Dana Blankenhorn

The Gating Factor

Why will liberals win in 2020, why should they win, and why should businesses applaud?

It has to do with the gating factor. 

The gating factor is whatever is limiting something. In an Internet session, it’s the speed of the slowest connection between server and client. This is true on a micro level as well. Chip companies put memory on-chips because the speed of data movement into processing is the gating factor. 

In an economy, the gating factor changes, usually every generation. In the early days of the Republic, the gating factor was labor. That’s why owning slaves made economic sense for Washington, Jefferson, and Madison. Then the gating factor became transportation, and then capital had to be organized. When manufacturing dominated, demand was the gating factor. Failure to grow demand by expanding the money supply caused the Great Depression.

In my generation, resources were the gating factor to growth. It made sense to invest in troops and military hardware who could control vital resources like oil.

In today’s technology economy, the gating factor is brains. Not just people, but smart, motivated, empowered people.

We’re just starting to understand what this means in terms of economic policy.

Jim Crow America and the Second Battle of Atlanta

A lot of ink is being spilled asking what’s the key state in the 2020 election.

Is it Florida? Ohio? Maybe Wisconsin?

No. It’s Georgia.

I wrote almost three years ago how Republicans are taking the Jim Crow approach to power.

Before Jim Crow, most southerners were black. They held power during Reconstruction and should have held power after it. Instead, Southern whites destroyed their franchise and murdered blacks with impunity. This injustice system existed for almost 90 years, giving southern whites the same level of federal power, as their fathers and grandfathers held under slavery, when black people were counted as 3/5ths of a white person. Under Jim Crow, black people were still counted, but they didn’t count.

The Trump strategy is Jim Crow writ large.

The late George Carlin might say we’re all Trump’s niggers now.

Eyes Wide Open

When idealists and pragmatists are scared, they react differently.

Idealists want what’s best for everyone. When attacked, we ask why and seek compromise. When the attacker rejects compromise, we panic.

Pragmatists will look to protect themselves. They’ll look for the enemy’s weakness and seek to take them down.

The difference between white and black Democrats is just that. White Democrats are idealists. We can afford to be. Black Democrats are pragmatists. They won’t let the perfect become the enemy of the good. Or even the barely OK. 

My black neighbors never loved Joe Biden. They supported him for practical reasons. He was Barack Obama’s “Uncle Joe.” Polls said he could win. But they also knew that Biden is a white liberal, always ready to compromise, to say “yeah, but,” to seek the good in everyone. Even a snake like Trump.

The failure of other white liberals to back Biden shook these voters hard. They were left adrift. They have one great desire, which is to win, to get rid of Trump. They’re also much more realistic than we white liberals about what might follow a Trump victory.

It’s not that Trump is a Nazi. It’s not that he’s a Confederate. These are the clothes liberals like to put on Trump supporters. That’s not what Trumpublicanism is about.

It's Jim Crow.

Generation Gap

I’m writing this before any caucuses, before any primaries.

But it’s clear to me what the story of the Democratic Primary is going to be.

The Generation Gap.

It’s back, baby.

The mystery of Bernie Sanders’ rising in January’s polls, to the top of the Democratic stack, is all about the Generation Gap. It’s now wider than it’s been at any time since Bernie here was on the other side of it, in the 1960s.

Iowa voters are well aware of how they're talking past one another. While Bernie was beloved of the young folks on Tuesday, Pete Buttigieg, the youngest candidate in the field, was favored by the olds. 

The Big Secret of 2020

The stock market is not the economy.

The fall of Trump is secure because of that.

Trump has long confused the health of the stock market with the economy. But 84% of stock is held by people in the top 10% of income. The bottom 80% own just 6.7% of shares. 

Whether it’s true or not that most Americans own some stock, as the nit-pickers at Politifact want you to believe, the fact is that prosperity is going to fewer-and-fewer people. (Thanks to two careers in tech, some of it is flowing to me.)

This trend has accelerated during the Trump time. Among the hottest stocks today are companies that cater to the needs of poor people. Dollar General is up from $60 to $160 since Trump’s election. A former Dollar General CEO, David Perdue, is a Senator from Georgia as a result. The other Georgia seat is held by Kerry Loeffler, whose husband runs Intercontinental Exchange, Atlanta-based owners of the New York Stock Exchange.

You may think Trump’s base consists of racists and mullahs, but it’s really moolah. A Goldman Sachs client survey shows 87% expect Trump to be re-elected. Hedge fund billionaires love this market, and they love Trump, even though they know his pumping of stock prices must end. 

I’m one of very few reporters working today who was doing this job in 1980. I’m on the same business beat I was on then. I was also politically active in 1980.

What Follows Evil Done in Our Name

What makes America exceptional isn’t that we don’t do evil.

Anyone who has gone through more than high school history knows that the United States is, at its heart, a European empire given a veneer of idealism we have yet to live up to.

