Dana Blankenhorn

Where Elizabeth Warren is Wrong

Like a lot of people, I admire Sen. Elizabeth Warren of Massachusetts, or as the great Charlie Pierce calls her Senator Professor Warren (SPW).

But, again like most people, I can’t vote for her for President.

The reason, in my case, is Warren’s attitude to the Cloud Czars. Warren is staking a big part of her candidacy on running against them.

Let’s set aside, for a moment, the fact that the Czars – Microsoft, Apple, Amazon, Google and Facebook – now command a combined market cap of nearly $4.5 TRILLION. Never mind that they dominate the business world, or that democracy always follows the Golden Rule – he who has the gold makes the rules. Democrats aren’t going to win the White House over the objection of the Czars and the bulk of the technology industry.

My beef here has to do with her proposal to break up the Czars, starting with Amazon.

Her argument against Amazon is that the company can see which brands people are buying, then put an Amazon version into the market and wipe out the other seller. It’s like she never heard of store brands.

Store brands have been a feature of American retailing practically since brands. Kroger does it with food. Target does it with clothes. Walmart does it with both. Walmart calls their store brands “Great Value.”

Copyright Wars 2020

My #1 life goal is to be plagiarized. THERE IS NO GREATER ACHIEVEMENT OR HONOR.

                                                                                ---Tom Peters 

                I first wrote about the Copyright Wars in 1997, when the Digital Millennium Copyright Act was being debated.

                I predicted, in my first version of Moore’s Lore, which came out in the year 2001, that “East Coast” laws like this would fall to the “West Coast Law” of code.

                This is not the way things are working out in 2019. The Internet’s ability to serve mankind is threatened as a result.

                As Tom Peters notes, there is no real value in an idea. An idea is only worthwhile if spreads, or if it’s acted upon. For this to happen it must be communicated, disseminated, and digested by many other people.

                The Internet, specifically the World Wide Web, is the means by which this now happens. The Internet lets any idea, from anyone, reach an audience and change people. Or not.

                But two things are happening. First, bad ideas are getting the same power to change people as good ideas, because no one can credibly tell everyone the difference. Second, the copyright industries have moved to stop the distribution of ideas, under the mistaken belief that there is value in them, and that anyone repeating them should pay.

                Trump illustrates the first point well, although anti-vaxxers and other idiocies would exist even without him. It’s in the nature of the Internet to eliminate gatekeepers, and those companies that have risen to that position, like Facebook, Google and Twitter, eschew the role, fearing it will let government prevent protest (which it can).

Aladdin’s Bank

Jeff Bezos doesn’t really have over $100 billion, not in the way you may have $1,000 in a bank. Amazon.com isn’t worth $900 billion, in the way your house is worth $250,000.

Both valuations are based on a lie, the idea that Bezos could sell out his stock, or that ready buyers would take out all shareholders at the current valuation. The value of a stock-based fortune, or a company’s market cap, is based on the price paid at the last trade.

So it is that we return to Aladdin’s Cave, which I wrote about in 2013.

Had Aladdin come out of that mythical cave, with all its gold and jewels, and tried to sell them, the value of gold and jewels in that town would have plummeted. He would have brought only a fraction of the value.

On the other hand, what if Aladdin were a Hamiltonian?

The Crash of 2019

Right now, in early April of 2019, the U.S. economy seems to be in great shape.

Inflation is minimal. Money is cheap. Unemployment is down. Wages are rising.

Here is why I think this is all going to collapse, and that right soon.

Deflation.

As I have said here many times, technology creates deflation. Deflation is the primary subject of my Moore’s Law book, which I’m getting ready to rewrite for 2020.

To understand deflation in action, look in your hand.

The Death of Cable (and what comes after)

On March 25 Apple announced the death of the cable television model.

What replaces it is, in a word, the Internet. Streaming services, yes, but with far more interactivity than cable or broadcasting ever offered. True integration between audiences and programming, whether you need news, sports, or entertainment. Available wherever you happen to be. All you need is a mobile phone.

This is the entertainment model of the future.

Sounds great. People are now paying $200-250 per month for bundled Internet and TV service, with the TV taking up two-thirds of that bill. They’re paying another $60 or so for mobile Internet service, with calling bundled in.

There’s a lot of money at stake.

