Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Site Migration

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On December 5, 2025

In Administrative

As part of fixing the site I’m migrating to a new service provider. A snapshot has been taken of the site from earlier today. That means this post will probably disappear tomorrow, and I will not be approving any comments till the site migration completes, except perhaps on this post, if I did, they’d likely disappear too. (They may disappear anyway, if so, my apologies.)

This move should fix the issues with the site being unreachable or slow to reach, so the pain will be worth it. After the site move, dns propagation occurs and that may cause issues reaching the site for up to three days.

It will take some time after that, unclear how much, before the issues with email subscriptions are resolved.

Sorry for all this, but lesser solutions were not going to work.

Too Big To Fail Fails In China

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On December 5, 2025

In China, Financial Crisis

Roughly speaking there are two types of corporations in China. State owned (SOE) and private. During the policy driven real-estate bust, the countries biggest builder, Evergrande, went under.

But there was an assumption that the government would bail out real-estate SOEs.

Well the largest one, Vanke, is going under, and the central government is going to let it. Moreover, Shenzen’s (China’s Silicon Valley, but on steroids) has repeatedly bailed it out and that means that not only is the central government not bailing out a SOE, they’re letting a municipal government (arguably the most important in the country) take a huge hit. That will send a message to all other municipal and provincial governments.

The biggest mistake of the US financial collapse was the bailout of participants. Every firm which had financialized should have been allowed to go under. The few that were truly necessary should have been put back on their feet AFTER the shareholders and bondholders took their hits, and after being broken up. Collateral damage (those companies not responsible, but simply getting hit by the backwash, such as GM, could receive bailouts in exchange for a government stake.)

Capitalism has issues even when run properly, but it is a simple proposition at heart: people who allocate resources well should be rewarded with more resources to manage, and those who allocate resources badly should lose their ability to allocate resources. Every participant in over-financialization had made bad allocations of resources. For the American economy to operate, they needed to no longer be participants.

Take over the banks and brokerages, and either shut them down, or break them up. That included the bond rating agencies like Moodys.

The failure to do this meant that decision makers know (or believe) they can make risky bets that cause systemic economic issues, bets that damage the economy as a whole and expect to be bailed out rather than be required to take their lumps. (And, ideally, be investigated for fraud, which most of them were guilty of.)

An economy where economic decision makers are incentivized to take big risks which hold the entire economy hostage (because they might not be bailed out if the risk isn’t systemic) cannot work and doesn’t. The US economy requires a backstop that amounts to the full expectation that the Fed will print trillions on demand to bail out bad actors. (The current main bad actors are the AI cartel.)

China is, oddly, the only major economy in the world that runs markets more or less right. (Though they let their own real estate casino run for too long.)

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The Four Steps Guide To Learning

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On December 4, 2025

In How to think

Sometimes it seems like half my life was spent learning something new. The more I’ve learned, the more I’ve thought about how to learn, and I’m going to distill part of the process down for you. These methods are primarily about intellectual matters: mastering a subject, but are easily adapted to practical and creative skills.

The four steps are:

1) Study/Read.

2) Think about.

3) Discuss (something is to be learned from your superiors/equals and inferiors.)

4) Do (write in intellectual disciplines). You must try out what you learn to own it.

The first step is reading or going to lectures or watching someone else do the task you want to learn. In intellectual matters I suggest finding the shortest book on the subject to start. If it’s well written it will give you a map of the subject. That map may be wrong or oversimplified, but it is a start.

Once you’ve got that map, spend some time thinking about it. This means two things: get it to the point where you can run thru the entire map or model in your head, or speaking out loud. Then spend time examining the map: are there places where it seems incomplete or potentially wrong?

In the discussion stage find someone to discuss what you’ve learned with. They need to be interested and engaged, but the level of knowledge is less important. If they’re ignorant, you wind up teaching them, and that shows what you don’t know. If they know about as much as you, you can easily bounce off each other. And if they know much more than you, they can point out issues and suggest further reading and interesting questions you should ask.

