For the Week of March 17, 2003
NOTE: The last few weeks have drawn me several flames for recent Clues. I've been writing about politics, and some correspondents are intolerant toward my view. Well, deal with it. I'd much rather be writing about e-commerce, but this is the story right now, and I follow the story.
For many months now I've been describing current events in terms of American history. Astute readers have picked up mentions of Vietnam, of the McCarthy era, even of Grover Cleveland.
But now we enter unknown territory. A historical collision has begun that will determine the fate of American politics for the next generation. The answers will not come from me, and probably not from you. The answers will come from those born after 1968, the millions in "Gen X" or "Gen Y" who have grown up with the assumptions of the Nixon Era. It is they who must live with the full results of the choice. It is they who will make it (and not making it is also making it).
For these people Vietnam is something they read about in history books. Even Ronald Reagan is only vaguely remembered, a TV presence, like Mr. Rogers or Mr. T. Their real memory of history may start with the end of the Cold War, or even the election of Bill Clinton.
The assumptions they've been brought up on are mainly conservative. They've been taught that sex, drugs, and rock lead only to AIDS, overdoses and hearing loss. When they get angry they do the pimp roll, play ghetto rap or (sometimes) embrace Medieval Christianity. The enemy, in other words, is us, we who brought forth the Internet, the SUV, the Rock Concert, Megalopolis, Global Warming and a host of other deficits, both real and imagined, they feel it's their job to deal with.
What young people want is what they've always wanted. They want to believe in something, to fight for something, to make things better, different. Conservatives have done better than liberals over the last decade in embracing these twin needs for rebellion and certainty. For secularists there is the certainty of religion. For the religious there is the preaching of Limbaugh, and O'Reilly. For the parents there is a Guiding Principle of American Supremacy. We represent truth, and our failures (if there are any) should be blamed on Clinton, Carter, and "All Who Question." So practice Social Darwinism with a Jesus fish on your pick-up. The parting on the left is now a parting on the right.
There are natural limits to this myth, limits we are now approaching, in Iraq, and in the economy. With Democrats cowed, with liberals in retreat, at some point you have to take responsibility for bad results. American Protection starts smelling like American Hegemony. Trickle-down economics starts smelling like the Divine Right of Kings. So counterweights are sought, in Russia, India, France, even in China. The embrace of weakness, through Islam (submission), leads to asymmetrical warfare, but when you're submitting to Medievalism all destruction (even your own) is simply God's will. (In the end the appeal of Al Qaeda is self-limiting.)
Some Clues. Ideas have more power than armies do. Balance is a normal human impulse. For every action (even a political one) there is an equal and opposite reaction. A thesis and antithesis leads to a new thesis.
It seems accidental, but it's not. A new political philosophy is emerging. For lack of a better term, I'll call it a Philosophy of Balance. (When the guy from Time calls, refer to it as Berlinism. )
Here is a short list of elements:
- Balances can be adjusted, but balances must exist.
- Nurture the economy, balancing supply with demand.
- Fight fire with water, with policemen and firemen, not just with fire.
- The world and its agencies deserve trust and respect.
- Listen to the market, but maintain the balance.
This philosophy is as old as the Founding Fathers. (So is the myth of American Hegemony.) But the language of the American Constitution is all about balance, between institutions, interests, branches and levels of government, between government and the people. No one gets everything they want, and neither power nor rights are absolute. This makes sure everyone keeps working, struggling, striving. If you want perfection, look inward. If you want unconditional love, get a dog. (If you want universal tolerance, get a cat.)
The Internet has brought this inner voice of America to the world, and most of the world has heard it as a need for balance. But others have heard only a need for control. Right now this is especially true in America, because the countervailing forces arrayed against its powers seem so weak, and a Final Triumph appears within the grasp of Nixon's Children. I've been told by friends overseas that Americans must redress this balance, but right now we can't. Events, and the liberty that Internet technologies have unleashed, must do the work in the short term.
If people in France or Japan or Australia want to fight against this war their weapons are economic and cultural. I'm not talking here about boycotts or disinvestment (although it's your money - put it where you want). It means we need new cultural images, new inventions, and new growth controlled by you. The balance will only truly be redressed as the Internet economy becomes more of a global competition, when Silicon Valley exists everywhere, so no American government (no matter who controls it) can call the tune and force the world to dance.
Americans of a certain age, meanwhile, need to turn this idea of balance into a political philosophy that younger people can get behind. It must be something that creates a coherent myth, that endorses compelling values, that creates new power for the next generation, on this planet and beyond, and that can compete with the myths of Nixon's Children, as a choice and not an echo. Some of that work is already going on, but much help is needed. Give America (and the Internet) your very best thoughts, and help build this Philosophy of Balance for the next generation to embrace.
War is what happens when the talking stops. But wars end, and then talk must return. Make sure you have something to say.
SSP (Shameless Self-Promotion)
The reviews (well, some of them) are in. "Dana, it is GOOD," raves Pete duPont, lawyer, futurist and once a candidate for President. "This is some really powerful 'stuff.' I think you've got a winner," says Drew Kaplan of DAK Catalog fame.
Find out what the excitement is about. Buy The Blankenhorn Effect at Amazon.Com , then go back and say nice things. You can use the ASIN number, 1553953673, and recommend it to readers of other, similar books. You can also save on shipping when you buy the book at Amazon, over the cost of buying it elsewhere.