America’s governments have endorsed slavery, committed genocide, taken power by force (starting in Hawaii), and overthrown any government of color we didn’t like. You may tell your kids whatever lies you like. Kids elsewhere aren’t fooled.  If anything, the evil done in our name has only gotten worse in my lifetime. Vietnam, Nicaragua, and Iraq are just the highlights.

What’s most interesting is that other societies can call this history what it is, history. When Trump threatened to destroy 52 Iranian cultural monuments, “one for every hostage,” he was talking about something that happened 40 years ago. The median age in Iran is 31. I talked with a Vietnamese math genius last year, age 28, and asked him about The War. His parents had no memory of it. It was from his grandfather’s time.

We’re stuck in a memory hole. The developing world is not.

The year 2020 is a turning point because the gating factor to growth today is human capital. Trained, agile, active, ambitious minds are where the money is at today, not oil.

America has dominated the economy of this century, so far, because we imported such minds. We also offered the greatest support to them, in terms of education, capital, and market opportunity. Trump has tossed things into the fire with everything else. An economic and demographic cliff yawn before us and his supporters don’t even see it.

Netiquette: The Issue for 2020

I covered the biggest issue of 2020 back in 1988.

I covered it in two ways.

On the one hand I covered the Electronic Networking Association for Newsbytes.

The ENA featured such cutting-edge minds as Mike Godwin and Joichi Ito. They met online, using software called PARTIcipate. They were communicating across nations and time zones. It was exciting.

They didn’t want to spoil it. They developed rules known as Netiquette to define proper behavior.

Netiquette can be summarized thusly: be nice. Assume goodwill. Be polite. Accept disagreement as legitimate. Don’t lie to make a point. Remain inquisitive and friendly. Understand that the person reading what you “say” can’t read your body language. Account for that.

Truth

Since finishing my book on Moore’s Law (for delivery on the Amazon Kindle after Thanksgiving), I’ve begun a new project.

It’s called 1933. (This is not it. It's a history by Philip Metcalfe I've been using in my research.)

It’s an alternate history novel. It’s based on the idea that FDR, and the people around him, understood the threat of Hitler from the start and acted against it.

That era had a lot in common with our own. Manufacturing was acting on the economy as Moore’s Law is acting on ours. Efficiency created more supply than bankers could create demand for. A few wealthy men presided over a society of millions of fearful people who couldn’t keep up with the pace of change.

The most charitable thing I can say about Donald Trump is that he wants to make Warren G. Harding great again. His policies are identical. Fealty to Wall Street, corruption, laziness, isolationism. He even uses the phrase Harding used to describe this – America First. Democrats, by contrast, have a Harry Truman view. They have learned from the Hitler era, and the long Cold War following it, about concepts like collective security. From 1947-1990, we used all our strengths, overt and covert military action, but also the “soft power” of diplomacy, our economy, technology, and liberty, to take down the Russians. Moore’s Law, and everything that came with it, began as a Cold War activity.

Now Trump’s throwing all of that on the fire.

It’s almost impossible to conceive a world where World War II did not happen. But it began quite suddenly. Hitler gained power as Chancellor in late 1932. By the middle of 1933 democracy had been dismantled, Jews were being brutalized, the first concentration camps were being built. Hitler, and his henchmen, were completely transparent about their aims. They accomplished those aims, and this led Germany down the road toward its complete destruction.

Fall of the Moolahs

A political tsunami is most likely when Wall Street gets out of step with the economy.

While it’s not yet showing up in the statistics, the U.S. economy is already in recession.

If you import or export, your business is down. If you’re a retailer, your business may be gone. If you’re a farmer, only the government is holding you up. If you’re a manufacturer and you’re not named Boeing, you’re struggling. If you’re in transportation you’re hurting. If you’re in the oilpatch, you’re dying.

The reason this isn’t apparent can be seen in the latest headlines from Maersk, the Danish shipping company. Their sales are down, but so are their costs, so their profits are up, and so is their stock. 

How can profits be rising, and thus stock values, if we’re in a recession?

Apotheosis of Nationalism

An apotheosis is the glorification of something to a divine level, the treatment of a human or institution as a god.

It’s a climax state. As with a swamp that has become a forest due to the steady deposit of leaves, it’s unstable. It’s the last step before a fall. Anyone and anything can become Icarus. Our doom is sealed when we get too close to the Sun.

Nationalism was born in the 18^th century. Ours was the first new nation. Nationalism has dominated political organization since the 19^th century, because it delivered leaders beyond those of royal blood. The reign of Louis XVI, then, was an apotheosis for the imperial model. The tumbrel began the end for the divine right of kings.

We’re now at the apotheosis of the nation state. Everyone is now part of a nation state. We can’t conceive of any other structure. Nation states, their leaders, and their philosophies send their people off to war for the glorification of “the people.” It’s a continuing competition for resources, both human and physical. Nationalism is the ultimate zero-sum game. For my nation to prosper, other nations and people must suffer.