Month: August 2025

Redistricting America

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It is one of those debates that has increased with America’s social division. It all deals with the US House of Representatives and the 435 seats contained within the House. A President is dependent on the house to pass legislation, budgets etc..It was one of the points the founding fathers had in creating a system of checks and balances. Redistricting occurs every 10 years in practice. Usually, the party in power in the House of Representatives redraws the map to its political advantage. For Republicans luck has been in their corner as they have controlled the House at these critical moments. In this day and age, where we can track votes by individual household, you can be very specific and exact in your drawing. As America has become more polarized and politicized this redrawing has become more important and more contentious.

Which brings us to Texas. We know the President is always watching the polls. In fact he is always watching the television. When poll numbers come out that make the November midterms look unfavorable. He knows without control of the House his agenda falls apart. He panics. He loves executive power, frankly just power. He calls Texas Governor Gregg Abbott. He says, let’s redraw Texas now. This way they can secure an additional 5 seats in Congress and secure Republican rule. Plain and simple this is power at work. Governor Abbott appearing very weak, simply rolls over and does the Presidents bidding.

The follow up will be felt in California and New York. California Governor Gavin Newsom has been quick to respond. Partly because he sees that he has to and partly because it affirms his own Presidential aspirations. This could also spill over to New York. The danger seems obvious. A domino effect of states redistricting to favor one party. We could rig a system of Blue only states and Red only states. It would be the beginning of the end to American democracy. Going by current electoral map it would put Blue at 276, so a razor thins margin. For those counting you need 270 to carry house. This however is not a world we would want to live in. It would lead to loss of freedoms. It is also the delicate balance of how much do you want to empower the states versus the federal government.

The ego of power has been a human weakness for centuries. At its roots has been the desire for a man to rule over the lives of others. To determine what there purpose shall be. What their opinions shall fall in line with. To determine their level of happiness. To determine their fate. To embolden the cult of personality. Yet time and time again someone or some group figures out how to manipulate the general population into complacency. Right now in the US it seems as if we are just watching. There are few protests. A lot of social outrage, but this has not led to any action. In America we are complacent. We are very individual. As long as something does not interfere with our daily lives, we take little notice. This is how dictatorship works. It loves silence. Enrage your supporters. Hitler did this to perfection in his run up to absolute power in Germany. Though those supporters may be in the minority, they seemingly capture the day.

This is a moment, frankly there have been many of late, of what do we stand for as a nation? The President takes an oath to the Constitution. Our military swears an oath to the Constitution. In our current environment there seem a strong desire to skirt the Constitution. In order to appear to get things done we bend the rules. In recent times that has been through the executive order. The effort to redistrict is not about democracy but a plain and simple power grab. Yet most of the public remains silent. Silence has consequences, I am not sure when the country will wake up to what is happening in America. If and when it does will it be too late? Redistricting used to be a procedural process but over time has become a political one. If we turn a blind eye, the America we wake up in will be very different. It will not be the one we have known.

Good Night and Good Luck

Hans Henrik Hoffmann August 29th 2025

The Russian Play

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Russia is a country steeped in its own history. Having been part of Europe but never really being adopted into Europe. Perhaps this could be a simple geography question as most of Russia is in Asia. Peter the Great pushed for a more European Russia. If you read Tolstoy’s “War and Peace” you will remember the Russian aristocrats when together spoke French. However, calling Russia part of the European fabric would be a stretch. We had the cold war which led to the creation of NATO. This literally created a wall aka the Iron Curtain. Since the collapse of the Soviet Union, we initially saw closer ties to Europe. Over decades, these relations slowly declined between the two parties. The biggest reason was Russia’s return to its roots: dictatorship.

Vladimir Putin has cemented his status as the central figure in European power plays. For over two decades he has been the only figure that mattered when discussing Russia. Having read several books on Putin it was an unlikely rise to power. A failed KGB representative decries the collapse of the Soviet Union. Through sheer will, he then emerges as an unlikely successor to Boris Yeltsin. At first new and uncertain he has used his KGB training to his benefit. Those in Russia who oppose him are imprisoned or murdered. Funny how so many who have gone against him have jumped from high rise balconies or windows to their deaths. Yet Putin has continued to believe Russia is a great power worthy of global respect. It really has only two things. A large nuclear arsenal and oil. But the age old desire for power and building an empire continues on.

