Dana Blankenhorn

Defending Facebook

Let’s start with something that should seem obvious.

Facebook is no longer a social network. It’s the global telecommunications company.

It became this by offering free services on a global scale. This came about thanks to its investment in cloud, beginning early in the last decade. While AT&T sat on its assets, along with all the companies once known as PTTs (Postal, Telegraph and Telephone services), Facebook put $1 billion/quarter and up into a network of cloud data centers.

Facebook did it the same way Amazon did, with cash flow. It made its services free, like Google.

Moore’s Third Law of Management

What other analysts call “big tech” I refer to as “Cloud Czars.”

I do it for a reason.

What distinguishes Apple, Microsoft, Amazon, Google, and Facebook isn’t their managements’ “ruthlessness.” It’s their heavy investment, over many years, in cloud computing centers.

Even early in the 2010s, it took $1 billion of capital each quarter to get into the cloud market. That has only increased with time. Now it averages $4 billion each quarter.

The money must come from somewhere. Cloud is a capital-intensive business. If you’re handing out dividends, it’s because you don’t know what else to do with the shareholders’ cash.

Blessings of the Pandemic

The economy has tanked.

We are all in our homes, scared out of our minds.

But there are blessings amid the ruins.

The air is cleaner. The water is cleaner. It is quieter. Animals have come out of hiding around the world. People have re-learned the value of family. Science matters again. Community matters again.

There were pictures posted, early in April, of Venice with water you could see through, of LA without smog. Those were retouched. Things aren’t that good.

Still, they’re immeasurably better than they were.

The climate crisis doesn’t have to destroy that progress. Unless we have a death wish.

The Virus

The Coronavirus is Donald Trump’s Iran Hostage Crisis.

Just as I said the week he was elected, Trump is the Bizarro Carter. 

Analysts who think we’re too dumb to open a history book keep harping on how Trump reverses every Obama action. But the contrasts with Carter ring even more true, because they’re so stark, and make the future so clear.

Carter was the last exemplar of what I called the FDR Theory of Unity. It was something he used to fight the Depression and World War II. Democrats kept running on it for the next generation.

Trump is the ultimate expression of the Nixon Thesis of Conflict. There was the friendly side in politics, and there were the enemies. Over time Republicans, to maintain internal unity, defined more-and-more people as enemies. Today it’s anyone who defies Trump, by word or deed, in even the smallest way. He acts like the Sun God, but he’s more like the later Mao Zedong, the one who spawned the Cultural Revolution.

The Nixon Thesis killed a lot of people. It was used to justify a generation’s wars for oil, transforming the Cradle of Civilization into a charnel house. This is fine with Trumpublicans, who don’t see pain felt by others as meaningful.

But as Mel Brooks said, “Tragedy is when I cut my finger. Comedy is when you fall in a sewer and die.” A lot of Trumpublicans are about to cut their fingers, and worse, on the altar of Trump’s stupidity.

Say what you will about how China handled the virus. They got it under control. Once they became convinced of the reality, they took extreme measures, poured in immense resources, and within a month the number of cases was dropping.

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.

Solving Health Care

The health care crisis is curable.

It doesn’t require a government takeover. Most of the next year’s debates over health care will talk around the problem. They’ll be the same-old tired arguments over public vs. private control.

In the end it doesn’t matter. You can’t have an unlimited draw from a limited pool of funds. Make that the key to policy and you can develop sound policy. You don’t have a choice about buying health care. You don’t even have much choice on who you buy it from.

The solution has three parts.

Managed care. Bargain for drugs. Guarantee competition.

Let’s start with managed care.

The Fight in My Front Yard

I’m leaving next week for Europe.

Perhaps the most important day on my trip will be September 28, when I’m due to see my daughter in Vienna.

It’s not just important because I love her. It’s important that I check in with her regarding the most important issue facing mankind, climate change.

My daughter has been studying most of her life to be on the front lines of the battle. But what I’m finding is that the key to this battle may be right back here, in what was her front yard. If you want to know whether the climate crisis can be overcome or not, that’s where to start.

My daughter’s focus has been on urban animal policy. It sounds arcane, but it’s not. Whether or not we admit it, our cities and suburbs are part of nature, just as our forests and beaches are. They are ecosystems, where plants and animals live or die depending on our actions.

In Atlanta, that battle is being lost.

Twilight of the Cloud Czars

In 2019 five companies dominate the global economy.

I call them the Cloud Czars.

They are Microsoft, Apple, Amazon, Google, and Facebook.

These companies have a combined market cap of over $4 trillion. The smallest of them, Facebook, is worth more than AT&T and the Walt Disney Co. combined.

The Cloud Czars dominate retailing. They dominate media. They dominate computing and communications. According to politicians of both the left and the right, this means they’re illegal monopolists and should be broken up.

This idea is dumber than anything Donald Trump ever said.

One Nation. At War. With Itself

In August of 2019, the United States is a nation at war with itself.

We are at war with fundamental changes that must occur if the country, and the world, are to be saved from the Industrial Revolution.

We’re also at war with the essentials of economic growth in our time.

As I have written many times, the gating factor in technology is human capital. Trained, eager, free minds, willing to think the previously unthinkable, to model it and make it reality. This is where money is made today.

The more such people you have, the fewer of the other kind, the more money you make. The more freedom these people have, the greater their access to money, to new ideas, and to one another, the more your society prospers. This is Israel’s secret sauce.

Resources don’t matter. Machines don’t matter. Muscle doesn’t matter. Minds matter, more than anything.

Fall of the House of Oil

There is no energy shortage. The sun shines. The wind blows. The tides roll. We live on a molten rock.

At the start of this decade, when I first began covering the War Against Oil, and changed the sub-head of this blog to reflect that, I believed the key to victory was bringing enough investment to the space, public and private, so that the cost of renewable energy would fall below that of fossil fuels.

It’s happened.

Crossover happened just as I expected, in 2016. The cost of energy from solar panels is now lower than that from burning coal. The cost of energy from windmills is now falling below that of burning natural gas.

The only thing keeping fossil fuels alive in the big utility model is the sunk cost of infrastructure. When that proves unreliable, as it did in Puerto Rico a few years ago, it’s replaced by solar power, batteries, and micro-grid technology, just as Al Gore predicted two decades ago.