Public ownership of the data we create

This is the Fox News headline that triggered my thinking:

This is socialism. 

But let's not call it that. Let's call it tax reduction. Or a dividend.

North Dakota claims an ownership interest in the income from the oil and gas found in that state. The result is lower taxes for residents. Fox cheers.

Alaskans also share in the income from oil and gas drilled in their state. They pay no state income tax or sales tax at all. In fact, Alaskans get paid annual dividends from the Permanent Fund accumulated from oil revenue just for staying alive and living there. Alaskans like it.

When I was a county commissioner in Jackson County, Oregon, the county was a beneficiary of this form of resource socialism. Jackson County government had general fund and road revenue from timber harvested in the county off U.S. Forest Service and U.S. Bureau of Land Management land. The income was so substantial that the county had 1000 employees when I was elected in 1980 and we had essentially no county tax. Timber revenue pretty much paid for county government.

Andrew Yang ran for U.S president in 2019 and 2020 with an idea that seemed fantastical. He said that the U.S. should pay an annual income of $1,000 per month to each and every American citizen. It would replace most public assistance programs, he said. It wasn't welfare. It was our dividend from an ownership interest in the data that Americans have given to our technology companies. That information is valuable -- perhaps as valuable as the revenue businesses get on the margin between what they sell and what it costs them to make what they sell. Businesses, especially tech companies, scraped the data from our libraries with information accumulated over centuries. They gather our universities' research. They collect data from our phone calls, our grocery purchases, the movement of our cars, our electric usage, our traffic cameras, our emails, our TV shows -- the entire wealth of American commerce and culture. 

Andrew Yang drew curious crowds trying to absorb the idea that there was value in that data and that it belonged to the people who created it.

 

A lot has changed in the past six years. Artificial intelligence has become a central issue in our lives and it is creating fortunes that are distorting the economy and our democracy. Companies that are involved in the industry have multitrillion-dollar valuations. The idea that there is value in the information that informs AI doesn't seem crazy at all. It seems obvious. AI is creating value, but it isn't creating information; it is organizing it and giving it back to us. We taught AI what it knows, and are doing so constantly. The raw material that AI processes comes from us. 

The political insight to absorb is that the original data is ours, and like the oil beneath the surface of North Dakota and Alaska, and the trees in the forests of O&C counties, the public has a right to a dividend from its extraction and use. We don't deserve all the income from AI, but we deserve some of it.

I don't know the fair amount of income we deserve from the AI Permanent Fund. Let's debate that. It may not be $1,000 per American. Not yet, anyway. But it should be something, and my purpose here is to assert its justice and fairness, and to put Andrew Yang's proposal back on the table.

I start this post with North Dakota and Alaska to make the point that even red-state legislators and Fox News think a certain amount of socialism is a good idea. They aren't calling it socialism, of course; they are calling it tax reduction. That's OK. Alaskans call it a dividend. That's OK, too. Its foundation is a premise that is moral and political: The public has a legitimate claim on raw material resources extracted from within its jurisdiction. 

This is an idea with bipartisan potential, so long as Democrats have the sense not to insist it be called "socialism."

The future has caught up with Yang's insight. We aren't supplicants. We are owners. If AI wants our data, and it does, then it needs to pay us for it.

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Easy Sunday: Slash, Burn, and Run

Do you remember "Chainsaw Al" Dunlap?

In the 1990s he was a famous CEO at Scott Paper and appliance-maker Sunbeam. A few days after taking over at Sunbeam, he unsheathed his stock in trade: He fired most of the company's senior management, and announced 6,000 layoffs, about half of the firm's work force.  Sunbeam's stock soared. Then it crashed.

John Coster's guest post on Trump, who sold Americans that he was a turnaround CEO for a failing country, brought back memories of "Chainsaw Al."

Some of the most valuable assets of a company or a country are built up over generations. It is a reputation for integrity, reliability, and fair dealing. It is expertise within the employees. It is trust.

Coster had a long career managing multimillion-dollar development projects for high-volume users of electricity. He recently retired -- or is trying to. Amid the rush to build data hubs on Earth and in space, large technology companies keep trying to lure him back to work. They need his expertise.

