Thomas Paine (right) died penniless in 1809, the forgotten Founder. He died that way because he was a writer, not a politician. His writing was a demand, not a request or a negotiation. The words above were read to Washington’s men before they crossed the river at Trenton. Paine made ours a revolution, not just for the patrician, but the working man. Not just for the General, but for the private. Not just for those who would lead, but those who would die.
Every crisis has casualties. The year 1968 was marked by terrible casualties. The Great Depression and the following war killed tens of millions of people. The Civil War killed 2% of this country’s people, mostly young men in the prime of life.
Compared to that, the Crisis caused by Trump should be easy to overcome, its casualties minimal. But that won’t be. His Presidency reeks of all the worst in our history. It combines the greed of those around Warren Harding, the weakness of James Buchanan, and the racism of Andrew Jackson. The crimes are all done in plain sight, as Nixon’s crimes were done.
We’ve had some bad men in the White House, but never one whose soul belonged to another country. Trump is Putin’s man. It’s that simple. We beat Russia in the Cold War, but revenge is a dish served cold, and Trump is Russia’s revenge.
The year to come will be all about Trump. It can’t be about anything else. Can America throw off a foreign dictator when he’s already in the White House? Will we stand, once again, against the racism, the misogyny, and the brutality our forefathers fought against? Are we Americans or docile Soviets?
Against the Mullahs, against Moolah, against the militarists, the three arms of the triad that has kept the developing world in bondage for centuries, it seems we have only words, faith, and hope. The question seems simple. Whose side are you on – America’s or Russia’s? But those who fear the loss of their power over other races, and over women, won’t be swayed by words. It’s going to take the hard work of all of us to win this, and even if we win the battle the war to save the planet will have just begun.
We have one thing in our favor, and I’ve written the book on it. We have technology.
Many liberals damn the Cloud Czars. But our hope is with them, for two reasons.
- Because what the clouds demand of our society is something no tyranny can properly supply, human creativity.
- Because what technology creates, more than anything else, is deflation.
The gating factor in a technology age is human capital. It’s brains, not brawn. It’s not resources, nor is it capital. If it were Israel would not exist.
Technology lets software substitute for labor and resources. Its power is increasing over time, thanks to the clouds and wireless networks at a constantly accelerating rate. As was true at the onset of the Great Depression, we’re creating more value than we can recycle. Back then the answer was simply to increase demand. It won’t be so simply this time. We must find new tasks for technology to perform and create demand for those tasks where none exists right now. We must make economic war on behalf of this planet, when there’s an easy alternative available, war against one another. We must find ways to recycle the waste created by 200 years of industrialization. We must find ways to substitute renewable fuels, and efficiency, for oil and gas. We must find new things for all the people left jobless by technology to do.
But first there is deflation. The Obama Administration fought deflation through the stimulus, by handing a trillion dollars to bankers. The Trump Administration has fought it with its tax cut, another trillion to people whose only use for it was to raise asset prices. Trump has also tried to fight renewables on behalf of oil.
Because of Trumps support for oil, the coming collapse is going to be extraordinarily messy. That collapse has already begun. Alberta’s economy is in a state of collapse. North Dakota’s will follow, and then that of Texas. That’s because in the oil patch, supply doesn’t have to exceed demand by much to have a big impact on prices. Pricing also changes equity values. Chevron just wrote off $10 billion because it owns resources it can’t afford to bring to market. This is just the start.
But in 2020 the world’s economy floats on a sea of oil. The American dollar rules the world because you buy oil with dollars. We’re tied to Saudi Arabia by a Gordian knot of recycled booty. When they fall, and they will fall, it will cause enormous dislocation. The same will be true in other places that depend upon oil and gas. It will be true in Iraq, in Iran, in the North Sea, in Mexico, and in Texas. Because of Trump, we’ll fall too.
More important than any of this is that Russia will also fall. Putin’s regime rides on a sea of oil. Drop the value of that oil by one-quarter, by one-third, by one-half, as has happened several times in the past, and Putin’s Russia collapses around him. That’s how Reagan “won” the Cold War. He jawboned down the price of oil from the Arabs in the 1980s, and the Soviet Union had nothing else.
The problem is that, as a result of 40 years of history, oil holds up the dollar. Oil, its refining, and its use, gives our currency its value. Take out that value, and what else can the dollar buy? Take out that spending, and what else can be done with dollars? Deflation can turn your dollar into Pesos when everyone tries to use them at once, and all the value piled up over the last decade can fade into nothingness with the snap of a trader’s fingers.
This disaster is out there, waiting for us, and no one seems to see it. What will our economy do when it’s no longer turning oil and gas into carbon dioxide and smoke? This is how Trump has really tied us to Putin, through Texas. It didn’t have to be that way. Maintaining support for renewables would have made America master of the economic crisis to come, but instead we’ll be just another victim.
I’m no more ready for this than anyone else. My money is in stocks, in mutual funds, and in cash. American cash. I can’t see an easy way out of the economic dislocation that is heading this way.
I only know this. The economic crisis on the horizon will take out Trump, the Sauds, and Putin as thoroughly as our arms during the manufacturing era took out Hitler, Stalin and Tojo.
What will be left is for our children to decide, using the power of technology.
