Dana Blankenhorn

The Cloud Czars and the Oil Barons

History shows that a dominant industry won’t get off its butt and take power until three things have happened:

1. Interests opposed to it take power.
2. The economy gets driven into a ditch costing the dominant industry equity value.
3. The government, rather than being embarrassed by this stupidity, vows to create more trouble.

When I first started researching political and economic history here, back in 2006, I saw generational cycles. I even saw that these cycles were driven by economics. I did not see that a political crisis continues until the newly-dominant industry seizes power.

The last time this all came together, in the form of an election, was in 1980. Ronald Reagan took power on behalf of the energy and media industries. The first was most important. The first provided the money.

Oil was handed considerable power under Nixon, in the crisis election of 1968. They got this almost without asking. They had been with Johnson, they stayed with Nixon. There were oilmen in the Ford Administration as well. But Jimmy Carter was elected in defiance of oil’s interests. He tried to rein-in the power of the oil barons, and their Middle East allies. He wore that cardigan sweater, symbolizing his opposition.

The industry organized against him.

Unions and Management

Unions are, by their nature, conservative organizations.

Their aim is to protect members from change. Workers whose skills drive change, like computer programmers today, don’t need unions. Biology researchers don’t need unions.

But most other people do, because without unions competing in the marketplace, without labor being as organized as capital, imbalances grow that can tear any society apart. That’s what is happening now. The imbalance of power, between labor and management, between workers and owners, is tearing the fabric of American society apart as we watch.

I’m often asked whether I’m liberal or conservative, left or right. I’ve been both. Mainly, I’m for balance. I’m for muddling through. I’m for open competition, and for maintaining competition after the capitalist game ends and most players lose. Only government can maintain that balance, when it’s supported by the people and their interests. Unions are one such interest.

To say, “I’m for the unions,” however, as many liberals do, isn’t an adequate answer. Because, as I said, unions are conservative. Give them power and they’ll slow progress. Union bosses can be corrupted, and can corrupt everything they touch, because like managers, like entrepreneurs, like government officials, and like writers, they’re human beings.

Nature of Money, Nature of Man

When I wrote my “anti-Trump polemic” early this year I thought I was writing about politics.

It turns out I was writing an economics book.

I learned this while reading a biography of the late Jane Jacobs, best known for her fight against the “urban renewal” of Robert Moses. After that fight Jacobs moved to Toronto, becoming one of Canada’s most beloved intellectuals, and there she wrote an economics history book, Cities and the Wealth of Nations. 

In this book Jacobs identified cities, rather than farms, as the original source of wealth. It was cities that turned wheat into bread and beer. It is cities that transform everything.

True, as far as it goes. But how and why remained a mystery to Jacobs. The nature of money eluded her. It’s something my recent book explains by looking at American history and seeking what I first saw as political patterns in our national life, and later concluded were economic patterns.

The answers, in our time, strike at the nature of money, the nature of man, and why, even after Hurricanes Harvey and Irma, there remain people like John Stossel who continue to deny the reality of man-made climate change. 

Wealth, it turns out, is entirely man-made. This is more controversial than it seems. Politicians have always believed wealth to be a product of holding land, or of exploiting it. They see history as great men moving lesser men around like pawns on a chessboard. Social historians, by contrast, focus on the real lives of ordinary people. These are important, but they are no more relevant to economic history than land is.

The Price Must Be Paid

On the same day that he achieved his greatest triumph, Barry Lynn got fired.

Lynn was a scholar for the New America Institute, a Clinton-era think tank meant to stand against conservative groups like the Heritage Foundation. There, Lynn developed a strong case against monopolies and their control over politics.

Monopolies, by their nature, see their first job as maintaining their own status, and the monopoly “rents” they obtain from consumers as a result. AT&T is a great example of such a monopoly. They create a whole raft of political front groups, which chime in whenever the company starts making political demands, on a state or federal level, even before courts. The original name for this site was based on my support of a 2005 book by Bruce Kushnick detailing this. 

Here is what I have learned since then.

All business trends toward monopoly. We have known this for over a century. This is because monopolists create efficiency. Standard Oil lowered costs and made oil production “cleaner” than it had been in the Wild West Days of the industry, the late 1860s, when drillers filled old whiskey barrels with the product, loaded up horse-drawn carriages, and whipped those poor horses down mud to small refiners. By contrast, the Standard delivered product efficiently, via pipeline, to large refineries and delivery systems that could invest in creating many different products from it, then ship the results around the world.

