“Journalism is dead in America…”
---Sean Hannity 2009
Journalism may not be completely dead yet. However, the industry in aggregate seems to be dying. Newspapers are in steep decline; and the cornerstones of the craft (magazines & periodicals) are locked in a death spiral. Similarly, local television news programs have experienced dramatic declines in viewership for more than a decade; and revenues for radio stations with all-news formats have flatlined.
The explosion of social media in recent years has undoubtedly disrupted the news and publishing industries. These days, online news sources are a staple for a vast majority of adults in the United States. In fact, 43% of U.S. adults turned to social media, news websites and news apps for political news this past election cycle. In parallel, online media subscriptions grew at an astonishing 300% rate last year.
So why are so many industry bellwethers floundering in an era where content is supposedly “King”? The sad truth is that publishers in aggregate have largely abandoned their tradecraft. Most bought in to the assertion that “the broad opportunities…involve supplying information or entertainment“ while largely neglecting the other two pillars of their art: educating & enlightening their audiences. Additionally, many unwittingly bought into the assertion that their audiences “must be rewarded with deep and extremely up-to-date information that they can explore at will.” Quantity over quality seems to be the manta; and publishers are paying a hefty price for their shoddy craftsmanship.
Make no mistake, the digital publishing realm is a world within itself. Cyberspace happens to be real estate; and publishers failed to fortify their kingdoms when they colonized their online territories. Metaphorically speaking, they entrusted pirates to patrol their waters at the outset. Gradually, the pirates established strongholds within the publishing castles and extorted their naivety. Today, these pirates hold the publishing world hostage; charging those they deem fit a king’s ransom to publicize and distribute their wares to the public at large.
By pirates, we are referring to search engines, social media companies and content aggregators (specifically: the likes of Facebook, Twitter, Google and YouTube). Perniciously, they have a stranglehold on the distribution and circulation of Web content. In parallel, these same companies also control a lion’s share of the advertising market within the online publishing world. Like robber barons of the 19th Century, the tech giants have created monopolistic empires of their own, decimating the publishing industry and leaving behind a wake of public discord in the process.
We will examine the genesis of the present situation in this article. We will also explain why the status quo has become a threat to democracies around the world as well as our own Constitutional Republic here at home. Lastly, we will offer our thoughts on how to best balance the playing field and hopefully restore public trust in our media institutions.
Just the Facts, Ma’am
A free fall within the publishing industry has been evident for years. In 2013, U.S. newspaper circulation fell below the lowest level in recorded history as digital consumption became more mainstream. According to PEW Research, the shrinkage has continued at an astounding rate since then. In 2018 for example, the combined circulation for print & digital daily newspapers in the U.S. fell 8% for weekdays and 9% for Sundays. Sadly, the future looks even bleaker for publishers if present trends continue.
Revenue for magazine and periodical publishers was expected to decline 13.8% in 2020 according to IBISWorld. As revenues from print advertising dry up, digital revenue streams simply are not accounting for the difference. This isn’t surprising given that the bulk of revenues generated through digital advertising (52%) now go to Facebook and Google rather than to the publishers themselves.
Picture cyberspace as a solar system and the World Wide Web as a planet within that system. Now imagine you were a publishing mogul looking to set up shop on that planet. You probably would not dump your wares onto the surface of that planet without understanding and testing the terrain first. Yet, this is essentially what a vast majority of publishers and news outlets did when they launched their online publishing ventures.
The surface of the Web itself happens to be fluid and transparent. Adroit travelers within cyberspace are able to see everything on the surface web at quick glance; meaning that it’s ripe for piracy and theft. Much like the surface of the Earth; most of the solid ground on the Web lies well below the planetary surface.
In aggregate, the Web’s subterranean layers are known the deep web which is often ignorantly conflated with the dark web - the Web’s murky undersurface that is permeated with illegal content. That said, the deep Web is where the bedrock lies. In fact, around 90% of the world’s websites exist within the deep web rather than the surface web. Sites within the deep web are not indexed by the search engines and oftentimes aren’t made visible to the public in general. Additionally, websites within the deep web are frequently encrypted to ward off pirating operations as well as hackers.
