Dana Blankenhorn

The Gun War is a Race War

 

This is something not enough people say out loud.

The “Second Amendment” bullshit of the modern GOP was always meant to create a race war.

The plan was simple. Flood the country with guns. When white people use guns, defend them regardless of the circumstances. When black people use guns, attack not just the users of those guns but their political leaders, the places where they live, and any liberal impulse.

In today’s Republican Party whites are always the victim, blacks always the perpetrators. It’s precisely what southern Democrats did after the Civil War. Eventually, northern Republicans anxious to do business relented, ending Reconstruction and damning U.S. Grant before history along the way.

When I moved to Atlanta, historians were still in the thrall of Henry W. Grady, who edited the Atlanta Constitution in the 1880s, soon after Reconstruction ended in northern defeat.

His “New South”  speech basically said, “We still hate n%*## but we’re ready to do bidness.” There’s still a statue to Grady in downtown Atlanta, although his name was recently taken off the high school my daughter graduated from. For his time, Grady was considered a liberal. This is what Republicans now have in store for everyone, if the current "Second Reconstruction" can be beaten back. 

The GOP plan, using the Grady approach, is the same false choice employed by autocrats around the world. Divide and conquer. If you shout loud enough, nuance looks like weakness. If you shout loud enough about victimhood, even genocide can be countenanced.

The Biden response is to get past the virus and get people back to work. The question is whether that will be enough. Election Twitter seems to believe it won’t be. Lefty Twitter is increasingly in agreement. 

But if delivering jobs and prosperity is worthless in the face of a race war, maybe democracy isn’t a good system of government after all. Maybe, in that case, strong man rule is the only possible outcome, hoping that the strong man has smart Mandarins behind him.

If the President is wrong, maybe it’s time all of us learned Chinese.

Bubbles Don’t Really Pop

History will record that the Trump Bubble burst on January 6, with a coup attempt organized by Donald Trump. (The picture is from Doc Searls' blog.)

I have seen many bubbles pop in my experience as a business reporter. The best-known was the dot-com bubble. It popped on January 10, 2000 when Time Warner announced it would “acquire” AOL.

The precise date of the popping is only remembered in retrospect. At the time, business went on. That spring I attended a trade show called ad:tech, on my employer’s dime. Even a year later I was able to take my wife on a trip to Hawaii because of an Internet commerce conference on the Big Island.

My most vivid memory of that ad:tech conference was on a bus, heading back to our hotel after a day spent on the water, sponsored by an Internet ad agency that eventually sank with the rest. A young entrepreneur was complaining that each new round of funding was requiring more equity from him and generating less cash. “It’s unfair,” he whined.

I’m a cruel man. I laughed until I cried. Later, at the event’s award show, a block “CNN” ad won awards for creativity. I laughed until I cried again. The people around me thought I’d gone crazy. It was just that I saw the handwriting on the wall.

The point is that even after a bubble pops, many people will remain unaware of it. They will continue to take the bubble as a real thing. They’ll go in even-deeper. They’ll consider falling prices an opportunity, telling folks to “buy the dip.”

Be Your Own Brand, Become your own business

This is the first piece of advice I give young journalists. It’s one I was taught in the 1970s was anathema.

Be your own brand.

When I was at Northwestern’s Medill School, in the late 1970s, I was told a journalist “is someone who works for someone who buys ink by the barrel.” This has since been changed to “bits by the gigabyte” but it remains true. Journalists are defined by who they work for. You are your job.

(This is a publicity picture taken at my first post-Medill job, with the Houston Business Journal.)

But it’s a one-way street. You can give your publisher all your loyalty and, should the needs of business demand it, you’ll still be on the street. (I've been there.) The only way to protect yourself is to define your beat, to specialize, and become “the leading expert” on it. Then (and this is the hard part) monetize it.

This is the part of the new job journalists hate. I feel for you. I hate it, too. But if you want to make a living at this, you must do it.