If you have no one available to talk to, have an imaginary conversation. Daydream it. You can use someone you know (I often imagine past teachers) or you can imagine someone well known you’ve never met. What would Socrates or Plato or Kant say about this philosophical issue? What would Napoleon or Sun Tzu say about these military issues? What would the Buddha or Jesus say about this religious issue? What would Adam Smith, Marx or Keynes say about an economic issue? What would FDR, Thatcher, Stalin, Pericles or Deng do about this political/economic issue?

The discussion stage can be viewed as an extension of the thinking stage, except you’re getting someone else’s thinking: a different viewpoint than your own. You can talk to multiple people, or seek multiple imaginary perspectives from historical figures whose thinking you understand well. “What would X say about this?”

In the doing stage either teach what you’ve learned, or write something about it. Explainers are fine, so are argumentative pieces. Once you’ve finished, get feedback from your student and think about what you had trouble teaching, or put what you wrote aside, then read it a couple days later, ideally out loud. Ask yourself what you don’t understand yet, what doesn’t make sense, or what seems wrong.

Then read the next book or attend the next lecture or watch a practitioner performing. This recursion should be based on what you didn’t understand or problems you found or just what you’re curious to learn more about.

And then… think, and discuss, and do.

All thru this remember, you will only truly master what you love. This should be an enjoyable loop, even the frustration should encourage you as long as it comes with “I don’t get it, and I want to and I look forward to figuring it out.”

If you want to do particularly well, learn to express what you’ve learned fairly and strongly, BUT look for where it doesn’t work. Is there a place where the logic doesn’t flow, where it’s not coherent? Are there real world cases it would not predict or predict incorrectly? These anomalies tell you where to go next.

Don’t just look for where it doesn’t work, though, look for where it does. Few intellectual tools work in all circumstances. What’s it good for?

And as you learn, stack up models. “Neo-classical economics works for this, Marxism works for that. Keynesianism explains this well. Austrian economics….”

Then you wind up with a multi-faceted understanding and intellectual tools you know when and where to use, and and when not. That is very close to mastery.

This site is only viable due to reader donations. If you value it and can, please subscribe or donate.

Possible Site Down Time

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On December 3, 2025

In Administrative

One of the things I did with the money from last years fundraising drive is hire a Dev to fix the issues with the site, like it often being down and slow loading, and with the mailing list.

This may mean the site has some down time over the next week. It should be more than worth it to get the site operating reliably.

And my thanks to all donors and subscribers for making it possible to get this fixed. I’m OK at simple website tasks, but 16 years of uptime and a server move have left the site’s back-end in a snarl which needs a professional.

Update: OK, we’re looking at Wednesday next week or so. Going to migrate the server to somewhere more appropriate for my needs. Emails will take longer to fix, so if you’re an email subscriber you will NOT be receiving emails for a couple weeks. My apologies, but it WILL be sorted.

Britain To Restrict Jury Trials, Ending Jury Nullification For Political Crimes

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On December 2, 2025

In Britain

Without jury trials, there is no justice:

David Lammy, the justice secretary, told The Times that the scale of the backlog – which has reached nearly 80,000 cases – is failing victims as he warned that “justice delayed is justice denied”

Lammy is expected to announce that he will scrap the right to trial by jury in “either way” cases, where defendants have the choice to have their cases heard in the magistrates’ or crown court.

Last year there were an estimated 13,000 either way cases – including theft and handling stolen goods, burglary, assault causing actual bodily harm, fraud, dangerous driving and possession of drugs with intent to supply – went before juries. 

Or you could spend more money and hire more judges and judicial staff? As usual, the real reason for the backlog is that governments after government have made cuts to the justice system.

But I suggest connecting the dots. All those people being arrested for protesting Palestine, they won’t have the right to a jury trial either. Which means that juries can’t nullify the law by refusing to convict.


Oh yes, she’s a terrorist.

The war on terror, as an aside, has reached the point many of us predicted at its start: anything the government wants to say is terrorism, is terrorism. As a rule I oppose most strengtheners. A crime is not more of a crime if it is motivated by hate. We already have motivation based modifiers in law (the difference between manslaughter and murder is intent) and those are enough.