When publishers first launched into cyberspace and claimed their domains on the Web, hackers were a clear predatory threat. Consequently, protocols were quickly established within the surface web to deter hackers. Savvy tech pirates on the other hand, were lying in wait. Many of them appeared innocuous on the surface. They had a native understanding of the Web’s subterrain and were often collegial toward publishers. However, business ventures are a combination of war and sport and pirate captains soon prepared their vessels to perform stealth forms of grand larceny within the publishing world.
Houston, We Have a Problem
The original champions of the World Wide Web were long on dreams and big on aspirations. In a 1994 speech to the International Telecommunications Union, then Vice-President Al Gore remarked:
WHere, Mr. Gates fully recognized the viability of the emerging markets as well as their enormous potential for scale. He also implied that social upheaval of some sort would be inevitable as macroeconomic principles played out over time. In those days, cyberspace was much like the North American continent during the 17th century. In effect, the World Wide Web would be an ethereal fountain for new raw materials with computer code comprising the basic elements.
Navigational maps would be required to conquer the terrain. They would be required to link people and institutions together; and to effectively promote trade. Also, library systems would have to be built to warehouse the perpetually renewing supply of maps. Inevitably, something along the lines of the Great Library of Alexandria would need to be built for the public at large to catch on and colonize the Web.
Intuitively, one would think that visionaries and architects devising the National Information Infrastructure would have realized this at the outset and built one into their rollout plan. Yet, it was left entirely up to the private sector to develop, build, and maintain them instead. Consequently, rudimentary libraries sprouted up throughout the 1990s. They are of course known as search engines today.
The first of these search engines was named Archie. Archie made its debut in 1990. That said, it was more of a simple card catalog than an exploratory tool for Web. Archie was followed by W3Catalog and JumpStation in 1993. Jumpstation was the first search engine to combine crawling, indexing and searching all into one package; features which are now industry standards. This innovation was followed in 1994 by Webcrawler; the first tool that enabled visitors to search for any word on any webpage, which is also of course an industry standard today.
During the latter part of the decade, competition within this category heated up as Web usage became more mainstream. Several search engines debuted during this period vying for popularity. Among the better known: Magellan, Excite, Infoseek, Inktomi, Northern Light, and AltaVista.
Then in 2000, Google gained traction. The brainchild of entrepreneurs Sergey Brin and Larry Page quickly rose to the forefront of the market largely due to their sophisticated PageRank system as well as their novel paid-search capabilities. Both were game-changing features as far as e-commerce was concerned, especially for publishers, entertainment companies and media outlets. For that matter, an argument can be made for the whole of Western civilization as well.
The Booty Call
Mr. Brin & Mr. Page met as undergrads at Stanford University. Mathematical geniuses armed with computer science backgrounds; they set out to change our world by organizing and cataloging the World Wide Web in an effective and easy to reach manner. A sophisticated mathematical gear system was at the heart of their solution, better known today as algorithms. The machinery they developed was groundbreaking to say the least.
From the outset, Google’s product had an intuitive end-user interface and an engaging demeanor. It was also fast and efficient. Beyond that, Brin & Page’s search engine was generations ahead of their competition mechanically. Both factors were enormous competitive advantages and they quickly leaped to the top of the market. The company has remained there ever since; driving the most of their competitors into the graveyard.
Being one of the greatest free-market success stories of all-time, stories about the Google’s origin, founding and history are widely known. Most point to their earnest desire to change the world for the better during the company's nascency. Journalist Steven Levy provides such an example in his book: In the Plex, recounting the origin of the Google’s infamous slogan ‘Don’t Be Evil’:
WAnd while Google’s founders insist that they were not moved by money, they were entrepreneurs at heart and ingrained their passion for success within the corporate culture. Regardless of their profit motives, competing to win has always been a strategic imperative for the company. As Mr. Brin once remarked: “We want Google to be the third half of your brain.”
The company understood from the outset that the World Wide Web happens to be a world of real estate. A world comprised of the elements visible to the naked eye and measured by occupancy. Over time, the search industry’s 800-pound gorilla has effectively built locks on both.
Google’s domain is arguably the most valuable piece of cyber real estate ever created as far as occupancy is concerned. More people visit Google every single day than other site on the Web. They also spend a great deal of time there. An average of 16 minutes per day; taking in over 17 page views during their stays.
