Dana Blankenhorn

Dealing With China

I have a dog in the China policy fight.

Our 30 year-old son has a job waiting in Taiwan. He just needs a visa. Taiwan is slow-walking it because of COVID. China’s belligerence toward Taiwan means we have worries.

Most of what is being written about America’s China policy is bullshit. It’s Cold Warriors anxious for a fight, Republican apparatchiks looking to take Biden down, human rights activists who see China “getting away with it.”

Here’s what I think. Xi Jinping is in trouble. He pretends to be Mao but he’s not. There is opposition to his policies kept inside an opaque party. Jack Ma is still a party member.

China has huge debts. Property debts, government debts, corporate debts. There’s still room to maneuver because the Yuan trades at 6.45 to the dollar. That’s not a manipulation. If China were manipulating the currency it would trade at 7 to the dollar or more.

China has an energy crisis and an environmental crisis going on at the same time it’s the world’s biggest producer and buyer of solar energy. The floods that overtook the country this summer are a lot like California’s fires and Louisiana’s hurricanes, but they’re happening to 20 times more people.

Obama vs. Trump is Google vs. Facebook

There’s a false assumption in the land. Democrats are doomed in 2022.

For evidence, there’s the fact that parties in power lose in off-years. That’s been true 4 times in a row. But in 2002 Bush filled people with patriotic fervor. In 1998 Clinton filled them with anger over his impeachment. The real lesson is that political upsets happen when people are motivated. In or out doesn’t matter.

Republicans are in power in most states. Impunity is getting people angry. And when government is doing what you want, you’re as likely to relax Election Day as to crawl over crushed glass to vote.

The 2022 election will be a battle between Google and Facebook.

Barack Obama won because of Google. After holding a highly-publicized meetup with employees in 2007, the Obama campaign was created in Google’s image. It built giant voter databases, donor databases, volunteer databases. Based on those databases, it activated people through email to call on neighbors. It scaled the intimacy of the 2004 Dean campaign, which ran a popular blog but refused to build the database. It worked.

Donald Trump won because of Facebook. His team hacked the system. They used Facebook’s algorithm to gin up anger, to turn the social medium to their side. Anyone who clicked on a pro-Trump story was run down a rabbit hole of conspiracy theories. They became immune to anything outside the conspiracy. It worked.

Trump ran an identical campaign in 2020. It didn’t work. In 2020 he was the incumbent. In 2020, America was going to hell in a hand cart. Reality triumphed over conspiracy.

Stacey Abrams, who lost Georgia narrowly in 2018 to a Trump-like opponent, drove much of what happened last year. Hers was an inside-outside effort. Inside, her FairFightAction learned how the rules worked and fought to keep them as they were. Outside her databases identified Democrats and activated them.

Open Source Explains It All

Back in 2005 I was asked to take over a new “open source” beat for ZDNet.

It turns out to have been the most important story of my life. And yours.

Open source is software based on the radical idea that the more eyes you get on code, the better it will be. Without getting too deep into the weeds here, it works.

The benefits of open source, however, flow mainly to its users. In the old proprietary model, they flowed to developers. Microsoft and (especially) Oracle fought it so fiercely. They saw the “little guys” as ganging up to steal their competitive advantage. Microsoft finally surrendered, building a network of cloud data centers that has made it the second most-valuable company in the world. Oracle is worth barely one-tenth as much.

All of America’s biggest companies are now built on the open source idea. Apple built its cloud on open source. So did Google, and Amazon, and Facebook. Facebook extended this into hardware with its Open Compute Project. Netflix extended it into networking with Open Connect.

But open source relates to more than software, hardware, or technology.

Eternal White Majority

When my Irish ancestors came to America, this is how they were portrayed.

The whole point of the Scorsese movie Gangs of New York was to illustrate the contempt with which the Anglo-American majority treated Irish immigrants. They saw them as black.

The same thing happened later, with the Italians. Then with the Russians. But today you wouldn’t see Bruce Springsteen or Jerry Seinfeld portrayed as anything but white. Like Alec Baldwin. Like me.

When people write that America will soon be “majority non-white” this is what they’re ignoring. People can easily be made “white” when it’s convenient. By being made “white,” these same people can then look down upon other people, darker people.

Who is Xi Jinping?

What kind of man is Xi Jinping? It’s the most important question in the world right now.  

Cold warriors want you to believe that Xi is the reincarnation of Josef Stalin, an absolute dictator bent on world domination. A lot of big investors believe this. That’s why the values of the biggest Chinese companies, the ones I call “Cloud Emperors,” have been cut in half this year.

But China’s policies toward tech aren’t extreme, not by the standards of American liberalism. Let small suppliers choose their markets? Enforce antitrust laws against predatory acquisitions? Raise taxes, so prosperity flows from the middle class out instead of from the top down? Why, yes.

It’s true Bernie Sanders would never give the state a monopoly on personal data. Even Alexandria Ocasio-Cortez wouldn’t dare limit children to an hour of screen time a day. China’s “Great Firewall” runs both ways. Western data can’t get in, and Chinese can’t get their data out. This includes financial data, as the Bitcoin ban makes it harder for capital to flee.

But Xi’s got bigger problems than anyone here imagines.

Despite being the biggest producer of solar panels and electric cars, China is still like the Cuyahoga River in Randy Newman’s song Burn On.  The Evergrande Crisis, $300 billion in unpayable debt that must be wound down, is like the 2008 crisis that nearly took down the U.S. economy.

