(Note: This was written October 25, for publication October 30. If November 3 doesn’t turn out as this column anticipates, learn Chinese.)
As I wrote back in February 2019, Kamala Harris is to tech as George H.W. Bush was to oil. I thought she’d be the nominee but, like Bush, she faltered and will become Vice President.
Bush used the Vice Presidency to cement oil’s place in power for a generation. Reagan was the front man, but Bush did the work, bringing in his friend James A. Baker as Treasury Secretary, then using him as chief of staff and Secretary of State. The Baker-Bush tandem secured our alliance with the Sauds, fighting their war to control it against Saddam Hussein in Kuwait. Their power was secure enough to get through the Clinton years, and make American knees jerk twice for Bush’s son, who finished off Iraq.
Kamala Harris’ job is to do the same thing with tech that Bush did with oil, cement a generational alliance that can dominate American politics and return America’s prominence in business.
As I wrote then:
She won’t break up Google, although she may regulate it, which is not that bad. The costs of regulation would cement the Cloud Czars’ positions on top of the business world, for a generation, until some other industry comes to take over.
After 15 years of studying history on this blog, one lesson stands out, the Golden Rule. He who has the Gold makes the rules. When the leading edge of financial advantage lay in cotton, the South ruled. When it was in railroads, then utilities, Republicans ruled. Manufacturing was the Roosevelt era, Nixon and Reagan, oil.
In 2020, we have reached the height of tech dominance. Look at the market. The five Cloud Czars represent about $7 trillion of market cap. Their retinue, the hardware and software companies that supply their networks of “hyperscale” data centers, represent another $2 trillion. Tech is nearly half the stock market, and it infects the rest. You can’t do medicine, manufacturing, entertainment, or retail without tech. Every company is a tech company. As for oil, the frackers are dead and Exxon Mobil is worth less than NextEra Energy, a utility focused on renewables.
Government didn’t make this happen. The market made this happen. Technology made this happen. Research did it. Our research centers and technology industries are the blue wave that’s now cresting over Trump and the oil barons. Trump really was the Bizarro Carter.
Democrats are divided on tech. Republicans were divided on oil, too, with northern Republicans remaining suspicious of the Bush era until it was nearly over. Again, it’s the Golden Rule. The north is our manufacturing and agriculture center. These industries were totally dependent on oil and gas. Now they need tech.
Those Democrats who stand against tech make a lot of noise, but they’re not going to be making policy. Joe Biden will be making policy. More important, Kamala Harris will be making policy. Look closely at who is hired to staff this Administration, at where they come from and what their experience is. Look especially at who comes into the Vice President’s office.
The deal technology will make is the same one oil made, and the same one manufacturing made under the FDR Thesis of Unity. That is, regulation for power. Controls will be placed on what the Czars do with data, on how they manage their networks. But these controls will be run by tech people. It’s called regulatory capture, it’s a slow dance. It’s how modern America works.
The Cloud Czars are going to rule for a second reason. China. China is our rival, but it shouldn’t be a Cold War rival. It should be an economic rivalry, one where both sides win. That’s how it was under Obama. That’s at the heart of the Obama Thesis of Consensus. China isn’t communist. It’s not even socialist. It’s a mandarin autocracy, the President acting as an Emperor.
China has been built using a South Korean model. There’s fierce capitalist competition for government subsidy, with the subsidy gradually withdrawn as companies grow globally competitive. Just as America has its five Cloud Czars, China has its three Cloud Emperors – Alibaba, Baidu, Tencent. If we over-regulate our Czars, their Emperors will take over. The only choice is to manage the Czars as China manages its Emperors. Jack Ma is a member of the Communist Party.
As China has grown more prosperous, it has become as focused on diversifying its supply chains as we are in diversifying away from China. There’s enormous tension there, but it’s creative tension. It’s not the Cold War. It’s a war to save the cold. Both “sides” have a common enemy, climate change. Both sides must work against it. It’s like something I started saying nearly a half-century ago, “There’s not enough us to afford a THEM.” That’s going to be a key to politics over the next decade. We need to turn down the temperature or your grandchildren will lose this world to the cockroaches.
I haven’t mentioned Russia because oil doesn’t matter. I haven’t mentioned the Middle East for the same reason. The collapse of the oil cartel is something we need to manage, especially since fracking made us a part of it. But the market is on our side. It’s going to happen.
This is the real start of the 21st century. We thought it began 20 years ago, but only now are its outlines becoming clear. Only now can the hard work of re-terraforming Earth begin.
