their hour of need, about propaganda.

The video above teaches this lesson. The song is about mothers, how they grow gray but still treat us like children, protecting us. What we see are women soldiers rushing into the war zone to take children to safety.

Then note the twist. These aren’t their own children they’re saving, or not just their own. When the children are safe, the women go back to the war. They seek their faith. They go on. They are soldiers. Everyone is a soldier.

What America is going through is a struggle. It’s a struggle that can be won. But it will take every weapon at our disposal, including propaganda. We have 5 ½ months and, if we win this time, anything is possible. If we fail, nothing may be possible for a long, long, long time.