Guest Post by John Coster

Your post Saturday quoting The Wall Street Journal got me thinking about how Trump, the “Turn-around CEO,” weaseled his way into power with the tacit endorsement of the business elite where he operates with a kind of corporate-valuation mindset. In this model, the CEO and his executive team drive up market valuation by slashing costs that produce short-term earnings that cause the market to react favorably for a few quarters. The CEO gets rewarded on earnings and market cap (or higher valuation for a sale) even if the long-term impact on the business is net-negative. Or worse, some of these companies just disappear, or get absorbed into something unrecognizable. The market understands these guys and plays the game.

Trump convinced enough people (think of the voters as the "Board of Directors") that the country was in his words “a disaster”; undervalued if you will, and only he could “turn it around.” And he promised to do it with swift, decisive and merciless action on trade, taxes, immigration, slashing environmental regulations, and entitlements – and especially all that social-equity malarky. Enough of the “The Board” liked what they heard and hired him – again.

 
Just like a typical “Turn-Around CEO,” he began doing what he said with little pushback from those who could if they had the courage. In this second re-hire, the assets he’s been stripping are not just financial; they are non-monetizable things like reputation, trust, and good-will, the loss of which is hard to restore. He is insulting our allies. He is threatening invasions. He treats trading partners like enemies. Ultimately the burden is on the well-being of the people who put their trust in him, and the likely irreparable damage to our admittedly imperfect, but working systems of government that will be impacted for generations to come. Like corporate raiders, he is impoverishing everything he is overseeing -- with the single goal of enriching himself and his insatiable ego.

And now the venerable WSJ notices.

 

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Things fall apart

The Wall Street Journal admitted in an editorial this morning what I wrote about earlier this week.

Trump TACO-ed on Iran. He chickened out.

Trump has a glass jaw.

I gifted the short editorial here.

Here are some highlights:

Mr. Trump said at his Wednesday news conference. In so many words the President said the Iranians had him over a barrel—of oil. If he had fought on, the market “would go down at levels that nobody ever saw before, maybe except for 1929,” he said. “The one President I did not want to be was the late, great Herbert Hoover.”

There you have it: Mr. Trump was driven by fear of high oil prices and a falling stock market going into the midterm elections. . . .

The U.S. had options but Mr. Trump blinked at the risk. Instead, after two months of cease-fire weakness while the public soured and oil reserves declined, the President acknowledges he gave in to Iran’s economic pressure. . . .

The more hope Messrs. Trump and Vance express in the Iranian regime’s transformation, the more desperate they sound. How else to read their sudden defense of Iran’s missile program, after stopping it had been a declared U.S. war aim? Wishful thinking can’t cover up this deal’s origins in White House fears. As the President himself admits.

I understand that readers might presume that I take an uncharitable look at Trump because I mostly vote for Democrats, and because I have concluded that Trump is a narcissistic, corrupt autocrat with no respect for the country he leads. So of course I would write that his only principle in foreign policy is his own personal political advantage. But I am not alone. The Wall Street Journal shares my opinion.

But the blind cult of Trump is fraying. MAGA "America First" isolationists feel betrayed, and wonder if we are being led around by Israel. Israel hawks feel betrayed, so Trump is getting hurt in both directions. The Epstein mess makes Trump look like he is hiding something, which, of course, he is. Trump's fixations on the 2020 election, on the ballroom, on gold adornments, on the reflecting pool, on a grandiose arch, seem like sideshow distractions to all but people deep in the cult. I would like to think that bona fide Christians are uncomfortable with the way that he presents himself as a tight-with-Jesus Christian warrior. It looks like blasphemy and idolatry to me, but polls show that evangelical Christians are OK with Trump, so far at least.

The Wall Street Journal represents what remains an important part of the GOP coalition: the business establishment. That is a group that wants orderly, rule-of-law enforcement of contracts and patents, predictable interest rate policy, limited regulation, and low taxes on the wealthy. The establishment wants the government to leave it alone unless, and until, they need to be rescued, at which point they become socialists and claim that they must be subsidized to save capitalism and jobs for the downtrodden. I watched this happen in 1985 (savings and loan crisis), 1987 (Black Monday), 1991 (insurance crisis), 1998 (Long-Term Capital collapse), 2000 (internet bubble pops), 2021 (9/11 attack), 2008 (mortgage bubble triggers Great Financial Crisis), and repeatedly in Trump's terms of office whenTrump bailed out farmers to mitigate the effects on them of tariff retaliation, and at key points in the past decade when the government bailed out SpaceX and Tesla. 