But terrorism is particularly egregious because the way we define it is completely arbitrary at this point: it’s just “whatever a government says is terrorism, is terrorism.” Even in the past it was bullshit, because “killing civilians to effect political change” is something governments do all the time, but don’t call terrorism. The biggest terrorist organization in the world right now isn’t Palestinian Action, it’s Israel. At least by any sane definition. But even there, who cares? The actual crime isn’t “terrorism”, it’s genocide and the penalty for that is either execution or life imprisonment.

The UK government is becoming one of the most authoritarian and repressive in the world. To end jury trials for a huge class of people because they can’t be bothered to tax rich people like themselves is the very definition of tyranny, especially in Britain, the very mother of the right to be tried by ones peers, not some appointed judge who will often rule exactly as those who appointed them want.

Pathetic.

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The Financialization Hoover Effect & The End Of The American Dream

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On December 1, 2025

In End of American Empire, The Twilight of Neoliberalism

The great problem with financialization is that produces higher returns than productive investments do. If you want to industrialize or stay industrialized, you will have lower profits than a financialized economy does. This leads to situations like the below:

Generally US assets are highly valued and money tends to flow into the US over other countries. This is because US assets out-perform. The Chinese stock market, like the US market of the 50s and 60s, trades sideways. The US stock market since Greenspan never stops going up: crashes are just speed bumps. Likewise, US housing prices just keep going up, and so on.

On its face, money flooding into the US seems odd. After all, it’s not even close to the world’s most dynamic economy. China is ahead in 80% of technologies, the world’s largest manufacturer, and increasing its lead. In the last 3 years it has increased the numbers of cars it produces by five times, surpassing the US, Japan, South Korea and Germany, all of whom it was behind. It has the largest drone market, the most robots, etc, etc… It is the world’s strongest economy.

But China is a competitive market, and in competitive markets, profits are low, because the second they start to rise, someone new jumps in. That’s how capitalism, in theory, is supposed to work. The problem is that it only works that way with aggressive government regulation and enforcement. The CPC, being Socialist, doesn’t “believe” in markets. It uses them as a tool, without an ideological commitment. There’s no nonsense about markets being self-correcting, about rich people being good, about trickle down, etc, etc… If a market isn’t working to improve mass welfare, the state intervenes, and it will let, and sometimes force, “too big to fail” companies die.

This is, ironically, “real” capitalism, something the West no longer practices.

So America in specific, and the West in general has spent about 45 years now hollowing out its real economy. In exchange a great deal of money has been created, and if you as an investor want money, then you invested in the West.

This is coming to an end. It is in its last five or so years. It relies in the destruction of the real economy by jacking up prices, loading up debt and liquidating industries, often, ironically, to send to China. Once the real economy is gone, there will not be enough financialization opportunities to allow vast inflows of foreign money. This is especially true because, increasingly, US consumers are tapped out. The decision to end large classes of Obamacare subsidies is just a nail in this coffin.

Right now the US economy is bifurcated. Most people are under huge financial stress, but about 20% of the population is doing well and spending more. They are attached to a financialization spigot of some sort. This will end, or rather contract to about 5% of the population over the next decade. As financialization opportunities go away, the number of people benefiting from remaining financialization will of necessity contract. This contraction has been going on for decades. At one point a majority of people benefited, but as time went by more and more had to be sacrificed and the losers soon outnumbered the winners. The 2008 crash was when this became impossible to deny without straight up lying.

What will be left is a sclerotic economy, with a lot of rich people (relatively, in absolute numbers, not so many), a lot of poor people and a small real middle class. (And to be in that middle class you will need to earn low six figures minimum, because financialization makes everything expensive. You’re better off living in China with half the salary of an America. Maybe a third.)

It’s weird being, well, me. Because this is the endgame. I’ve been writing about this for decades, and now I’m seeing my Cassandric prophecies all coming true. None of this was, in one sense, necessary: up till about 2010, it could have been reversed, in theory, by correct policy. In another sense it was inevitable, because the people who make all the decisions were all in, and benefiting immensely, and were unable or unwilling to understand or care about long term consequences. For many of them that made cold hard sense. They were engaged in a “death bet”, they bet they’d be dead before the game ended. Others are just fine being the richest or most powerful people in a shitty country. They don’t, yet, understand what they’ll lose when China is recognized by everyone as the most important and powerful country in the world, or what the decay of American military ability (entirely a product of a now lost industrial and tech lead) will mean to them.

