by Dana Blankenhorn
  Volume IX, No. XVI

This Week's Clue: It's The Economy, Stupid

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This Week's Clue: It's The Economy, Stupid
SSP (Shameless Self Promotion)
Best of the Week
The American Diaspora
ZDNet Open Source
Clued-in, Clueless

Dana Recommends The Blankenhorn Effect offers a powerful, positive message for our time. Once you understand how Moore's Law impacts every part of your life, how powerful it is, and how irresistible a force it truly is, you will have the power to predict the future and know how to change it. Buy it today, and make 2004 a better year for yourself, your business, and your family.


For the Week of April 18, 2005

When the other side has power, it's natural for the party out-of-power to follow the governing party's initiatives, to criticize them, and to crow when they claim those governing are doing the work of a minority.

It's a fool's game. Here's the right way to play. Let history be your guide.

Two of the most bereft parties in American political history were the Republicans of 1965 and the Democrats of 1929.

The GOP 40 years ago was a house divided. Lyndon Johnson had won absolute control over country and Congress for his Great Society. Barry Goldwater had divided his party between people who governed, like Bill Scranton and Nelson Rockefeller, and those who merely offered rhetoric, like Ronald Reagan. He stood for rhetoric and went down in flames.

A generation earlier the Democrats were in an equally fine mess. Their attempts to split Republicans on social policy had only split themselves. Their leaders were all failures and retreads like Franklin Roosevelt, a crippled former VP candidate.

Yet both parties were on the verge of dominating politics for a generation. Why?

Issues came to them and they were ready with answers. Vietnam destroyed the New Deal coalition. That coalition itself came about because of the Great Depression.

Last week I wrote about a coming collapse in real estate prices. I don't know exactly when or how it will happen. What I do know is there are enormous excesses out there it will take great pain to work off.

The question is, who will face the pain? In the economic crises of the recent past - the dot-bomb, the S&L crisis - Republicans successfully transferred that pain. They did it by finding a new game for investors to play, real estate in this Administration and venture capital during Bush I. But those disasters were mere pinpricks compared to what's coming.

Dealing with this pain will require an entirely new political myth, with new values behind it, which can attract a new generation of voters for whom Vietnam and even the Gulf War are mere history.

Since the last election Democrats have been gleefully following down any rabbit holes Republicans felt like leading them. None of these issues are important.

The 2004 election settled one key question. The Iraq War will be ended on Nixonian terms, the U.S. declaring victory, getting out, and leaving the field to the Iraqi followers of Iranian mullahs. All the social issues that look so promising are, in fact, distractions, something Republicans are discovering as those incensed by them talk about killing judges. They will be forgotten, except by those on whose behalf the Bushes acted.

Warning about the coming collapse, as I did last week, won't do any political good either. Politics is based on the Flat Earth theory, and few see the waterfall until they're at the bottom of it.

The question becomes, how do we get out of this mess once we're into it?

In the case of the Depression, even Franklin Roosevelt didn't know the answer, and history shows he didn't really come up with one. What he did was engage in rampant experimentalism, the appearance of great action that was actually a set of small steps, bolstered by rhetoric and propaganda aimed at giving people hope for recovery and letting them know everyone was in the same boat.

He didn't cure the Depression, but he kept the country together. History shows that was enough.

That's the right answer for our time, too. Share the pain. Jail the criminals, take the hit for the middle class, and teach the lesson that we must all go forward together or we'll all fall separately, as we are in the process of doing. Then re-create old mechanisms that make sure gains are shared equitably. (And there will be gains - more on that next week.)

Republicans who read this should not lose heart at what I have written so far. There is a counter-example showing how they could, in fact, retain power through the middle of this century.

The Panic of 1893 was as destructive to the Civil War politics of its time as Vietnam was to the New Deal. Both parties had ideas for solving the problem. Democrats wanted cheap money to benefit farmers and workers. Republicans wanted sound money and lower tariffs to benefit investors. William Jennings Bryan laid out his specific plans in his "Cross of Gold" speech. It was a failure, because it was too specific in its roll of villains and too one-sided in its prescription of benefits.

When a crisis comes people prefer themes to prescriptions. They may say they want answers when all they really want is hope.

This brings us to a final ingredient in times of crisis, scandal. When times are good people will tolerate lots of scandal. When times get bad we may say we want revenge, but what we really want is for honest people to come forward.

The Roosevelts satisfied this need because they came from old money. They weren't in the market and were thus disinterested. They also demonized their own class, Teddy with anti-trust and FDR with labor policy. Thus they dominated politics for two-thirds of the last century.