This starts with social media but doesn’t end there. If you’ve gained expertise advertise it and become a source. Start a side gig, a blog or e-mail newsletter. Incorporate, and treat yourself as a business. This means that you can consider stepping over lines your j-school taught you never to cross, but which your publisher-employers crossed as easily as you walk across the street.

It used to be that the only alternative to a newspaper or magazine job was to go into PR or ghost write. That’s not true anymore. You can solicit advertisers or take money from politicians if you like. You can go on TV and spout off if you’re asked. You can do podcasts, send out your own press releases. You can mine your market, in any way you can, if you’re willing to take the risks that every other businessperson takes.

Whip Deflation Now

While most people my age remain scarred by the inflation of the 1970s, I’ve long known something they didn’t.

Deflation is the problem.

Technology is naturally deflationary. Moore’s Law, the idea that chips could get better and better faster and faster, also means more output of everything, for less money.

We’ve seen this with every recession of my career. In the 1980s, computing cut warehouse space and distribution jobs. After the dot-bomb of 2000, it came for middle management. After the Great Recession cab drivers, hoteliers and retailers were thrown on the fire.

The pandemic has squeezed 10 years of technology change into one, as business has been forced to adapt. A lot of these changes are permanent because they cut costs.

Most knowledge workers will never return to their offices. Schools and colleges are being forced to use online resources to increase efficiency. Malls may never re-open, replaced by online shops. Ghost kitchens cut the size of restaurants. Fintech is replacing banks and brokers with apps. Semi-autonomous cars don’t need drivers. Electric cars don’t need oil.

Efficiency piles on efficiency. Even credit card processing carries technology debt. Bank and brokerage settlements can be replaced by apps, value replaced by digital stablecoins, everything can be done on the cloud.

Every Valley is Silicon Valley

A year into the COVID-19 pandemic Silicon Valley is in a funk. This is “the end of Silicon Valley as we know it,” Tim O’Reilly writes. 

Uh, no.

The pandemic has proven that you can do a lot of tech jobs from anywhere, as I’ve been doing since 1983. Silicon Valley was uniquely positioned because it was where the money was. Thus, it was where the deals were. Thus, it was where the jobs were.

But once you have the money, the work (and your life) can easily be elsewhere. This has been true in Hollywood for generations. Most stars don’t live there. In the search for lower costs, film production is always on the move. To Albuquerque. To Atlanta. To wherever you can make a deal. Eventually, the deals are made where the work is being done. Tyler Perry is just one example.

The same is true for the money business. The New York Stock Exchange was a TV set long before the pandemic. Businesses and brokers are everywhere. Billionaires live where they want. It was the grunts and the strivers who were locked into Brooklyn apartments, commuting over the bridge to Wall Street. Technology is spreading the wealth.

The question isn’t why this is happening to the Valley. The question is why didn’t this happen sooner? This is going to have enormous economic and political implications.

It won’t take too many more remote workers in Boise, Laramie, and Billings to turn Idaho, Wyoming, and Montana as blue as California. Brains are the gating factor to economic growth everywhere, and when brains move to the countryside, they bring their values with them.

The efforts of Florida and Texas to lure “Silicon Valley” there with tax breaks is going to change those states. Tech companies need a steady stream of highly educated, motivated minds to grow. That means more money for research, more liberal academics in College Station, and eventually the whole thing tips over.

The pandemic has collapsed 10 years of technology change into one. But that change isn’t reversing. If anything, it’s accelerating from its previous pace. Technology’s needs are now the needs of all business. Every business is now a technology business. Every valley is Silicon Valley.

This Will Get Me in Trouble

Asked what his members wanted the answer of union legend Samuel Gompers was simple. “More.” 

Despite being encouraged by liberal interests, unions are the most conservative institutions society has. They advanced most during the 1930s, when manufacturers sought to control input costs and keep production going. Remember, too, that the Great Depression was caused by deflation. Labor assured limited inflation.