I covered the birth of the present world. I covered it twice.

Technology’s Dilemma

There is a bug at the heart of innovation, of technology, and of capitalism itself.

It lies in the incentives we give innovators.

It lies in stock ownership.

What liberals have condemned is the fact that nearly all the profit from innovation is going to a very small number of people. The winners’ founders, and their venture capital partners, get fortunes measured in the billions of dollars. Their key people also wind up as multi-millionaires. Everyone else, whether they’re line staff or just ordinary schmoes, can pound sand.

Sure, we all get some of the benefits. It’s cool to have cat litter delivered. It’s amazing that I can learn anything I want to know within moments. I can call my kid in Europe free. The software and hardware my son accesses, to automate cutting-edge medical tests is amazing. As a result, we’re starting to understand not only the genetic code, but what lies beneath it.

Still it’s true. The rewards are all going to a very small number of people. Jeff Bezos will never be able to spend the $150 billion he has access to. Bill Gates will never be able to give away the fortune he has won. Philanthropists are taking on the role of governments, self-appointed boards deciding the priorities on the nation’s wealth.

The Streaming Crash of 2019

For the last several years, a lot of companies have been trying to fit through a very narrow door.

That door is streaming.

The success of Netflix, and of podcast stars like Marc Maron, has caused a heart attack in the entertainment world. Suddenly everyone, and every company, is aiming for a taste of this action.

They can’t all get it.

There aren’t enough hours in the day to listen to a fraction of the podcasts available now. I have a half-dozen in my phone, and I can’t get to all of them. Long-haul truck drivers can get to a lot, and people who work as security guards may listen for 8 hours per day. But a single Joe Rogan podcast can run 4 hours. Maron does 3 hours every week.

CBS, NPR, the BBC and others are hitching their wagon to podcasts. Spotify plans to spend $500 million on podcasts, an industry that generates $700 million in annual revenue.

These numbers make no sense.

Fixing Health Care

The key to fixing our broken health care system is deceptively simple.

Give those who collect the income firm control of the outgo. There is no such thing as an unlimited draw from a limited pool.

We know this works by looking at the market as it exists right now.

The Veterans Administration takes the biggest risks, people who’ve served our country. They come to the system with terrible problems, and they age out in terrifying ways. Yet the per-patient cost of delivering health care to these people is a fraction of the cost of our other delivery systems, because the government controls both income and the outgo.

The VA is a single-payer system. It gets its money direct from the government, it has a clear mission and requirement to treat people, and it can bargain for the best prices. VA hospitals aren’t fancy, many of the doctors are new to the profession, the staff is stressed, and the whole system is rickety, but it works. And when the Trump people try to privatize it, when they seek to destroy it, this will become very clear to all veterans, even those who would otherwise love them some Trump. They won’t love them some Trump, or any other privatization-mad Republican, ever again if he succeeds in destroying their VA.

Exurbs are the New Rust Belt

Here is where economics, politics, and technology converge.

Trumpism is driven by exurban voters. There just aren’t enough people in the rural areas to drive a competitive candidacy. It’s obviously the exurbs.

Exurbs are suburbs of suburbs. Their locations shift as people move further away from urban employment centers. When my folks moved to Orange County in the 1970s, Huntington Beach was an exurb. Today Riverside County, where my sister lives, is an exurb.

Exurban economies are based on gasoline and real estate. Drive until you qualify. The money is far away so you need a big car, and a lot of gas. Doing anything requires a drive. Serving the needs of a car-centric society is what the exurbs are all about, supporting people with shopping and services.

When I was young, exurbs were in fashion. Control of resources added more to economic growth than anything else, but for that to become value, the resources had to be used. That’s what exurbs do best.  Technology meant future growth, but only in the last decade has technology become central to the economy.

This is the important point.

The Elite Web

A lot of people like to complain about the lack of online freedom in China.

It’s true. The government there decides what people can and can’t see, what they can and can’t say. The social conditioning is impressive and made more impressive by the constantly-growing economy.

But if Jack Ma, or anyone in his Alibaba executive team, wants to learn something from the online world, or say something online, it’s not a problem. The same at a thousand other large enterprises. Freedom is doled out with an eye dropper, but for those who need it the firehose is available.

Is the situation better in our country?