Putin has put this plan into practice. Seizing the Crimea from Ukraine and watching the world do nothing. This only emboldened him. Then on February 24th, 2022 Putin tries to press his luck and invades the Ukraine. What was supposed to take 2 weeks has now run over three years. He has played the long game and roped allies like North Korea to help in his battle. Purchased drones from Iran. The Russian military thought to be one the world should fear has been abysmal. At times behaving more like Huns than a well oiled military machine. Drinking, looting and raping along the way. To Ukraine’s credit they have fought the good fight. They have had to play rough with politics as the US government cannot seem to make up its mind. This extends across Biden and Trump. In war you cannot have constraints and yet the US put a lot on Ukraine.

Now there is talk of peace. Donald Trump thinks he is leading the peace negotiations. But his statements show he is but the puppet. Heading to Alaska it was all about getting a cease fire deal with Russia and Ukraine. Now it’s a peace deal. Russia gets territory they do not even control. Ukraine will also be barred from NATO. This is almost Putin’s dream deal. What he would prefer is a complete surrender and control of Ukraine. He would have access to precious minerals and the black soils of Ukraine. The President looks weak. He seems to change direction on a daily basis. Being a transactional President he lacks core values. He wants a Nobel Peace Prize he just does not want to put in the work.

None of this is surprising coming from Putin. He has pushed his luck time and time again. Knowing that the west will do anything to avoid war with Russia. He took over Crimea. Got some sanctions and a warning. Now he pushed into Ukraine and actually may come away with something. What next? The Baltic States? Though obvious Estonia, Latvia and Lithuania are part of the NATO alliance. Any attack would trigger Article 5. Which raises the question would Trump adhere to it? He has been skeptical in the past of supporting Article 5. Which makes it all the more tempting to Putin to try and push his luck.

There is blame to go around. The NATO Alliance has becomes too dependent on the US for its defense. They were having trouble even getting to 2% of GDP for defense spend. Now some are pushing to go up to 5%. What the rest of NATO has lost is time. They need to build up their defense industrial complex. Building industry takes time. The US is an example. It offshored all its semiconductor industry. Now, it realizes it has created a security threat. Semiconductors, which are in most everything, are manufactured in Taiwan. One thing that concerns be is the destruction of alliances. It is a big world and only the naive choose to go it alone.

In the current round of negotiations it is hard to see a successful end game. Peace will only leave resentment. Zelenskyy faces a difficult political task. His main and most important ally, the US, cannot seem to make up its mind. Trump is likely still angry. Zelenskyy would not help him fabricate dirt on Hunter Biden. This was for Trump’s failed reelection campaign. Grudges bare no fruit. Putin is doing what Putin always does, buys time. In the end if Ukraine cedes territory to Russia, it will be perceived yet again as weak. Weak being the western democracies, which includes the United States. Pursuing peace at any cost comes with a price.

I expect Trump to give Putin a victory. It was apparent in Alaska when the red carpet was rolled out for Putin. It was apparent when after meeting Zelenskyy and NATO allies Trump had to immediately call Putin. The leash is on and Putin is holding it. This will be a pivotal moment for Western Europe. In history they have battled Russia many times. Yet this has been dormant since the end of WWII. Though NATO has been one of histories great alliances the group was overly dependent on one: the United States. Now it will be up to the rest of Europe to rise up and face Russia, perhaps on their own. The United States is no longer the dependable ally it once was. Our own system of leadership changes every four to eight years has a limit. The difference in foreign policy between Democrats and Republicans was manageable for many decades. The changes made by each admin were small. In today’s America that is no longer the case. The changes in attitude are dramatic, perhaps no conflict has surfaced this more than Ukraine.