The Wall Street Journal is inconsistent and hypocritical, but the newspaper is clear about its interest in defending the business establishment. Trump wants business to do well and he wants the stock market to soar, but he wants it so he can brag about it and be glorified by it. The WSJ is getting clear that Trump's goal is his own wealth and glory, not the country's, and that while the goals theoretically run in parallel, in fact they do not. Trump will happily flout the rule of law, and orderly, predictable process to achieve his goal of personal influence. For the WSJ government ownership of businesses is bad per se, it is socialism. For Trump, the government owning a piece of a business is a source of personal power -- a very good thing. It is a string he can pull to get something he wants. 

Trump is not governing the country on behalf of the WSJ. He is governing it on behalf of the audience of Fox News which glorifies and empowers Trump personally. They are different and, increasingly, they are in opposition. 

Things fall apart.

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Vietnam déjà vu

I got fury in my soul, fury's gonna take me to the glory goal
In my mind I can't study war no more
     Laura Nyro, Save the Country, 1968

Does bombing a foreign country change hearts and minds there?

Yes. It backfires.

Dropping bombs on Vietnam

I imprinted on the music that I heard in my youth, approximately 1963 to 1973. I also imprinted on the lessons of the Vietnam War of the same era. I studied that war by osmosis, the way I listened to music. I was surrounded by it. 

It was an idea universally acknowledged during my youth that the Japanese attack on Pearl Harbor was a tactical victory and a strategic mistake. The Pearl Harbor "sneak attack," changed American minds. Instantly opposition evaporated to our "gettin in" on the war waging in Europe. Attack us, and Americans united in opposition to the attacker. That was settled history, and remains so.

America's youth had learned the origin story of American independence: the brave Minutemen fighting the large imperial power, using guerilla tactics against the Redcoats. We knew something about the Boston Massacre. British troops fired upon protesters. The bad guys were Britain, its king, and their troops.

The Pearl Harbor story fits into that mindset. The attacker is the bad guy bully, and its attacks backfire in the long run. Vietnam fit the pattern in the minds of the anti-war youth.

The U.S. sought regime change in Vietnam. It wanted a pro-American, anti-communist regime. Ho Chi Minh admired the U.S. and its founding documents, but he was a communist, and that was enough for our leaders. Presidents Lyndon Johnson and Richard Nixon spoke of the need to win the "hearts and minds" of the Vietnamese people. One reason Vietnam was so hard to pacify was because so many "innocent-looking" civilians, supposedly on our side, were secretly helping the Vietcong. President Johnson understood we had a persuasion problem. He said:

So we must be ready to fight in Vietnam; but, the ultimate victory will depend upon the hearts and the minds—of the people who actually live out there.

The tactic to win the hearts and minds was the military. We would create pain so great that they would give up. We reported comparative body counts. We celebrated killing 10 enemies for only one of ours. Anyone we killed was an enemy or potential enemy, so that counted. Surely pain would cause them to give up. A saying attributed to Johnson summarized the plan:

 When you've got them by the balls, their hearts and minds will follow.

President Trump's original war aim was regime change in Iran. It was a reasonable desire, and indeed a less evangelical, less Islamist Iran has been an American goal since the Iranian Revolution in 1978. Trump called on the Iranian people to rise up; demonstrators were brutally repressed. The U.S. has a tool: overwhelming military power that could administer pain to the Iranian regime and public. I presume that our bombing the girls school was an accident -- a mistake in targeting -- but I note that our government is not offering a big mea culpa. Stuff happens. There is a logic to not admitting grievious error because what we were doing was creating pain, and what is more painful than having schoolgirls killed as collateral damage? It is Iran's fault for not capitulating, as we had demanded.

Our bombing of Iran was a tactical success. The lesson of Pearl Harbor and Vietnam hold true. Bombing does not displace a government or dispirit the people being bombed. It energizes them. Iran's leadership regime remains in place, stronger than before. The U.S. is withdrawing from the region.

When Trump first campaigned back in 2015 and 2016 he seemed to have learned that lesson. He was, arguably, the peace candidate, and Hillary Clinton was the hawk.

He forgot the lesson, or got persuaded by Israel hawks that this time is different. It wasn't different.

