Dana Blankenhorn

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.

What If Steve Jobs Were Evil?

If Steve Jobs were evil, he would be Mark Zuckerberg.

Zuckerberg was born in 1984, the year the Apple Macintosh was introduced. He founded Facebook in 2004. He launched Facebook’s program to build cloud data centers in 2011. His fortune was estimated October 5 at $117 billion, but that underestimates him. That’s because he controls the voting stock of Facebook, now worth $913 billion, so his power is greater than his money.

Facebook isn’t its eponymous service. It’s not Instagram. It’s not WhatsApp. Facebook is its 16 data centers, the thousands of miles of fiber cables connecting them with local centers, and with the world. About 1.6 billion people use Facebook services every day, according to its most recent quarterly report. Americans can take or leave Facebook, but people in the “Global South” depend upon it.

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.

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.

Electrify My World

When we moved to our current house in 1983, the heavy rail MARTA station next door seemed futuristic. Between 1983 and 2020 my wife took the train to work nearly every day, while I worked from home.

Today MARTA and the urban design it was meant to serve are obsolete.

Electric motors can be made in any size. Batteries are more efficient and cheaper. The cloud means warehouses can break bulk for less than physical stores. The pandemic let my wife recapture 3 hours each day, for chores and for living. She’s not giving that time back.

Work can happen anywhere. The world I wrote about 30 years ago in my book A Guide to Field Computing has arrived. An iPad can do the work of a PC, a phone, and a TV, plus it’s rugged enough for use in a manufacturing plant or warehouse.

Xi is in Trouble

Here’s something no one will tell you today.

Xi Jinping is in trouble.

There is an assumption in the West that, because China is run as an authoritarian state, and Xi Jinping is the President of that state, that he can do anything he wants.

I don’t buy it. The country is too big and too complicated for that to be the case.

Xi has been messing with China’s economy for a year now. Everything he does seems to make things worse. Going after the country’s Cloud Emperors – Alibaba, TenCent, and Baidu – made political sense. Most actions are in line with what western trustbusters would like to do with our Cloud Czars – Amazon, Apple, Facebook, Google, and Microsoft. But investors have been losing money.

Westerners don’t understand how much power the Cloud Emperors have. They dominate the entire economy, not just the cloud. Young Chinese are, if anything, more addicted to their phones than we are. They’re overworked, their homes are tiny, many are still living with their parents. The consumerism pushed by the economy, through the Cloud Emperors, has gotten pushback from millions who resent the “996” lifestyle pushed by Alibaba co-founder Jack Ma. The 996 lifestyle means working from 9 to 9, 6 days a week. This is a 72 hour workweek, not counting the time spent commuting or preparing for work. And for what, they ask?

Xi has reacted to this by attacking the phone-based playstyle that makes all this tolerable. Telling China’s kids that they can only be on their phones for an hour each day is what American parents were doing in the 1960s, attacking rock and roll. It’s out of touch.

BNPL Will End in Tears

The hottest trend in payments today is Buy Now, Pay Later (BNPL).

The idea is simple. The consumer agrees to pay a bill over a few months rather than immediately. The merchant gets their money upfront. There’s no interest charge, just a bigger discount (up to 8%) to the merchant, plus more big orders. Everyone is happy, right?

What it means is that the BNPL provider, whether it’s Afterpay or Affirm, Klarna or Sezzle, is stepping in for the credit card bank, where interest rates can be 20% or more. If you’re buying stock in Affirm right now, you’re buying a consumer finance company.

There are protections for the BNPL guys, but they’re limited. They could hammer the credit ratings of consumers who don’t pay. They could raise discounts on merchants. Since the field is new both sides need to read their contracts closely.  They won’t.

Atlanta Density Done Right

If you want housing density, make neighborhoods more attractive.

That means adding small parks and amenities people can enjoy within an easy walk before you add housing. If the area doesn’t have them, build commercial-office structures with apartments on top. If you do this backwards, you’re building a slum.

Cities are changing. So is transportation. If I can get most of what I need within a mile, I can use an electric bike unless I need Costco. Maybe I won’t even need Costco. Then rent a van for vacations, use something like Uber for nights out, and we’re good.

Lots of urban people already live this way. The idea of maintaining a car when you’re only using it an hour per day (or less) is wasteful.

But this only works if your area is walkable. This only works if you can get coffee and essentials around the corner, if your lawyer or accountant is nearby, if you can walk your dog and find a park in 10 minutes, with trees and benches to sit on.

Atlanta knows this.

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.

The Dictator’s Internet Advantage

“Credibility is the coin of the realm.”

That’s what Northwestern’s Medill School taught me, when I was getting my Master’s in Journalism back in 1978. (That's also when this picture was taken.)

This was reinforced during our school trip from Chicago to the media capital of New York. I literally sat at the feet of William Shawn, then still editor of The New Yorker. We were paraded through the offices of Time. We sat for a spell at the Top of the Week, a bar on top of Newsweek’s headquarters building. The lesson was that someday all this would be ours if we were just loyal to our employers.

I’m the last member of my graduating class still be working a beat because I didn’t believe a word of it. Credibility is a personal value, I argued. It’s not something that can be granted, like a knighthood.

But American media companies remain wedded to the idea of credibility as a corporate value. It’s why so few are international in scope. That’s because credibility, in media, is mediated. It’s a continuing negotiation among media companies, their audience, and government. It’s a balancing act.