Sacrificing global leadership was not supposed to be easy. But in a administration focused on America first it is happening quickly. In the Trump world he believes the American economy is the gold standard. Which is why his tariff fantasies may work in the short run. But he does so at the cost of not understanding geopolitics. Alliances do matter. They mattered in WWI. The mattered in WWII. They mattered in the Cold War. Yes they were expensive. It was not a transactional deal. But they pushed the world toward peace. Dictatorship’s do not have a good history. Looking to dictators to solve world problems and building lasting peace will not succeed. Putin knows this. Trump proudly does not read. He will learn the hard way and the world will suffer because of it.

Good Night and Good Luck

Hans Henrik Hoffmann August 19, 2025

The American Dream: Why Homeownership Is Out of Reach

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It seems a common conversation in America is the rising costs of living, in particular housing prices. A large part of the American dream was built around the idea of owning a home. The images were clear, A husband,a wife, 2 kids in a comfortable house. Television show like “Leave it to Beaver” justified this dream. The wife of Nobel Laureate Andrei Sakharov, Yelena Bonner noted this. In her book “Alone Together” where she traveled through parts of America, she said “In America, everyone wants a house”. It was said more as an entitlement. However something has changed in America and it is not for the better. The dream is no longer within reach.

The average age of first time home buyers has risen. In 1991 the average age was 28. In 2024 that has risen to 38. When my wife and I bought our first home (and only home) in 1995 I was 29 and she was 31 (cradle robber). The median cost for a home in America is $426,900. However in many metropolitan areas it is much higher. Seattle $853,000. San Francisco $1.2 million. Salt Lake City $572,000. Los Angeles $967,128. Dallas $440,500. The list goes on and on. Yes there are places that are cheaper like Dallas and Charlotte ($428,000). However you need the right job to save enough money to put a down payment on a house. In recent jobs I have had I have had co-workers under the age of 30. I have heard multiple times the belief that they will never own a home. When prices are increasing at a clip faster than wages it is hard to get ahead. Back to my first house, We paid $159,000. We put around 20k as down payment. Our house is paid off. The house is now essentially capital for our retirement. It may also be a home for one of our three children.

Gentrification is the process where a neighborhood transforms from low-income to higher-income due to an influx of wealthier residents and investment. Seattle, my home town, has seen this occur. The central district was Seattle’s black neighborhood. Over the past couple of decades it has transformed, it has shrunk. As housing prices increased and there was more demand for homes in Seattle, the homes in the Central District increased. I have always viewed this as capitalism’s natural progression. Though the owner would seemingly seem to make out financially well, they now have to find a new home. The question is where? You have to look out and away from the city. When a old neighborhood disappears only memories are left.

Capitalism is pure. I will give it that, but it is not perfect. It was never designed to be. It is a winner take all system. I do not know ratio of winners to losers, but in America we have our 1%. They have financial wealth and with wealth comes power. Everyone in America knows we suffer from disparity. A few at the top living high on the hog. While those at or near the bottom receive capitalism’s offspring: suffering. We are a wealthy nation, but too often turn our heads from a problem. We see the problem but cannot solve it unless we make a profit. Capitalism’s curse has always been the bottom line.

In the book “Nomadland” by Jessica Bruder, Bruder takes us on a journey. She adopts the life of those who live in their car or van. She has her own van called “Van Halen”. RIP Eddie. Living among those displaced from society she travels the country. Living in her van in the hot summers and cold winters. She gets to know those she shares the road with. All with their own background story. All of them, as they like to say, “houseless”. It seems it is a statement on the status of America that there are so many people displaced. Either houseless or homeless. In 2024 it was estimated that there were 771,480 people who experienced homelessness. The highest number since records began. How does this happen in the worlds wealthiest economy?

There is no solution in site for our housing crisis. As a society I believe we lack empathy. Over time we our happy to discuss a problem, we just do not want to pay for it. We have become complacent. But now more in folklore the American dream of home ownership is still remembered. Not fondly but with a passing of time, distantly. Too many Americans are being left behind in a world that is ever increasing in technological know how. America is a tense society. If was David Pilling who said in his book “The Growth Delusion”, it is not about the economy stupid. It is about happiness stupid. Much of the American dream of happiness has been about owning a home. Of building memories in that home. Those dreams have become remote as the cost of housing has made American dreams unachievable. Dream don’t always come true. In fact they may just be out of reach.