Early in the game, publishers and the media seemingly thought allowing Search Engines like Google to freely crawl, catalog, and index everything they created was a wise and business savvy idea. Time has proven them wrong. At least for the ones that consistently fail to appear above the fold on Google’s first page of search results that is. Google has controlled over 86% of the global Search market for well over a decade. On top of that, they presently have a stranglehold on the industry’s advertising market – estimated at over 80% for 2019. In short, the conglomerate has effectively monopolized both industries.
Make no mistake, free press in America is no longer free. In effect, the media and the press have acquiesced to a sophisticated band of pirates who pilfer their profits and arbitrarily doll out their creative assets to the public. Online publicity has essentially become a pay-for-play racket over the years. Arguably, designed along the same lines as the Payola schemes that have scandalized the music industry off and on again since the 1950s. Like a mafioso godfather, Google demands tribute. And the publishing world willingly lines up to kiss their ring day in and day out.
Mr. Brin & Mr. Page no doubt had a sense of humor about them when they christened their pirate vessel. They originally dubbed Google’s new technology BackRub – a tongue-in-cheek phrase used within underworld establishments that are known to supply Happy Endings to their clientele. God knows if they had this in mind when they set out to conquer the Internet. That said, the monopoly they spawned within their dorm rooms has since grown to become the most powerful member of an oligarchical information technology syndicate. A syndicate that has grown so powerful that it now threatens the very fabric of free society.
What We’ve Got Here Is Failure to Communicate
It is little wonder that Western civilization began to fragment almost in parallel with Mr. Gore’s 1994 speech. Competition within the news and entertainment industries went into hyperdrive with the advent of the Web. With the internet, fringe publications were no longer hidden behind the counter of a local newsstand. Instead, they were right out in the open for all the world to see. Everything from hardcore pornography and violent videotaped crimes; to exploitative human tragedy exposes and even the narcissistic rantings of deranged sycophants. The public gobbled this garbage up like kids in a candy store and they continue to do so today
In other words, Big Tech assumed the role of moral arbiters on behalf of the Democrat Party and their organized affiliates. If you happen to be a student of early 20th century history, this should send shivers up your spine. This is exactly what fascist and communist regimes of that period did with big industry. They seized control of mass communications deemed, distorted and twisted the truth, and stymied dissent in order to extinguish any and all opposition to their will. The atrocities committed by autocrats in within both systems speak to the consequences.
We are seeing more of the same today out of big tech. Like greedy European industrial profiteers the did with the Nazi and Soviet regimes, Silicon Valley's pirate captains are presently settling into an unholy alliance with China’s fascist regime. America's tech giants deliberately tilted their algorithms toward one side of the political equation in advance of the 2020 elections in order to to serve their overseas corporate interests; Our nation is now sliding toward tyranny. Our Bill of Rights and the free market be damned for all eternity if this trend continues.
All that Glitters Isn’t Gold
Vice President Gore delivered a second speech on the UCLA campus in 1994 where he remarked that: “the future of language is in our hands. Or put more broadly, the future of communications.” He went on to share a parable by author Toni Morrison:
Ironically, mass communications have not been nurtured. The buckshot approach taken by the Clinton Administration to catalog and index the Internet backfired on the public. Foolishly, politicians allowed carnivores into Publisher’s hen houses. Obliviously or corruptly, they have taken handouts from Big Tech fat cats and overlooked the best interests of their constituency. Our inalienable rights are now being crushed or smothered by capitalist wolves in the hands of greedy communist pigs largely in consequence.
The time has come to break up the Big Tech’s four horsemen for the good of the nation and all of humanity. Congress must recognize Amazon, Facebook, Google & Twitter's key commodity happens to be information capital. Everything you do or say online can be monetized; meaning that an individual's right to privacy effectively no longer exists. Worse still, beyond the inherent threat to our personal liberties and guaranteed freedoms; there is perhaps an even greater threat to our national security interests if the Big Tech oligarchs continue to remain unchecked.
With the exception of Amazon, Big Tech’s other three horsemen effectively serve as public utilities in the digital age. Collectively, the top brass within these companies effectively dictate and control the flow of information from town to town and city to city across the country. Facebook being akin to Bell Telephone and National Public Radio; and Twitter being world's “town square” so to speak. Similarly as we've mentioned, Google effectively serves as a global public library; and an argument could be made that their conglomerate also serves as a sort of mass transit system within the cyber world as far as business and commerce are concerned.