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Trump describes the American glass jaw.

I have felt squeamish about saying that the U.S. has a "glass jaw."

It felt disloyal and un-American to report a dangerous weakness in my country's ability to defend ourselves. 

Trump revealed it in Paris.

Let me explain: "Glass jaw" is a boxing term for a fighter who is knocked out easily from a punch to the face. It means the fighter has an easily discovered vulnerability.

Iran did not need to invade the U.S. to win a war with us and get us to withdraw from the region with its regime intact, its control over the Strait of Hormuz enhanced, its regional influence increased, it being promised some $300 billion for reconstruction, and the U.S. now putting pressure on Israel to stop its attack of Lebanon. It did not need to capture our Capitol. It just needed to rattle our stock market. Trump isn't particularly sensitive to the costs of war or to inflation. But he cares about the stock market.

Take 59 seconds to watch a bit of this press conference in Evian, France, where he praises the genius of the stock market:

Click here

He told reporters that "every time we said something amazing, like 'we're going to settle,' the stock market went up. And every time we said something negative, like 'guess what, we're not going to be able to settle,' it would go down, very big. . . "

Trump said, “If we didn’t do this deal, we could have dropped more bombs for another three weeks,…four weeks, two years….you would never have the Hormuz Strait open. . . ." 

The stock “market would have, instead of going up….would go down at levels that nobody ever saw before, maybe, except for 1929. I did not want to see economic catastrophe. If you kept this going, that could have happened.”

Trump tells lies with ease, but not everything he says is a lie. He is accurately describing the stock market over the past months. The stock market rose and fell on war news, as did oil prices and therefore oil stocks. 

There is an odd silver lining to this glass jaw, and Trump's frank admission of it. Anti-war voters of both parties can reflect that a transactional president, one who entered a war because he thought it might be easy and enhance his popularity, with the potential bonus of grabbing some cheap oil as a spoil of war, is not psychologically and morally committed to pursuing the war for decades. I don't doubt that Presidents Kennedy, Johnson and Nixon genuinely thought we had some moral obligation to defend democracy, capitalism, freedom, and Western Civilization to stop Soviet and Chinese communism. We had a duty, so the Vietnam war persisted even when it became unpopular.

Trump doesn't appear to have a sense of duty or honor or responsibility to any higher principle. He was in it for the money and the glory. If this is a loser on both counts -- and that is how it is working out -- he stops and leaves Bibi Netanyahu and Israel-hawks in both Israel and the U.S. surprised and disappointed.

The war is a loser, and Trump is cutting his losses. 

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Iran won.

What will we know for sure about what President Trump called "the little excursion in Iran?"

There will be disagreements about the Iran Memo of Understanding and eventual peace settlement.

I expect to be lied to by both sides. 

Here is what I think we know for sure:

--  We didn't get regime change in Iran. The same team is in place, but now with younger people with a fresh sense of national purpose and pride.

--  The bombing of the girls school and the death of 100-plus schoolgirls will not go away. A hundred years from now Iranians will remember that we bombed a school for girls. 

--  As with Obama's Joint Comprehensive Plan of Action, the eventual Trump nuclear deal will leave Iran wanting to get nuclear material. The technology is available. But they have learned that they have something better than a nuclear bomb, which would invite nuclear retaliation: They can hold the world's economy hostage by threatening the Strait of Hormuz.

--  Before the start of the war on February 28, the Strait of Hormuz was an international waterway, with free passage for everyone. Now the Iran and Oman control the strait, and we are negotiating to have it be free of Iranian tolls, while Iran is negotiating to regulate them with administrative and environmental fees. 

--  Before the start of the war the U.S. was the security guarantor for the oil-rich countries of the region. We had a deal with them: They trade in petrodollars and keep oil flowing to the world; we keep safe their glass cities, luxury hotels, hedge fund headquarters, and energy infrastructure. That is over. The war proved we cannot protect them. The protection comes from making cooperation arrangements with Iran. 

--  The U.S. military is huge, but ineffective. The weapon systems of World War II and the Cold War are obsolete. A thousand drones at $10 million are more effective than one aircraft carrier at $5 billion. And you don't need to sink the aircraft carrier. You just have to scare the insurance companies that insure oil tankers.