Good Night and Good Luck

Hans Henrik Hoffmann August 15, 2025

Genesis

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This could easily be called a book review. The book by the late Dr Henry Kissinger, former Microsoft CTO Craig Mundie, and former Google CEO Eric Schmidt. The book, after all, is titled “Genesis”. And in a way the title is appropriate, Genesis is the biblical tale of the beginnings of man. The lovely story of Adam and Eve. When life was innocent. But in innocence evil finds an easy victim. Eve meets the serpent in the Garden of Eden. She is tempted to bite the fruit from the tree of knowledge of good and evil, and does. There we have it: the original sin. The book however does not contain a new original sin. The definition of Genesis is “the origin or mode of formation of something”. We are now at a new beginning. We are long past the formation of man but at the birth of Artificial Intelligence. We are at the formation of something new and awesome.

What is this something? While the tale of Adam and Eve can be viewed as myth, this story is right in front of us. We have been preparing for this moment since 1958. That was when an engineer at Texas Instruments built the first integrated circuit. Jack Kilby has passed, but the legend remains. This laid the foundation for what would become the Technology Industry. Since that time the pace of technology has been on an accelerated path. It seems like yesterday when I was at Microsoft we were trying to pass our certification for MS-DOS 5.0. That was 1992. In the 30+ years since then the industry has continued to innovate at an accelerated pace. We commercialized the internet. Launched the iPhone. Built the cloud. Now we are on the cusp of a new era of intelligence. The future will come as to when I do not know. As famous Business Intelligence guru Bill Baker said, “The future comes slowly, change happens quickly”.

What the book does ask is about this race to build and control AI. It will end when super intelligence is realized. By then, we will have accomplished a goal of a new order. For centuries now the apex predator on planet earth has been mankind. When super intelligence is realized that will no longer be true. That is a daunting reality. Super Intelligence will be able to look at things and find complex patterns that humans could not discover. In the realm of research there will be no human equal. All the human race can do is sit on the sidelines and watch in awe. At some point between AGI and ASI the jump will be made from the digital realm to the physical realm. What form it will take when this jump is made we do not know. I was thinking the Stay Puff marshmallow man. I ran this joke by Mundie and Schmidt, but it turns out tech execs have limited capacity for humor. Assuming the physical AI will have two arms and two legs seems obvious. However, given we are talking ASI, it may have a better design in mind.

A common question being asked is as we move forward what will be the purpose of humanity? Many execs say new training will be needed for this new economy. I get it. The questions I always have is what kind of training? What education level will be needed? If it is at least a bachelors, that is problematic. According to College Transitions website only 37.7 percent of US citizens have a college degree. Which raises another set if questions. What kind of degree will you need? If you are pursuing a LIberal Arts degree or Math degree are you wasting time? Will ASI in physical realm replace all blue collar jobs? How will the 62.3% make a living? Will we need a Universal Basic Income? There are already examples in China of robots doing drywall work. According to AI there are 116,400 drywallers employed in US. What will their pending new line of work be? Depending on ASI’s intent will it take over Mexican the drug cartels? Random thought on my part. Turns out AI says Mexican drug cartels employs 175,000 people. I guess big question here is will ASI be here for the good of humanity or its detriment?

As we started with a quick review of the tale of Adam and Eve its worthy to note its progression. The new story of innocence will not be nearly the same. The tree of knowledge has grown and multiplied as the passage of time has only increased humanities hunger to learn. The path was set in motion through the age of discovery with Columbus and Magellan. The sciences began to emerge through Newton and Galileo. Aristotle laid the foundations of democracy. Through the ages they continued to share and grow giving us Edison, Tesla, Einstein and Oppenheimer. All along the way pushing humanity forward. Now we come towards its destined conclusion, our replacement. We are at the beginning or origin of a new being. One that will be superior to our own species. It was Eric Schmidt who was once asked “what is Artificial General Intelligence”? His reply, “Self determination”. What will this new intelligence make of its human creators? What will it decide?