Beyond the breakup, re-formulating America's communications infrastructure will require an innovative approach. Re-tooling our National Library system seems a natural place to start. The information superhighway requires a Grand Central Station; and the National Library has that potential if properly scaled.
Author: Erik Gagnon - Managing Partner, Chi Rho Consulting
Thoughts On The Kavanaugh Hearings, Due Process, The Court Of Public Opinion, and What It All Means For America
"Those who do not remember the past are condemned to repeat it."
---George Santayana (American Philosopher 1906)
So far, 2018 has been a very busy and productive year for our consulting firm. So much so, that we decided to put our blog articles on hiatus while we focused our attention on our clientele's priorities. We’ve also gone dark on our social media pages for much the same reason.
However, this past Saturday a client of ours posted a statement on his personal Facebook page which I happened to catch. His statement related to the allegations of sexual assault made against Supreme Court Justice Brett during his confirmation hearings. Frankly, the sentiments our client chose to share disturbed me greatly. So much so, that I felt they warranted a response.
Sadly, much of social media has become a thought ghetto in recent years. Rational debates and logical discussions have largely been silenced and replaced with emotional outbursts by angry mobs. Their comments are largely rooted in animus and in fear; and are oftentimes agenda driven. Consequently, I decided to write a personal letter to him expressing my concerns instead of posting my thoughts to his feed or sending him an instant message.
As I said, our client’s statements on this matter were deeply disconcerting on many levels. The responses he received troubled me even more. As a result, I've chosen to share my response letter publicly. His original comment is included near the opening of my very lengthy response which follows below:
OUR LETTER IN RESPONSE TO THE KAVANAUGH CONFIRMATION HEARINGS AND THE QUESTION OF DUE PROCESS
THE INEVITABLY DIRE CONSEQUENCES IF WE DEMOCRATICALLY FORGO OUR CONSTITUTIONAL RIGHTS
I have yet to receive a response to my letter from our client. That said, I am hopeful that he will take the time to reflect on my arguments, recognize the extreme nature of his original statement and recant his position. That said, we are witnessing a rapid spread of absolutist rhetoric within our society today. It is a very real danger to anyone who disagrees with agenda-driven propaganda based on subjective truths and partial facts. That's why I felt compelled to come forward and speak out on this matter.
Radical leftist ideologues repeatedly ignore objective truths in order to push forward agendas premised on "equality of outcome". They fail to grasp the fundamentals of Natural Law. Additionally, they willfully or blissfully ignore the repeated failures of Marxist and Socialist ideology all throughout history. The fact of the matter is that "equality of outcome" is an impossible Utopian ideal. Humans are inherently flawed; and there are individuals among us who crave absolute and unlimited power over others. There always have been and always will be such individuals. All throughout history, they have risen within socialist regimes to impose authoritarian or totalitarian forms of rule.
Based on the circus we have witnessed on Capitol Hill in recent days, my hope is that more and more Americans are waking up to the fact that leftist rhetoric is becoming increasingly radical in our society. It's no wonder this is occurring when you take into account that authoritarian extremists permeate our educational institutions and our media outlets. In fact, journalistic standards have been all but been abandoned by a majority of prominent American media outlets that lean left of center.
To loosely paraphrase the Santayana quote I cited above: we will one day find ourselves in shackles if we forget the aggregate lessons world history teaches. Make no mistake, sowing distrust in our judicial system and chipping away at our Constitutional protections are but a means to an end. Evil in fact exists. There are individuals walking the planet today who would like nothing more than than to see an erosion of America's founding principles and the complete destruction of our Constitutional Republic. Doing so would open the gates for tyranny, injustice and oppression around the world.
the shadows of ignorance if more Americans who believe in MLK's Dream don't soon wake up to the fact that we are forgetting a fundamental chapter of world history. Indeed, we are starting to repeat mistakes that led to the the death of countless millions during the political upheavals of the 20th century. May God help us all.
For anyone interested:
Author: Erik Gagnon - Managing Partner, Chi Rho Consulting
"It is business that generates the jobs, income and taxes that keep a country going."