If you can convince some more published reviewers to read The Blankenhorn Effect and recommend it to their readers, please send me a name and address. In exchange, you'll get the PDF version of my second book, The Blankenhorn Effect: Boom, Bust & Beyond. This is a collection of columns from a-clue.com, organized chronologically and by subject, with additional commentary from yours truly.
I have begun working full-time for MediaPost , but I have also written lately for BtoB Boardroom and Mobile Radio Technology . You can follow the continuing story of The Blankenhorn Effect on my "Moore's Lore" blog . I also contribute to NowEurope and GreaterDemocracy .
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Takes on the News
Success on a Cul de Sac
The success of The New York Times in drawing profit to its Web site has newspapers around the country seeking to emulate it. They're forcing registrations to build "qualified circulation," turning off both outgoing links (from their stories) and incoming links (from the rest of the Web) in search of short-term profit.
That move is accelerating, especially at The Times. Every visitor is being pitched to "buy" a "membership." Second-page links on stories seldom work (unless you click refresh), and the second-page link itself is an artificial construct (online pages don't have lengths). Now we're getting full-page ad displays that stall even broadband users. The paper is forcing you to pay attention to its ads, something it never, ever did in print. Every indication is this will get worse. Newspapers around the country are following The Times closely, and slowly copying each of its moves, usually without its implementation skill.
This works in the short run and in a down time. Those who practice Internet values have nothing to argue against it. Internet media has no business model at all. (Begging bowls and Amazon links are not a business model.) Why not, then, build a cul de sac?
Especially since so many companies, like The New York Times Co., are looking forward to even-more media consolidation. The "burden of proof" on the current media ownership rules now lies with those who want to keep them, not those who would do away with them . Dr. Robert Pepper of the FCC told the AAAA meeting in New Orleans the agency's evidence indicates monopoly pricing only exists on the local level in radio - national advertising rates remain competitive. Thus, a new media buying frenzy will start soon, and everyone sees short-term profits as their arms in that war.
Unfortunately, short-term thinking closes you off to the long-term, and on the Internet media assets are much easier to build than buy anyway. The best solution in Internet media remains a "blended" business model, one that supports incoming-and-outgoing links in some sections (basic news, shared discussions) but that keeps other assets behind various firewalls (registration, e-mail lists, and paid). Newspapers will never share the databases they're creating, and they will never look beyond their specific geography. Magazines will appear and disappear virtually at will, leaving their industries and lifestyles with no long-term memory at all.
These are huge opportunities. These are worlds you should be exploring. When growth returns, blended business models, valuable databases, and true market making will again be paths to success.
Call A Crime A Crime
The firing of Frank Quattrone has led to another round of soul-searching, especially in Silicon Valley. After all, the Enron and Worldcom scandals happened on "Wall Street." The CSFB scandal happened in the Valley - Frank was "one of us."
It's true that what Quattrone did in the 1990s' IPO market was standard business practice, and this was known by many people (including yours truly) at the time. That doesn't mean the crimes were the fault of its victims. That doesn't mean Quattrone, or the other San Jose Sharks, should get off scot-free.
One reason for the reticence and blame shifting, of course, is the current Administration's record regarding these mega-crimes. Ken Lay has not done a perp walk. No one at Worldcom has been convicted of anything. If the crimes of the oilpatch and the telecom collapse aren't being pursued, why do we expect anyone to go after the IPO market?
History shows this is not unusual. Herbert Hoover didn't go after the 1920s criminals either. Instead he fought Prohibition. And confidence in the markets steadily declined through the early 1930s. Hoover, in fact, didn't believe any laws were broken in the Wall Street Bubble, just as the Bush Administration thinks no crimes were committed here.
Confidence didn't return to the markets because of Hoover's neglect, and it's not returning now. On an historical basis (of price-earnings ratios) stocks today are still overvalued. That's why Warren Buffett is only nibbling on junk bonds, where he can control possible bankruptcies, convert big winners into equity and gain both high interest and asset values if things work out. For stocks to be truly cheap their P/Es must reach single-digits.
Perp walks, indictments, disgorgements and jail terms don't make things better, but they're important confidence-building measures. So are new rules to keep the same tricks from being played next time. For the market to rise now we need human sacrifices.
Reaction to the Job News
Reaction to news I'm working full-time was almost distressingly positive.
Never mind the modest salary. Never mind that it's outside my normal beat. (I'm covering newspapers, for gosh sakes!) Never mind what I had to do in order to get the job. There was unbridled joy in Clueville, mixed with sad stories of other job hunts, and others' financial setbacks.
There is a vital lesson here. The U.S. economy is in much worse shape than it appears. Millions are working or blogging simply to keep busy, hoping for jobs instead of building careers. Talent is being wasted, as plowshares are beaten into swords, and fear has completely replaced greed.
I hope that it's up from here, but hope is a faint thread, made of silk and not nanotubes.
Clued-in is former Fed vice chair Alice Rivlin . Stimulate demand and you give capital a return.
Clueless is the U.S. District Court ruling , now being appealed, that could make ISPs and other online services liable for information posted by users on Web sites. The court's reasoning, the idea that the defendant became an author by asking its users to answer questions, is completely specious. Content creators are not immune from libel suits, but asking people to answer questions isn't creating content. It's merely an excuse to send lawyers out to chill Internet speech.
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