Good Night and Good Luck

Hans Henrik Hoffmann August 12, 2025

Trouble with Tariffs

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It seems not a day goes by where we are not inundated with the word “tariffs”. Not that they are new, but that they are being used in new and naive ways. The American public is being fed a plethora of great and terrible news based on the messenger. Is it a revenue generating machine or a tax? Who is paying? To be clear here it is not the exporter. Does it give us leverage in the negotiations? A short versus long term question. Manufacturing will be brought back to America and create jobs. We will never be going back to the fifties, but some will try. Foreign nations with a trade surplus with the United States have been screwing us for decades. Maximizing shareholder wealth would say otherwise. Will inflation come back with a vengeance? It almost certainly will. In the end we are left with uncertainty. Global markets hate uncertainty.

Tariffs are pretty simple, they are a tax on American consumers. The Country levies a 25% tariff which the importer pays upon receipt of the goods. The importer than must decide do I eat the cost of the increase in cost or pass onto to consumers. Since eating the cost eats into profits the latter is usually preferred. Tariffs were one of those things you learned about in business school. A pretty simple device for aiding domestic industry. The steel industry was always a good case study. Unable to compete against foreign competitors from South Korea and Japan. The US government many times has issued tariffs to help make US Steel producers more competitive with foreign competition. But this is a individual industry case. Today we are looking at Tariffs more broadly. Blanket tariffs on entire countries.

One thing that gets underestimated in this disputes is foreign nationalism. In Denmark for example they are learning to not to be dependent on US manufactured or produced goods. They do not need Coca-Cola they have local colas they can turn to. On the labels of goods it is marked if it is made in European Union. The arrogance of the US is the belief that the world cannot live without us. This is always mystifying to me (USAID could be the subject of another post). Can a German citizen live without Nike? Probably very well. The Mexican President, Claudia Sheinbaum Pardo, out lined to her a country a whole list of alternatives to American goods. Buy Mexican…sounds kinda familiar. Countries when challenged or threatened look inward for solutions

China is the big target with tariffs. China has the largest trade surplus with the United States. In 2024 the United States had a goods trade deficit with China of $295.4 billion, according to the United States Trade Representative (USTR) (.gov). This represents a 5.8% increase, or $16.3 billion, compared to the previous year. A massive amount by any stretch of the imagination. China also holds $784.3 Billion in US Treasury Bills. This is down from the peak in November 2014 of $1.3 Trillion. During this Trump tantrum they have not played along. Though it looks like Trump will be visiting China in the near future. The difference with China is that it is the world’s second largest economy. It does have levers it can pull, unlike other nations. Given that we are adversaries I think it odd that China buys US Treasuries thus funding the US war machine. Though the downward direction I expect to continue. This would mean the United States needs someone else to pick up the tab. China also plays the currency markets. China pegged its currency from 1997 to 2005 to the U.S. dollar but since has managed its currency against a basket of currencies. The effect of the peg and the low currency is that Chinese exports are cheaper and, therefore, more attractive compared to those of other nations. China is investing heavily in tech and competing aggressively with the US. Thinking that China would bend the knee to US pressure was never a wise strategy.

The biggest issue facing the world is US leadership. In three years when there is another election the administration will change. Trump says he will try to change the election system. He wants to run again, however, he will be 82 years old. Thus the world can play the long game and wait until they get a more favorable alternative. The US capitalist system is designed for the short run. The two part election system is designed for the short run. As former House Speaker Tip O’Niel said, all politics is local. Most voters want to know, “What have you done for me lately”? Countries like China are thousands of years old. A decade is but a blip in time. WIll tariffs generate success for the US? I am skeptical as it has created an environment where the US is viewed as not trustworthy. The costs will be passed to US consumers, effectively a tax. Higher costs equals inflation and no Presidential candidate survives inflation. Just ask Joe Biden. In my view when it comes to Tariff’s 101 the current admin has a failing grade. They are treating the public as if they are dumb. We can read and the logic of tariffs is not that difficult. We have come across as a uncivil society. When you are the largest economy on the planet it is hard to argue you are being screwed. Threatening trading partners will have long term consequences. I am not too concerned about the US economy in the next 1-2 years but in the next 4 to 5 years….yes I am.

Good Night and Good Luck

Hans Henrik Hoffmann

August 6, 2025