--  The U.S. burned its allies with insults and trade wars, so it does not lead a coalition of democracies. When it really counts, the U.S. is on its own.

--  The U.S. got led by Israel and is now scrambling to unwind the mess it got itself into. Israel has become a political liability. U.S. hawks on behalf of Israel have been discredited. Even Trump is abandoning them, and no credible American politician will try to replace Trump as a full-throated champion of Israel. 

--  The U.S. has a glass jaw militarily. The way for supposed small powers and middle powers to end wars with the U.S. on favorable terms is to cause political distress for the president. The weak spot for the U.S. is the next election. 

--  President Trump and conservative media will call this a tremendous victory for Trump and the USA.

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Sacrilege is a message.

     “Michelle Obama is a man. Am I right, America?”

          Josh Hokit, at the White House lawn after winning his fight, June 14.

The whole event was a desecration. This was just a little extra.

Desecration has purpose and effect. It is political speech. It is a message: 

There is nothing sacred about the U.S. Not its places, institutions, or norms. We have power and will use it however we want, so, fuck you.

The cage fight took place on the White House lawn. Award ceremonies took place at the Lincoln Memorial. The event was a commercial event with paid ticketing, advertisements, and sponsors. People who accuse Trump of being thoughtless and impulsive are not wrong. But he has superb instincts about political messaging. The event was a political message of Trump marking his territory like a dog urinating on a wall, fresher and higher than the previous dog, or a graffiti-tagger putting something new and bigger on top of another tag. 

The USA has a civic religion. The country was not installed and consecrated by a pope who crowned a country's leader. The Constitution begins with "We the People." We formed it. We made it special. We have substituted civic institutions, places, and symbols for religious ones. Children stand to say the "Pledge of Allegiance." We stand for the National Anthem, and when someone kneels for it, even respectfully, a great many people object. We debate from time to time whether to limit the First Amendment's free speech clause to say that burning the U.S. flag is not permitted speech. 

I have been to the Lincoln Memorial. It feels like a temple. Imposing. Silent. Words engraved on the wall stating our purpose as a country.

Josh Hokit was celebrating his victory. With what, exactly, with his comment about Michelle Obama? He was celebrating the power of transgression. He could be racist and misogynist and offensive. He could be obscene, in the Greek drama sense. He could put before the people that which should be off-screen, i.e. obscene. 

I wrote yesterday of my great disappointment with Republicans, people who had happily voted for Ronald Reagan, who said he never took off his suit jacket in the Oval Office out of respect for it, and John McCain, whose sense of military honor kept him tortured in a North Vietnamese prison for extra years rather than be released out of order of men held longer.  Republicans voters have understood honor and personal character in the past.

Barack Obama's election seemed to have changed something in Republicans. Trump's accusation that Obama was illegitimate from the beginning found political traction within Republican voters. Obama's education and credentials were fine; he had been a state senator then a U.S. senator. But he is black -- half black, a half-breed -- and therefore uncomfortably foreign, an outsider. His wife became part of that illegitimacy. She spoke about wholesome food and healthy exercise, a good anodyne concern. They were married, scandal-free, and had two children. But there needed to be illegitimacy somehow. The right-wing trope emerged. Michelle Obama was in fact a man, making her a fraud and Barack Obama gay. The story has persisted for a decade, advocated by Elon Musk's father, by right wing trolls, by social media commenters. It is untrue, physically impossible, but persistent.

The accusation created an idea, or cemented an idea out there in the zeitgeist that the U.S. government is a fraud. That our institutions are a fraud. That playing by the rules is a sucker's game. That polite is for sissies. That norms are to be broken because actions are legitimized by the power to take them.

Donald Trump staged a cage fight award ceremony at the Lincoln Memorial to de-sanctify the Lincoln space and what it represents. Josh Hokit's comment was not out of place. It was part of the process of vandalizing. 

Perhaps, a decade from now, when Trump is gone, Republican voters and officeholders will have swept up the mess and remember themselves as never, ever having been part of the Trump movement. MAGA, they will say, was about making America great, not vandalizing it. They will pretend to forget, and then they won't need to pretend. They will have re-written their memories.

Republicans are like the foolish, stupid young men who celebrated the Knicks victory by, of all things, setting fire to a school bus. They will regret it later, I hope, but they were caught up in the moment of feeling empowered by destroying things.

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