Dana Blankenhorn

The 1944 Game

Where are we in terms of confronting the Trump Crisis, the great political challenge of our lives?

In terms of my parents’ generation I’d say we’re in 1944. In terms of their ancestors, it’s 1864.

We’ve passed the turning point. The death of George Floyd, the botched response to COVID-19, and the Administration’s response combined to help us turn a corner, as when the graph of the Georgia pandemic peaks at a great height and seems to turn. They were D-Day.

But we haven’t won yet. And we’re exhausted now, just as we were then.

My family is especially pessimistic. They see Trump controlling the agenda, they see his acolytes running police and the military, they fear the 2020 election won’t happen. These are reasonable fears.

But we had similar fears back in the day, easy to see by just looking at what people were doing at the time.

Movie goers remember 1944 for Going My Way,” with Bing Crosby,  or Meet Me in St. Louis, with Judy Garland, movies where the war had little or no role. It’s also remembered as the year of Bogie and Bacall, in To Have or Have Not.  Film noir, created mostly by German emigres, was rising even as the war ground on.

Good Trouble

My Congressman died last week.

John Lewis wasn’t built to be an executive. He was a legislator, the conscience of his time. He absorbed the blows and lived to become an icon.

John Lewis believed in “Good Trouble.” He practiced it, for longer than any other American, 60 years. In time, that’s the distance between Thomas Jefferson’s election and that of Abraham Lincoln. It’s the distance between Theodore Roosevelt and John F. Kennedy. From lunch counters, to city streets, to the U.S. Capitol, John Lewis never let up.

Good trouble means pushing people in power to do more, being a pest even to your allies. It means confronting evil, standing for what’s right. It means being unafraid, in the way Gandhi was unafraid, in the way Dr. King was unafraid.

In the way John Lewis was unafraid. Whenever I met him, he was gracious, wise, and conscious of his life’s meaning. He always humbled me.

But John Lewis was no plaster saint. When he wanted something, he could be ruthless. This is told in a story I witnessed. While it didn’t make his obituaries, it was featured in that of the man whose career he ruined, Julian Bond. 

Public Goods and Private Goods

Democrats re-made Woodrow Wilson into a liberal to win the peace of WWII.

The myth was that the peace of the Civil War, and that of WWI, were punitive. This hurt economies and led to new war.

Determined not to make those mistakes again Roosevelt called his alliance against Hitler the “United Nations.” His wife, the forever-underestimated Eleanor Roosevelt, was a key actor in creating today’s UN. FDR’s top general, George Marshall, became even more important after FDR’s death because of the Marshall Plan.

The Marshall Plan did more than just pour money into Europe’s economies. It created a new economic model. It assumed that, while private goods are important, there should also be growing demand for public goods. These include education, health care, infrastructure, defense, civil law, and the environment.

Putting Our 20th Century into Perspective

As much as we’re (rightly) reviling Woodrow Wilson for his racism, he’s still an important figure in liberal history.

Wilson named Louis Brandeis to the Supreme Court. He initiated the income tax and the Federal Reserve. During Wilson’s term, the 19^th Amendment was passed, giving women the right to vote.

But it’s what was done with Wilson’s memory that we should focus on. Wilson was one of only two Democrats elected to the White House between Lincoln and FDR. In building a history for his own ideas, Franklin Roosevelt didn’t have much to choose from. He had also served Wilson’s Administration as assistant secretary for the Navy and tried to succeed him as James Cox’s VP candidate in 1920, running on a Wilsonian platform.

Thus, Roosevelt used Wilson’s memory as a gloss to pass New Deal programs like the Tennessee Valley Authority, which transformed the South. Even more important was how Roosevelt used Wilson’s last crusade, on behalf of a League of Nations. You can see this laid out in the propaganda Hollywood produced about Wilson in 1944.

“Wilson” is garbage as history or biography. It starts in 1912. It ignores Wilson’s racism entirely. But as hagiography it’s first-rate. In it he’s an academic and reluctant politician, incorruptible, a relentless reformer. In life he was nothing of the sort.  

Better Days Are Coming

When you hit bottom, when you are at the end of your rope, when you're in true despair, you can’t imagine getting out.

America is at the bottom. We’ve found that what we said about ourselves was tissue thin. The economy has collapsed around our ears. Death is all around us.

But better days are coming.

We can beat COVID-19. We know how to do it. Other countries have done it. Europe and much of Asia are opening, coming out of their cellars, living again.

The key is cooperation.

That’s all it takes. Wear a mask when you go out, or a face shield. Try to stay home. Wash your hands. Stay away from other people. Love thy neighbor.