---Mark Skousen (American economist)
If you keep up with current events, I'm sure you're aware that the Republican-controlled Congress passed a sweeping tax reform bill last week. We’re not going to address the full minutia of the 2017 Tax Cuts and Jobs Act in this article. However, here are a few of the salient highlights for American businesses:
The substantial cut in U.S. corporate tax rates is undoubtedly the single greatest change in our federal tax laws in the last 30 years. It also seems to be the most controversial portion of the new legislation. Indeed, left-wing politicians and left-leaning media outlets have been quick to condemn the new Tax Act as a gift to the wealthy at the expense of the middle-class.
Before and after the House and Senate votes were taken last week, the pollical hyperbole was in full effect. According to Senate minority leader Chuck Schumer (D, NY), the tax bill seemed to “stuff even more money into the pockets of the wealthy and the biggest corporations while raising taxes on millions in the middle class.” House Minority leader Nancy Pelosi (D, CA) went even further stating, “This GOP tax scam is simply theft, monumental, brazen theft from the American middle class and from every person who aspires to reach it. The GOP tax scam is not a vote for an investment in growth or jobs.”
It’s interesting to note that the final votes in both the House and Senate fell squarely along partisan lines. While a handful of Republicans opposed the bill in the House, not one single Democrat representative voted in favor of the legislation. The same was true in the Senate where all but one Republican (Bob Corker (R, TN)) voted yea and the entire Democrat Senate voted nay.
The apocalyptic reactions to the bill's passing from Democrat leadership and the left-wing media are deeply disturbing, particularly when you take into account that most nonpartisan economic think tanks project sizable economic gains under the new tax plan. For example, the Tax Foundation (a non-partisan Washington D.C.-based think tank) conservatively estimated in their preliminary analysis that the new Tax Act will generate:
Keep in mind that the Tax Foundation used very conservative assumptions for their forecast model and did not take into account any real compounding effects. In contrast, several other noted economists are predicting far, far greater returns over the long run. For example, Forbes contributor Bill Conerly recently remarked, “The biggest impact will be the gradual improvement in economic growth year after year. A small increment added to our recent growth rates would be inconsequential in any one year, but the increments will cumulate and even compound. Twenty years from now, the difference will be significant.” In other words, it's very feasible that the new Tax Act will create economic boon conditions and actually increase tax revenues over the long run.
While the true long-term economic impact of the new tax legislation remains open for debate, a sizable number of high-profile American corporations are already beginning to return immediate dividends to their workers. Several companies (including Boeing Comcast, Fifth Third Bankcorp and Wells Fargo) announced new investments, minimum wage hikes and employee bonuses the day after the tax reform bill was passed by Congress. More major companies are expected to quickly follow suit, thereby negating much of the original hyperbole surrounding the bill.
advantage of many of the loopholes and special deductions that major corporations could. Additionally, the draconian 35% corporate tax structure discouraged venture capitalists from taking sizable risks on startups in the U.S. market for years.
Smaller businesses are the backbone of the American economy. In 2017, over 60% of American private sector jobs are with companies with less than 1000 workers. For a good number of these companies, the new Tax Act dramatically changes their scalability dynamics. Although not every small to medium size business owner wants to grow the size of their enterprise, a good number in fact do. It doesn’t take a rocket scientist to realize that the newly enacted tax legislation frees up financial capital for growth, research and expansion that was previously earmarked for the coffers of the federal government.
In parallel, it’s very likely that Venture Capitalists will begin to invest more and more in startup opportunities in relatively dormant American industries. Again, we're not going to get into Tax Act's minutia in this article (i.e. tax implications for VC investments). However, a basic understanding of economics leads to a realization that a sizable reduction in corporate tax rates makes American investments more attractive to VCs. Therefore, the likely influx of investment capital will undoubtedly lead to greater innovation. These investments will also increase demand for skilled American labor in a number of industrial sectors as competition increases. Consequently, real sustainable wage growth for American workers appears within reach for the first time in nearly two decades.
We'd be remiss if we didn't mention that an estimated 40-45% of all Americans pay no federal income taxes whatsoever today. There are many factors behind this astounding figure. However, an economic stimulus package of this magnitude will most certainly reduce welfare and unemployment figures in the years to come. In addition, the average American worker who pays taxes is expected to realize a sizable tax reduction under the new plan.
More important to our nation's future, American industry will once again have competitive advantages in the global arena. The truth of the matter is that our nation benefits wholly when job creators have more capital available to create, execute and innovate. Unleash the financial handcuffs from the John Galts of American enterprise and the free market will flourish. The positive effects will certainly ripple though society much as Mr. Conerly stated in his recent Forbes column.