The Good News About Trump

Sometimes it seems like we’re playing the 1942 game.

There are few people alive now who remember what 1942 was like. After Pearl Harbor, it seemed, the Axis and the Japs were on a constant march forward, while America and her allies were in constant retreat. Freedom hung in the balance, The Man in the High Castle was about to become a real future.

We got through 1942, and I believe we’ll get through 2017. I believe 2017, like 1942, will also teach us enduring lessons, lessons three generations of Americans will retain for the rest of our lives.

The global threat of Trump, the reality of a Trump presidency, is teaching us those lessons.

First. The American System is more than the Presidency.

It’s more than Congress, more than the judiciary.

The American system has robust checks and balances everywhere. There are institutional checks throughout the bureaucracy. There is the voice of the people themselves. There is Wall Street and technology. There is the media. America is a highly complex system. Journalists and pundits oversimplify it to our peril.

The power of the Presidency rises and falls based on the character and popularity of the President. Barack Obama embraced the complexity. He was a successful President by any measure. You may not like his program, but he got it through.

The End of the Beginning

Every American political crisis eventually leads to violence, to acts of war.

Vietnam was a real war, but so was the conflict over that war here in America. The Progressive Era, at the turn of the last century, saw sporadic violence throughout the period from 1890 to 1915.

Who wins the war is not always obvious at the time. I would argue it’s the side whose values define the next era which has won. Never mind that almost all the violence of the Progressive Era ran against the rights of workers. Their values won. Never mind that Nixon was elected, and re-elected, during the Vietnam Era. The protestors’ values won.

Every political crisis is an opportunity, and an obligation, for a new generation to stand up and be counted, to define what their America is all about.

Stupid In, Stupid Out

The U.S. economy is going to start rolling over soon.

I can’t give you a date. I just know it’s going to happen.

It’s an easy prediction to make, because since January we have had stupid policy coming out of Washington. Jim Cramer doesn’t think Washington can crash the economy, but Roll 212. 

This is not just me talking. The International Monetary Fund has taken down its estimates on U.S. growth, citing Trumpian stupidity.  Tech funding is declining with more of the money going to mature companies, less to start-ups. That’s not what is happening in other countries – they’re flying.

No Such Thing as Health Insurance

Politics, theology and economics agree.

There is no such thing as health insurance.

There is care. There is non-care.

But insurance is a bet against odds. You bet with the car insurance company you’ll get into an accident. You bet with the life insurance company you’ll die.

This is not true with “health insurance.” The need for care is a certainty. The need varies by age, by circumstance, and by chance. But everyone needs regular, preventive medical care. Nearly everyone needs some type of medication to deal with mild symptoms like headache and stomach upset. Nearly every woman of child-bearing years needs birth control. Nearly every kid falls or gets sick more than once a year.

Timing a Turn Toward Truth

Three weeks ago, I suggested it was time Google took responsibility for the news business, paying for links through a journalistic process that would turn the industry away from fake news, clickbait, and paywalls.

Like most of what I write, the piece was ignored. But the “newspaper industry” did make what it thinks is a move in the right direction, asking for permission to bargain as a group with Google and Facebook, unionizing so it could demand cash from the industry’s bosses. 

Sorry, but it doesn’t work that way. The papers don’t get to define what they write as true and take someone else’s money for it. As every working journalist knows, our industry follows the Golden Rule. He who has the gold makes the rules. The papers’ suit shows they know Google has the gold. Thus, Google should make the rules.

Amazon.Com vs. Trumpistan

Given that this past week was Prime Day, it’s worth noting that if there is one company to blame for the troubles of Trumpistan, it’s Amazon.Com.

Amazon is behind all the trends that are destroying the lives of Trumpistanis, before their very eyes.

The Amazon cloud, sold as Amazon Web Services, powered the app trend that destroyed the jobs of suburban gatekeepers, the insurance agents and real estate agents, the travel agents and editors who are now apps. This took the leadership out of many suburbs, as effectively as a decapitation.

Amazon’s store, and its marketplace, have since destroyed retailing. This was another big source of suburban jobs.