What that tells me is that anyone associated with active investing or scandal, in either party, goes from being a liability to a millstone once we go over the falls. In fact anyone associated with the old order is a liability, no matter where they were in that order.

So if you're going to ever get involved in politics, kid, now's the time to get a move on. The party that comes forward with the most honest candidates, preferably those who have experience in dealing with financial crime, will have a big advantage with the new voting majority.

Eliot Spitzer for President.


Shameless Self-Promotion

I'm now helping to produce a special blog on Open Source for ZDNet.

I work as a freelance writer in Atlanta, and am on the development team for EgoScout, a new kind of mediator for mobile phone users.

My last non-fiction book, "The Blankenhorn Effect" won the Computer/Internet category in the 2003 Independent Publisher (IPPY) awards. Write me for a PDF copy of my latest novel, "Baptists are for Dunking."

On my Mooreslore blog I've written a new novel, "The Chinese Century." It's a story told in real-time, with real characters, but entirely fictional, dealing with the consequences of the falling dollar. I'm beginning a sequal, "American Diaspora," exploring the themes of the first book but with more fictional characters. It's a true alternate history, but set in the present day.

You are encouraged to forward this newsletter widely. And if you have trouble subscribing let me know. Remember: it's journalism that keeps the Clues coming...


Best of the Week

Spam is OK?

Today's big lie is a misinterpretation of the latest Pew Internet Survey. We think spam is no big deal.

Tyranny of the Beat

Yes, you can develop sources. Yes, you can develop expertise. But with a narrow beat you're limiting yourself, and you're becoming increasingly dependent on your employer, since beat knowledge is often non-transferrable. You're also more likely to "go native" with a beat, internalizing sources' views as your own without analyzing them.


Like Kremlinologists of the past, people are now analyzing Google's every move the way they once followed Microsoft.

Why Philly WiFi Will Fail

I am a big supporter of free WiFi. But Philadelphia's project will go down in history as a failure.

DNS Poisoning Threatens Intranets

If your company runs all its Internet traffic through an internal server, and that server runs Microsoft Windows, then you're vulnerable to a new type of hack known as DNS Cache Poisoning.

Online Gaming for Some Means Online Gaming For All

Once any state legalizes any form of gambling online, competition can come from anywhere, even overseas.

The Ugly Prince

He did have one Great Gift. The Ugly Prince was capable of a great love. For love he would be constant, he would be sincere, he would be earnest and true.


I've seen the TV ads and maybe you have, too. "Get a free ringtone. Simply text (whatever) and get (name of hit song) as a ringtone!" Well, it's a scam.

There And Here

One difference can be found in their attitude toward mobile phones.

Crack of Doom?

Much of the media ignored or downplayed Alan Greenspan's remarks yesterday on Fannie Mae and Freddie Mac, the two huge mortgage guarantors. History may well show this to have been a significant event. Greenspan admitted the U.S. economy has no clothes.

Will SCO Case Make the Finish Line?

It's beginning to look like the SCO-IBM case won't make it to the finish line, an end to discovery and summary judgement. SCO's sponsors are blowing up. Literally.

Who Sets The Agenda?

The great struggle of our time, between "major media journalism" and "blogging" involves who sets the agenda.

Journalists Still Don't Get Moore

Is Google Too Generous, asks Motley Fool, talking about Google's decision to offer 2 gigabytes of e-mail storage on Gmail. Hitachi Eyes 1 Terabyte Drives, writes MacWorld, noting new technology the Japanese company says lets it put 4.5 Gigabytes of data on a single centimeter of hard drive. I'm like, don't the first people read the second paper?

Jumping the iPod

You don't open up a new market by focusing on the seller side of the transaction. You open up a new market by focusing on the buyer side.

Down Laptop Lane

I bought a new laptop yesterday. And to my surprise I violated my Iron Law.

Finding the Good Stuff

The biggest problem blogging faces right now is it's hard to find the good stuff. Oh, much of the good stuff does get found. And, of course, what constitutes good stuff is all in the eye of the beholder.

What Medium Shares Grief Best?

Grief is shared through human interaction, but all we got on TV today was a simulation.


The American Diaspora

Table of Contents

ZDNet Open Source

Linux Development Moving Off Proprietary Tool

Open Source Hardware

How to Spin Statistics

Computer Associates' Cunning Plan for the CDDL

The GPL is Economic Imperialism, Sun Says

Meet the New Boss, Same as the Old Boss?

One Small Step for the OSI Board, One Giant Leap for Open Source Kind


Clued-in, Clueless

Clued-in is Larry Lessig with his call to oppose patent lawyers. He's right to call it a political struggle.

Clueless are any Democrats (like this one) getting their undies in a twist over whatever the Republicans want them to talk about.


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