In closing, a sad truth was revealed in the final Tax Cuts and Jobs Act debates and voting tallies last week. The leadership of the Democrat Party, as a whole, has now moved as far to the left on the political spectrum as the self-proclaimed “Democratic Socialist” Bernie Sanders (I, VT). They seem to have completely abandoned the virtuous, free market principles that have guided our Constitutional Republic for the last 241 years. Their "progressive" label appears to be a thinly veiled euphemism for neo-Marxist ideology. If John F. Kennedy were alive today, I imagine that he'd be aghast at what's become of his Democrat party.
Author: Erik Gagnon - Managing Partner, Chi Rho Consulting
"Those who cannot remember the past are condemned to repeat it."
---George Santayana (1906)
Earlier today, President Trump held a press conference in New York City announcing his new infrastructure plan. One of the key tenants of the plan is an emphasis on leveraging private sector capital and expertise to rebuild our nation's crumbling buildings, roads, transportation and waste disposal systems. In his prepared remarks, President Trump asserted that the trillion dollar public / private spending plan will efficiently stimulate the economy - leading to at least one million news jobs, wage growth, and new business opportunities in a number of key industries.
When the President concluded his short speech, he opened the floor for questions from the press. Immediately, the line of questions turned to the violent events that occurred in Charlottesville, VA over the weekend. We watched the live press conference and only counted one legitimate question related to the President's infrastructure proposal. The rest of the questions the President fielded from the press pertained to race relations and placing culpability on the individuals and groups behind the violent incidents in Charlottesville. Needless to say, we were disappointed that the questions strayed away from economics.
Why the New Infrastructure Plan Isn't Today's Top Story
The fact that most of the mainstream news media outlets aren't focusing their spotlights on the new administration's policy initiative roll-out isn't at all surprising. Let's face it, they're in the ratings game. Sensationalism and emotionalism outdraw straight reporting. Couple that with the fact that more and more people are turning to online sources for their news (9 out 10 people according to Pew Research), and you begin to understand why partisan story lines are now superseding objective journalism en masse. News consumption is at an all-time high, attention spans are low and competition within the market has exploded exponentially.
Partisanship isn't a new phenomenon in American journalism. As James L. Baughman noted in a 2011 article, partisan reporting was a standard operating practice for newspapers in the years preceding the Civil War. He sites, "Editors... unabashedly shaped the news and their editorial comment to partisan purposes. They sought to convert the doubters, recover the wavering, and hold the committed."
So what has the renewed trend toward hyper-partisanship meant for entrepreneurs in recent years? While the financial viability of new news media startups remains in question, the shift has presented a number of opportunities for quick buck artists to reach niche markets online through targeted digital advertising. That said, news media hyper-partisanship should ring alarm bells for any entrepreneur with a long term vision in most any industry category. Free market venture capitalists should be concerned as well. Here's why:
News Media Partisanship Feeds Social Unrest
As we mentioned earlier, President Trump spent a good deal of his time during today's Q&A session fielding questions about the extremists behind the violence in Charlottesville. He defended his original statements that fringe elements on "both sides" [sic] shared blame for the inflaming the incident. The media picked this up and ran with it.
We have an AP news feed in our office. The very first AP news report we received relating to the infrastructure announcement made little mention of the plan. The headline spoke only to the President's comments on the weekend's events in Charlottesville. The article was, in our opinion, a pseudo op-ed designed to further fuel a specific partisan political narrative.
Let's be clear here. The President didn't handle the onslaught of questions very well. That said, his defense was truthful. Multiple fringe groups were indeed in attendance at the rally in Charlottesville this past weekend. They included several white supremacist groups such as the KKK, Nationalist Front, and Rebel Yell. They also included a loose collective of leftists he termed the "Alt-Left" [sic]: presumably referring to Antifa members, Black Lives Matter, and others that stood in opposition of the rally organizers and participated in the violence.