This the middle of the end. The beginning of the end was when Obama and Bernanke decided to bail everyone rich out during the financial crisis, and pass the cost to ordinary people, including by stealing their houses.

This is also epochal. For the first time in centuries, the West will no longer be the most powerful or the most technologically advanced region.

The consequences, for everyone in the world, will be vast.

 

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Week-end Wrap – Political Economy – November 30, 2025

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On November 30, 2025

In Uncategorized

Week-end Wrap – Political Economy – November 30, 2025

by Tony Wikrent

Trump not violating any law

‘He who saves his Country does not violate any Law’

Trump Stuns By Saying ‘I Don’t Know’ When Asked Directly NBC’s Kristen Welker ‘Don’t You Need to Uphold the Constitution?’

Joe DePaolo, May 4th, 2025 [mediaite.com]

Legal Experts Accuse Hegseth of ‘War Crimes, Murder, or Both’ After New Reporting on Boat Strike Order

Julia Conley, Nov 30, 2025 [CommonDreams]

The Moment to Pick a Side Has Come [Civil Discourse]

Joyce Vance, Nov 30, 2025

…on Black Friday, the Washington Post ran with an exclusive story about the September 2, 2025, attack on a boat allegedly carrying drugs in the Caribbean, the first of a series of attacks that have involved strikes on at least 23 boats to date. The Post reported that in advance of the strike, “Defense Secretary Pete Hegseth gave a spoken directive, according to two people with direct knowledge of the operation. ‘The order was to kill everybody.’”

That’s what the special operations commander overseeing the attack did. After the initial hit, live drone feed showed two survivors clinging to the wreckage. The commander “ordered a second strike to comply with Hegseth’s instructions … The two men were blown apart in the water.” The video Trump released later that day did not include the second strike.

The Post quoted Todd Huntley, a former military lawyer who had advised special operations on the illegality of the order: “Even if the U.S. were at war with the traffickers, an order to kill all the boat’s occupants if they were no longer able to fight ‘would in essence be an order to show no quarter, which would be a war crime.’” ….

There is a price to be paid for confirming a man as the Secretary of Defense who fails to understand the role he is being called upon to serve in, instead, relishing the title “Secretary of War.” Hegseth received a Bachelor of Arts in politics from Princeton in 2003 and a Master of Public Policy from Harvard’s Kennedy School of Government in 2013. He joined the Army National Guard as an infantry officer afterward. Nowhere along the road does he seem to have learned the fundamental lessons any Secretary of Defense should have known: The lesson of the Peleus trial.

In 1944, the captain of the U-boat U-852 sank the Greek steamer Peleus in the South Atlantic. There were 12 survivors, including an officer, who was given assurances they would be rescued the following day by Allied forces. But the U-852’s Kapitänleutnant Heinz Eck suddenly ordered his crew to fire on the 12 survivors and attack them with grenades when machine gun fire didn’t suffice to sink their life rafts.

Eck and four others were subsequently charged with war crimes. The charges were in connection with “the act of firing at the survivors and not the original sinking of the ship.” Eck argued “operational necessity,” claiming the survivors could have rallied and attacked the submarine. But all of the men were convicted.

It’s clear that even in wartime, an attack like the one on September 2 is a crime. If we are not at war—an issue the experts are now hotly debating and that we will track with Ryan Goodman in the morning—it’s quite simply murder….

A CIA trained killer who Trump granted asylum to killed a National Guard member — We need answers!

Dean Obeidallah, Nov 28, 2025

Disappeared to a Foreign Prison

Sarah Stillman, November 24, 2025 [The New Yorker]

…Just months earlier, one of these men had a job with UPS in Chicago. Another had lived in Houston, where he worked for his mother’s catering business, composed R. & B. music, and babysat his little brothers. Some had lived in the U.S. from an early age. Jim, a political refugee, had come to Miami from Liberia in the early nineties, when he was twenty-three, after his parents were murdered for their tribal and political affiliations during the country’s civil war. Others, including a twenty-one-year-old woman who had fled Togo fearing genital mutilation, had arrived in the U.S. recently, seeking asylum.