Young workers are revolting against a work culture called “996” – working 9 to 9 6 days a week. Those are the people whose support Xi is coveting. The people who grew up under a rising tide of prosperity since 1978 are no longer willing to pay the price  while the economic elites have everything all to themselves. If Xi stood in an honest election, I think he’d win.

It’s 1969 All Over Again

One advantage to aging is you get to see patterns in the history before you.

1968, for instance. It was a terrible year. I was there. There were riots, and assassinations, and a whole lot of young men who’d been drafted died in Vietnam. Then came the crisis election and we got Nixon.

Beginning in 1968, politics turned slowly to the right and continued to march that way until the vast majority of those alive in 1968 were dead.

Then came 2020. It was a terrible year. I was there. There were demonstrations, and environmental destruction. A whole lot of people died of COVID. Then came a crisis election and we got Biden.

Bin Laden Won

Twenty years ago, the fall of the American Empire began with the destruction of the World Trade Center.

Osama Bin Laden gambled that Americans would overreact, be driven crazy by the attack. He was right.

As a direct result America began a 20-year occupation of Afghanistan that cost over $2 trillion. As a direct result we invaded and overran Iraq, which had nothing to do with the attack.

Even after most Americans recognized the overreaction, electing Barack Obama in 2008, half the country remained consumed by fear. It was easy for the resource billionaires funding the Republican Party to transfer that hate onto Obama, then onto his party, then onto its individual members, just as 60 years earlier fear of Communism morphed into McCarthyism.

Thus came Trump. Thus came Trumpism.

Thanks to Trumpism’s excesses, almost half of us remain so tied to hate that we’d rather than die than take a vaccine. Most Americans, even most Texans, are against snitching on neighbors who miscarry. Most of us even believe in democracy. But enough of us stand against progress, and enough of those people are powerful, that as I write this the future of the American experiment remains uncertain.

Thanks to 9/11 and thanks to Trump, America no longer has any moral authority. China can get away with Xinjiang, and with seizing Hong Kong, because we look no better to the rest of the world.

Thanks to Trumpism, authoritarians are on the march and democracy is in retreat around the world. Putin can interfere in our elections, can use trolls to spin lies that tear at the heart of our system and prosperity. But we do nothing in response. Dictators simply close off the Internet from the outside, impose their own censorship on their people, and force feed propaganda to them. There’s an economic cost to all this. America’s technology dominates the world to an even greater degree in 2021 than in 2001. But that doesn’t matter.

Persistence vs. Passion

What America teaches me is that persistence, the lean of the majority, overcomes the passion of a minority.

Read any newspaper from the 1850s. Many northerners had sympathy for the South. In the South, Union sympathizers had to either keep quiet or pretend toward Confederate sympathy to survive. We all know how that turned out.

But the same thing happened in the 1890s, and the 1930s. Populists were always more passionate than progressives. Those opposing FDR were always louder than his supporters. Majorities are slow to move, and for those passionate on the majority side it’s frustrating.

The best lesson from my life was the 1960s. Those opposed to Vietnam were far more passionate than the “silent majority” who saw it as a Cold War activity. The War side won. It kept on winning for a generation. Pundits came to assume it would always be that way. Most still do.

I’ve tried to explain the back-and-forth in terms of what business needs. Cash crops like cotton represented the highest value of the 1840s. Railroads replaced them. Then utilities replaced the railroads, manufacturing replaced utilities, and resources replaced manufacturing.

Throughout my working life, technology has been rising. It now dominates. Politics is leaning toward what technology needs. That means immigration and education. It means climate activism and social equality. Clouds can leverage a single great mind to the value offered by thousands of mediocre ones.

Moore’s Law of Politics

There is no Moore’s Law of Politics. Quite the opposite.

As I have sought to explain in my continuing rewrites of my Moore’s Lore book  the values of our youth are taken into age. Longer lives mean obsolete beliefs bedevil democracy.

My own views were shaped by this generational delay. I believed that Democrats had a real shot in 2004, because we were a full generation removed from 1968. In fact, the 1960s dominated that campaign. So it was that when Barack Obama won, a man born in the 1960s I thought, well we won’t have Vietnam to kick around anymore. Again, I was wrong. The 2016 campaign was fought over the same old ground.

There are still voters who remember the 1970s, even the 1960s. I am one of them. But we’re finally a minority. While half the electorate was still over 50 in 2020 the median voter still had no memory of the Moon Landing.

Peace is also unknown to the average American voter. Most us of us grew up in the era of resources, of wars for oil, or the Cold War.

China

It’s in to hate China.

Jim Cramer, confusing Karl Marx with Groucho, keeps referring to the government of Xi Jinping as “Communist China.” Its efforts to fight tech monopolies there cost him money in Didi Chuxing, China’s Uber.

China is also a great whipping boy for neocons who want to get their war on after Afghanistan fizzled. They point to its crackdown in Hong Kong and the ongoing genocide in Xinjiang. Those are terrible crimes. But are they that much worse than Shock and Awe, or the ongoing beatings of protestors by our police?

These crimes cost China more than reputation. They cost money. Chinese taxpayers are in deep doo-doo already. The Sinovac vaccine turns out to be garbage. You can see the air, which is not supposed to happen. There are floods of Biblical proportions in brand-new Chinese cities. Economic growth is slowing. The stock market is down, so wealth is down. And you can’t trust the Chinese Internet, which is a bigger spy than even Facebook.

If things were like this in America, we’d be revolting. Critics like to insist that you can’t in China, but it ain’t necessarily so. China can’t match Taiwan’s semiconductor technology, despite buying its engineers with fat bonuses. Its biological technology is nowhere. Its science publications are rife with cheating, which means its papers are rife with lies.