Dana Blankenhorn

What Comes Next

After the market falls, when everyone is in despair, is when I get the most excited about the future.

That’s because recessions aren’t so much an ending as a beginning.

A recession means the old games no longer work. The oldest business processes disappear entirely. WE have seen this during every recession of my working lifetime.

Small towns fell under the onslaught of Walmart in the 1980s. Big boxes replaced department stores in the 1990s. In the 2000s, whole layers of middle management disappeared. In this decade, gatekeepers like insurance agents have gotten the boot.

Common Carriers

A key to understanding 2019 will be the issue of common carriers.

In just one decade the “Cloud Czars” – Apple, Microsoft, Google, Amazon and Facebook – have replaced the telecommunications and broadcast industries with a new system, using their infrastructure.

We don’t make overseas calls anymore. We Skype. We don’t watch TV. We stream.

The cloud was built without government subsidy or interference, in a competitive free for all in which the winners invested while the losers did not. The industries replaced by this infrastructure were built as monopolies, under systems of regulation controlled by the Federal Communications Commission and, when necessary, courts.

This made sense, in terms of both capital preservation and technology, at the time.

2019: Crime in the Suites

My adult millennial children are both conservative, but in the nicest possible way.

They have ethics. They expect correct behavior from authority. When they don’t see it, they want it punished, not with a wrist slap, but with jail time.

I agree, and 2019 will mark the start of a process toward getting it. Justice is slow, but it is certain.

If 2018 was the year when crime was stripped naked, with the MeToo movement, the Trump treason, and corporate theft, 2019 will be the first year of retribution.

This becomes certain when you look at the economy. The next year may be the most readily predicted, indeed eagerly anticipated, recession of my lifetime.

2018: Halfway Through the Gauntlet

Kids are taught in history that Gettysburg was the turning point of the Civil War, and that Operation Torch, the invasion of North Africa, was the turning point in World War II.

From July 4, 1863, the South never invaded the north again. From January 1943, the Nazis and Japanese never again had the initiative.

That’s not the way things were to the people living through these crises. While these events were celebrated, people knew better.

I believe it will be seen that November 6, 2018 represented a similar turning point in the crisis represented by Donald Trump, and the invasion of the West by Russia that is, even now, escalating in Europe and the Ukraine. But a turning point isn’t final victory. It doesn’t even mean victory is in sight.

Good News in the Next Recession

The U.S. economy is heading into a recession.

This should be obvious. Trump threw a party for his friends a year ago, but the $1.5 trillion bill must be paid.

That means interest rates are going up. Housing and autos are already tanking. Companies that want to borrow money are going to find it more expensive. The lucky ones might get the equivalent of adjustable rates, but those will adjust higher.

Meanwhile, private debts must also be paid. There’s a mountain of private equity debt out there, along with a mountain of student loan debt. There’s a global market of debt, much of which will be unpayable. Bad debts will have to be written off. Thanks to Obama, our banks will survive. I can’t say the same for Europe’s.

Tsunamis vs. Waves

As soon as it became apparent that Democrats would win the U.S. House, analysts began asking whether this was a “wave” election.

It wasn’t. It was a tsunami.

It’s easy not to understand this because most political scientists aren’t taught the difference between a wave and a tsunami.

The waves that daily hit the shore of the Bonzai Pipeline, on Hawaii’s northwest coast are often 12 feet high. But a wave, no matter how high, will break upon the beach and do no damage, except perhaps to the surfer who doesn’t catch it right.

A tsunami, on the other hand, is caused by forces deep inside the Earth.  A tsunami may be shorter than an ordinary wave, but it will do tremendous damage, because of the enormous power behind it.

The 1979 Game

When you win the popular vote by 9.5% but still lose ground, as Democrats did November 6, your problems are systemic.

The result underlies tech’s obligation to come out of its shell and fight for the political system that birthed it.

Tech moguls have done some things. Jeff Bezos bought The Washington Post, Marc Benioff bought Time Magazine, Laurene Powell Jobs bought The Atlantic. The key to gaining more power will be in creating journalism business models beholden to tech interests.

Tech must do to Bizarro Carter what oil did to Jimmy Carter, and for the same reason -- to protect its self-interest.

The Climax State

One advantage that biologists have over economists and political analysts is a clear understanding of a “climax state.”

A climax state, whether it’s a swamp filled in by peat, a redwood forest, or a planet filled with huge dinosaurs, is the most vulnerable thing in nature. It only looks stable. But a fire, or any sudden conflagration, can destroy it utterly. Mankind has, in the last thousand years, created such a climax state.

This was all described to me in the summer of 1991, when we took our family vacation around our home state of Georgia and found ourselves riding in a canoe through the Okefenokee swamp. Our guide described how the life-and-death competition among plants and animals leaves organic matter behind, which fills in the water and creates little islands, which are eventually connected as more water disappears. But these islands are highly flammable. A fire in the swamp clears them out, leaving a new swamp for creatures to compete in.

It's lack of competition that makes ecologies vulnerable.

The 1978 Game: Dialing Nixon to 11

I hate to brag, but I wrote about 2018 over a decade ago, when I first published this blog’s most important piece, “The Nixon Thesis of Conflict.” 

Here is how I described it then.

“Its assumptions include the ideas that political adversaries are enemies, that politics is a form of war, that attack is always better than defense, and that the system is always under threat from outside.”

It is only because those people who came of age during the Nixon period still live, and dance to its tune, that we have Trump. Trump is the Nixon Thesis of Conflict, dialed to 11.

• Trump supporters deny the reality of trans people.
• Trump supporters are racists.
• Trump supporters are sexists.
• Trump supporters hate Hispanics.
• Trump supporters hate gays.
• Trump supporters hate China.

Trump supporters distrust technology. They ignore climate change even while Florida drowns. They want to give health care to the “free market,” even knowing that doesn’t work. They want to kill Social Security and Medicare, having already handed that money to defense contractors and billionaires. They hate Medicaid. They prefer private colleges to public ones.

Oh, and they want to privatize the VA.

Isn’t there something wrong with this picture?

If you’re hating on most people, and calling them “haters” when they resent it, aren’t you just asking for trouble?

The Future is Not American

I was noodling on a story about the cost of Trump when I realized an important truth. (This is Ladi Delano, Nigeria's youngest billionaire. From millionaire.ng) 

Because of Trump, the future is not American.

I don’t know whether the future will be based in China, or in India, or even in Africa. I just know it’s not going to be here.

Because of Trump.

Barack Obama had a dream, of an inclusive society, multi-ethnic, diverse, and tolerant, that would attract people from all around the world and keep America from falling down the demographic cliff single-ethnic societies were falling into. We would beat China by attracting their best minds, renew ourselves with immigrants from every land and remain forever young.

It would have worked.