The virus travels on the droplets you expel when breathing. It travels fastest when you sneeze, but even those droplets don’t travel much further than 6 feet. If 95% of us cooperate with each other, then the rate of transmission will drop below 1 and we’ll be back on the downward slope again.

Why Jay Powell is Worse Than Trump

The COVID-19 pandemic was the greatest transfer of wealth, from the poor and middle class to the very rich, in the history of the world.

But the transfer wasn’t done by Donald Trump.

It was done by Federal Reserve chair Jay Powell.

The $2.3 trillion the Federal Reserve created out of whole cloth in March  went almost entirely to people who already had money.

Powell bailed out every bad and stupid bet the market had made. He bailed out the airlines. He bailed out the cruise lines. He bailed out the casinos and the oil companies.

Capitalism is supposed to be about private risks that can go bad, and risks that work fueling the greater good. At a stroke, Powell turned that truth on its head, removing the risk markets are built to protect, and socializing it. The vast majority of people were told to pay their rent and buy food while tens of millions were losing their jobs.

Carnival Cruise Lines should be out of business.  They bought back stock and handed out big dividends when times were good. Technically they’re not even an American company. While they have offices in Miami, they’re legally run out of tax havens. But if you bought Carnival when I said sell, on May 15, you’re up 50%. That’s because, after Powell’s actions, Carnival was able to borrow $6 billion from investors desperate for yield, something that was only possible because of the Fed’s money creation efforts.

Why Black Lives Matter to Me

You’re looking at the face of an old white guy and wondering about the headline.

Here’s the story.

I was brought up racist, on Long Island. I didn’t think that was the case, but I know now it was. I knew people like Roger Stone, Eugene Delgaudio and David Keane when they were kids. That’s because during the height of the Vietnam era I was part of a group called Young Americans for Freedom, a right-wing agitprop created by William F. Buckley when the SDS was getting started.

I’m not proud of it. I got falling-down drunk at age 16, and the hangover lasted until the day after school started. I told my parents I was sick.

We weren’t rich, but we had a lot of white privilege. It helped me get off Long Island and into Rice University, even though my parents had saved nothing for college. It got my dad a small business loan when he fell through a false roof and became disabled. The parents of the girl I married turned out to be well-off too. Most Rice parents are.

I was blind to my own good fortune. I saw myself as an idealist. I went to Northwestern, got a job at a business newspaper, and covered the end of the Houston oil boom.

The Cost of Free Money

With the Federal Reserve having thrown trillions of dollars into the economy, many people ask where inflation went?

Look at your portfolio.

What should have happened in March was that helicopter money would go into spenders’ pockets. That money would have then gone into rent, into food, and into other necessities, increasing the value of companies that made and sell those goods, keeping the economy going.

Instead, the money went to investors who, with bonds priced near zero, bought stocks. Meanwhile the economy collapsed.

Anything that works now carries a ridiculous price. Amazon.com (AMZN) is a great company, but is it worth 110 times earnings? Apple (AAPL) faces huge supply chain problems, so is it worth 27.5 times earnings? Microsoft (MSFT) is at 35 times earnings, and slow-growth Walmart (WMT) is at 25 times.

Money is also flowing into things that should be worthless. AMC Entertainment (AMC) admits its movie theater chain may have to go out of business. Yet the stock is worth $5.50 per share, the market cap is still $575 million. Luckin Coffee (LK) is practically Enron. It lied about its revenues and is facing delisting. But it still trades, at $2.61 per share, a market cap of $650 million.

There’s your inflation. It’s hiding in asset prices.

Trump vs. Tech is The Story of 2020

In his effort to maintain power through the pandemic, Trump deliberately divided America.

He got the smaller piece of it, and figures that’s OK, because Wall Street is behind him.

But that’s not where the money is. It’s why he’s going to lose.

Trump’s economic policies favor investors, Wall Street, and those who can work from home while paying our bills. By pushing out trillions of new dollars, mainly to people who didn’t need it, Trump brought the stock market back. He thinks the stock market is the economy.

It isn’t.

The Fire This Time

Over Memorial Day weekend, my wife drove my son back to his home.

What none of us knew was that she was driving right into the fire of our time.

My son is now a biochemistry Ph.D candidate at the University of Minnesota in Minneapolis. He wants to work on COVID-19, the virus that wrecked the global economy earlier this year, and that is putting America into its second Great Depression.

As she headed home Tuesday morning, the match was lit a few miles from my son’s apartment. George Floyd was murdered by cops using what had become a standard Minneapolis police practice, but which officer Derek Chauvin took to extremes. As most people know now, Chauvin kept his knee on the back of Floyd’s neck for 9 minutes, asphyxiating him. Killing him. Murdering him. Other officers stood by and did nothing.