If you're relatively familiar with 20th century European history, the scene that played out in the streets of Charlottesville were eerily reminiscent of events in Germany in the early 1930s. Take a look at raw film footage captured by independent journalists covering the event during the melees. You'll see armed, similarly clad combatants engaging in a battle over ideologies. There were indeed two fringe camps fueling violence at the rally on Saturday. However, we'd argue that they both represent the same side of the political spectrum: the far far left. Let us explain:
The Risk of History Repeating Itself
Fringe groups with disparate agendas but common core principles did indeed engage in battle on the streets of Chalottesville this past Saturday. Like most Americans, he fell into a trap and placed the fringe into two separate political camps labeled "left" and "right." By failing to point their similarities, we believe that President Trump missed a clear opportunity to rally consensus support for his message and unify the the nation.
If you visit the websites of the radical fringe groups that encouraged member participation at Saturday's rally, you'll find remarkable commonalities in their platforms. Better yet, follow their blogs and read their social media postings ("left" and "right") and you'll realize a similarity in their end objectives. They're both interested in dismantling many (if not all) of our founding principles including freedom of religion, speech, press, assembly, and markets — as well as limited government.
While we hear much ado about the neo-fascist "Alt Right", the media has given little or no scrutiny to the platforms of the egalitarian collective President Trump labeled the "Alt Left." The mainstream media has largely been sympathetic to the BLM and Occupy movements despite their overt hostility to core American principles. More disturbing perhaps, a handful of news outlets (including the Yahoo News and the Washington Post) have even run articles glorifying the anarchist activity of the the Antifa collective.
What we're witnessing today seems to be a nascent rise of Communist / Fascist ideology right here on American soil. Historians and political scientists like Vladimir Tismaneanu are quick to point out that the ideologies often go hand in hand and feed off one another. The cancerous ideologies spread across European continent during the early 20th century, most notably in the Soviet Union and Nazi Germany "where the final destination was the deplorable Gulags and the gas chambers of Auschwitz."
Communism and Fascism share some remarkable similarities:
The core difference between the two ideologies is their organizational structures. Fascism is a class-based system while Communism is egalitarian. What that means is that you get a Fascist dictatorship or a Communist oligarchy - both are oppressive / conformist forms of rule.
What This All Means For Entrepreneurs and VCs
We are definitely encouraged by the five tenants of the Trump Administration's infrastructure plan and their potential macroeconomic benefits. For entrepreneurs and free market venture capitalists there appears to be a lot of upside if this plan, or a similar plan with bi-partisan support, is passed through Congress.
As the president left the Press conference, he was asked by a reporter what it will take to begin to heal our nation's deep cultural divide? Mr. Trump offered a short response that emphasized two things lacking in this day and age: "jobs" and "wage growth." Given recent studies showing that being healthy and having a good job are two of the most important ingredients associated with subjective well-being, he may be on to something.
The U.S. hasn't seen real wage growth since the late 1990's and our true unemployment rate remains a question. More significantly, the Millennial unemployment rate is more than double the national average. Opportunities to find gainful employment and begin to live the American Dream, would no doubt quell sympathy for the far far left agitators and the lose collective of anarchists who fuel them on.
Conversely, a stalled plan poses serious concerns. A stagnant economy will only fuel more social unrest and further polarize our nation. There are reports out that more rallies similar to the one in Charlottesville are being planned across the country in the upcoming months. You can be certain that leaders of both factions of the far far left (communist and fascist) see them as marketing opportunities and are actively engaging in on-line recruitment campaigns to attract new members (and sympathizers) to their causes.
That said, there are glimmers of hope that responsible community organizers from the left and the right are starting to come together. Case in point, leaders on both sides of the Civil War statue debate held a joint press conference in Charleston S.C. today condemning violence and announcing their commitment to engage in objective discussion to reach a compromise. Although the platforms of the two group's spokespersons are well outside the mainstream, it does demonstrate that Americans with opposing views, who share our basic common values and principles, can reach agreement when they rise above identity politics.
We won't speculate on how future events will unfold. We'll leave that to the talking heads in our polarized free press. That said, every American who values our basic founding principles ought to take stock of our mainstream news outlets and begin to hold them to account. Journalistic standards are dying before our very eyes.
It's important to realize we're not dealing with "Fake News" in a true sense. Rather, we're flooded with agenda-driven partisan propaganda (left and right) that threatens the very fabric of our Constitutional Republic. Obviously, free market capitalists around the globe have reasons to be concerned.
Author: Erik Gagnon - Managing Partner, Chi Rho Consulting