While Cloud Czars like Google and Amazon create deflation, they also fight unions because unions limit the flexibility they see as essential to their mission, fostering rapid change.

Some act surprised that Amazon is fighting this battle in Alabama. Bessemer is next to Birmingham, the state’s industrial heart. Birmingham was first called the “Magic City” because the steel mills there seemed to spring up by magic. It’s not an antebellum town. It was, for many years, a union town.

The Next Market Move

Right now, what’s working is overpriced, what might move is ridiculously priced, and what should move is barely priced at all.

Cloud Czars like Apple and Microsoft are trading for more than they should. Their price to earnings ratios hover around the mid-30s, their dividend yields are below 1%.

What might work, speculative EV stocks like Workhorse Group or pot stocks like Tilray, carry prices you can’t evaluate at all, based on the size of the businesses.

What should be moving are companies focused on increased demand from the economy. The COVID relief package is going to pass. It’s going to give Democrats the support needed to do more. Both private and public demand are going up.

This means “value” stocks, grocers like Kroger, landlords like Simon Property, and even oil companies like Exxon Mobil, should be exploding. They’re not. Exxon is up, but that just brings its dividend yield to 6.9%. Simon is yielding 5%, and Kroger’s price to earnings ratio is below 10.

There’s more money running around than there are good places to put it. Investors aren’t chasing returns, but “alpha,” which means returns higher than the market. All the children are not above average.

China

President Biden is right.

China is not our enemy, but it does represent “extreme competition.” 

The difference between the two is simple. If they’re our enemy, then only one side can win. If we’re in competition, both sides can.

This is not a popular view. It’s popular to hate China. We hate China because of the Uigyurs. We hate it because of Hong Kong. We hate it because of the South China Sea, and the way it threatens Taiwan. Some say the country is accreting territory from neighbors like India and Mongolia.

But China’s autocratic ways can be used against it, assuming we maintain America and the West as reasonable, attractive alternatives. That means welcoming Chinese immigrants and their money. Tyranny also hurts creativity.

But there’s one area where China is smarter than we are. That involves its Cloud Emperors.

The Big Tech Conspiracy That Wasn’t

Once you show you like something, I offer you more of it.

Is this a conspiracy?

Not unless I’m a scaled Web site. Because this is at the heart of the charge against “Big Tech,” the companies I call Cloud Czars.

• Show a preference for certain videos on YouTube and YouTube offers you more videos like them.
• “Like” things on Facebook or Instagram, and you will get more things like them.
• Follow certain celebrities on Twitter, you’re offered more like them.
• The same with Amazon Kindle books. When you buy something from Amazon, you’ll be followed for days by ads offering the same thing.

The algorithms follow human nature. Chances are that if you like a book about 12^th century monks who solve murders, you might like another one. If you like Henry Winkler, you’ll probably like Ron Howard.

The problem is that if you like crazy conspiracy theories on Instagram, or videos describing the terrors of the Illuminati on YouTube, you’ll get more of them. Like those, you’ll get more. And more and more.

Stop Trumpism by Ending the Gerrymander

I don’t want this to become a political blog again. I have little faith in politics.

But there is a political issue that isn’t being discussed regarding the next two years. It needs to be discussed. It can change the future trajectory of the country.

The issue is redistricting, and gerrymandering.

The word “gerrymandering” refers to Elbridge Gerry (right, from Wikipedia). He signed the Declaration of Independence. He was at the Constitutional Convention. It was years after that, after becoming Massachusetts governor, that he signed the law which made his name, redrawing legislative districts for partisan advantage.  An opposition newspaper published a cartoon showing one district as a strange animal with claws, calling it a “Gerry-mander.”

The point is that gerrymandering is legal. But modern technology has made it scientific. It now takes enormous statewide majorities to overcome a legislative gerrymander.