All of them had been taken from the United States against their will. Nearly all had been granted forms of legal relief that bar the government from deporting them to their home countries. At the heart of the protections they’d received was one of the most basic and sacrosanct concepts in both U.S. and international law: non-refoulement. This principle means that no nation should intentionally deport or expel people to a place where they are likely to face torture, persecution, death, or other grave harms….

Mica Rosenberg, Mario Ariza, McKenzie Funk, Jeff Ernsthausen and Gabriel Sandoval, November 24, 2025 [propublica.org]

Under a zero tolerance policy, the first Trump administration separated immigrant children from their families at the U.S.-Mexico border. New data suggests separations are happening all over the country, often after little more than a traffic stop.

What Pam Bondi and Lindsey Halligan did was not incompetence–It was intentional misconduct. They both must be disbarred.

Dean Obeidallah, Nov 25, 2025

The Feds Want to Make It Illegal to Even Possess an Anarchist Zine 

Seth Stern, November 23 2025 [The Intercept]

Federal prosecutors have filed a new indictment in response to a July 4 noise demonstration outside the Prairieland ICE detention facility in Alvarado, Texas, during which a police officer was shot.

There are numerous problems with the indictment, but perhaps the most glaring is its inclusion of charges against a Dallas artist who wasn’t even at the protest. Daniel “Des” Sanchez is accused of transporting a box that contained “Antifa materials” after the incident, supposedly to conceal evidence against his wife, Maricela Rueda, who was there.

But the boxed materials aren’t Molotov cocktails, pipe bombs, or whatever MAGA officials claim “Antifa” uses to wage its imaginary war on America. As prosecutors laid out in the July criminal complaint that led to the indictment, they were zines and pamphlets. Some contain controversial ideas — one was titled “Insurrectionary Anarchy” — but they’re fully constitutionally protected free speech. The case demonstrates the administration’s intensifying efforts to criminalize left-wing activists after Donald Trump announced in September that he was designating “Antifa” as a “major terrorist organization” — a legal designation that doesn’t exist for domestic groups — following the killing of Charlie Kirk….

U.S. Military Documents Indicate Plans to Keep Troops in Caribbean Through 2028

Sam Biddle, Nick Turse, November 25 2025 [The Intercept]

Strategic Political Economy

The UK is cursed: how finance destroyed our economy [applies to USA also]

Richard Murphy, November 28, 2025 [Funding the Future]

For more than 45 years, the UK has suffered not one, but two economic curses: the resource curse and the finance curse. Both were chosen, primarily by Margaret Thatcher, and both inflated the pound, destroyed industry, and left Britain dependent on hot money and speculation. In this video, I explain how we got here — and what we must do to rebuild a real economy based on work, fair reward and democracy.

The hypocrisy of bankers needs to come to an end

Richard Murphy, November 27, 2025 [Funding the Future]

Democratic Public Finance: A Radical Vision for Mamdani’s New York City

[moneyontheleft.org, via Public Banking Institute, Nov 26, 2025]

Public Banking Institute email:

“Democratic Public Finance: A Radical Vision for Mamdani’s New York City” is a must-read for anyone who believes that our cities can—and should—be financially empowered to serve their people, not Wall Street. The essay reframes how we think about money itself, arguing that it should be treated not as a scarce private commodity but as a public tool for collective prosperity. By redefining money as “public credit,” this vision breaks from the austerity-driven mindset that has long stifled local progress and instead positions finance as a democratic force for housing, jobs, and sustainability.

At the heart of this vision is the call for public banking and civic payments infrastructure that would allow New Yorkers to access fair, transparent financial services—free from the extractive practices of private banks. A municipal public bank and “Public Venmo” system would ensure that credit flows directly into community priorities such as affordable housing, small business growth, and green energy, rather than into speculative markets. This isn’t just economic reform—it’s about returning power to the people and ensuring that city wealth circulates locally.

 

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Open Thread

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On November 29, 2025

In Uncategorized

Use to discuss topics unrelated to recent posts.

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