Month: December 2025 Page 2 of 4

Week-end Wrap – Political Economy – December 21, 2025

by Tony Wikrent

Strategic Political Economy

Harold Meyerson, December 03, 2025 [The American Prospect]

…As Emma Janssen has reported in these pages, marketers are going where the money is, like bank robber Willie Sutton. First-class and business-seat travel on the airlines is booming, so much so that seating arrangements on Delta and United are being reconfigured to create more room for the affluent, while coach seats are going unfilled and “discount” airlines struggle. Revenues are up 3 percent this year at the Ritz-Carltons, the Four Seasons, and other luxury hotels, yet down by 3 percent at economy hotels. And when it comes to life’s biggest purchase—a home—the median age of first-time buyers reached 40 this year, an all-time high according to the National Association of Realtors….

Life in the nonaffluent nation is getting harder. According to a Brookings Institution analysis from last year, 43 percent of American families don’t earn enough to pay for housing, food, health care, child care, and transportation; every week, they must juggle which to pay and which not to pay. Among Black and Latino families, those figures rise to 59 percent and 66 percent, respectively….

What would America look like if the gap between worker pay and productivity hadn’t opened? A RAND Corporation study from earlier this year found that the bottom 90 percent of wage earners received about 67 percent of all taxable income in 1975. In 2019, the last year for which this data was available, they received 46.8 percent. Had that bottom 90 percent continued during the past half-century to make the same share of the national income they’d had in 1975, RAND calculates that by 2023 they would have made an additional $79 trillion. Just in the year 2023, they would have made an additional $3.9 trillion. As the size of the bottom 90 percent of the U.S. workforce is roughly 140 million people, that means that the average earner would have made about $28,000 more in 2023 than they actually did.

Where have all those missing $28,000 paychecks gone? Well, our nation was home to 1,135 billionaires this year, whose aggregate net worth in 2024 came to a cozy $5.7 trillion. That’s $1.8 trillion more than what it would take to cut 140 million $28,000 paychecks.…

[TW: Meyerson then summarizes the responsibility of Ronald Reagan for this economic devastation, enumerates the specific policy changes Reagan implemented, and seven policy changes needed to reverse this descent and begin to rebuild the US economy and restore general widely shared prosperity.]

The Housing Crisis Is A Democracy Crisis

Evelyn Quartz, Dec 16, 2025 [The Lever]

…French philosopher Alexis de Tocqueville, among the young nation’s first chroniclers, came to believe that Americans’ propensity to form civic associations created the lasting bonds that were the country’s real defense against tyranny. Without communal ties and shared responsibilities, Tocqueville feared individuals would fall prey to paternalistic “soft despotism,” in which top-down state administration replaces self-government.

In such an arrangement, he wrote, “Each [citizen], living apart, is as a stranger to the fate of all the rest… he exists but in himself and for himself alone; and if his kindred still remain to him, he may be said at any rate to have lost his country.”

In 2025, both Jefferson’s and Tocqueville’s warnings could not be more relevant. An all-powerful corporate state has robbed ordinary citizens of the ability to put down roots. Without a stable, affordable place to live, civic associations, and the bulwark they provide against tyranny, wither away. The housing crisis is thus a democracy crisis….

America’s housing stock — once supported by strong public initiatives like the New Deal housing programs — was steadily financialized with the help of policymakers. Under the rhetoric of “individual choice” and the rise of neoliberal economics, public housing programs increasingly subsidized the private market.

The clearest example of this is the federal Section 8 voucher program, launched in 1974. The program required qualifying tenants to redeem affordable-housing vouchers in the private housing market. This allowed policymakers to back away from bold investments in public housing and hand responsibility instead to private actors.

In 2008, the neoliberal outsourcing of the housing market to Wall Street imploded the global financial system. As a result, millions of Americans lost their homes and were driven deeper into financial instability, as banks and private equity firms tightened their control over American life.

President Barack Obama inherited a collapsing economy, much as Roosevelt had seven decades prior. But instead of rescuing the common citizen — a mission central to Roosevelt’s response — Obama bailed out banking executives while offering struggling homeowners technocratic private-sector solutions like the Home Affordable Modification Program, which sought to modify loans rather than provide direct relief.

As a result, private equity giants subsequently cashed in on the financial crisis by buying up hundreds of thousands of foreclosed homes to rent out for profit.

Now, instead of helping more people become rooted in their communities, housing is dominated by rentier capitalism: a system in which homes are treated not as places to own, nor to participate in democratic life, but as financial assets. Today, a handful of consolidated private landlords dominate the rental market. The largest, Greystar Real Estate Partners, manages nearly a million rental units in the United States and was sued by the Federal Trade Commission earlier this year for allegedly burdening tenants with hidden junk fees…

A perfect distillation of the social uselessness of finance

Cory Doctorow, 18 Dec 2025 [Pluralistic]

How Capitalism Replaced America

[Murtaza Hussain, via Naked Capitalism 12-17-2025]

Why economic policy matters for the Greens

Richard Murphy, December 15, 2025 [Funding the Future]

… This results, first, in their inability to explain the role of money, tax, borrowing, and the whole fiscal management cycle that lies at the core of macroeconomics, and second, in their failure to confront how economic power is exercised in modern economies, which confrontation is inevitably required to deliver the green transition we need….

The green transition, on which I have campaigned for a long time, will not be delivered by good intentions, ethical markets, or better pricing signals alone. It will only be delivered when political movements are willing to challenge the power of finance and markets directly, together with the flawed ideas on which their supposed power is based. And that cannot be done without understanding the role of money creation and the state’s capacity to use it for public purposes.

The problem is not that the Greens care too little about economics. It is that too many of them might accept an economic framing that treats markets as the ultimate arbiters of what is possible. Within that potential framing, government is cast as financially constrained, dependent on private capital, and permanently at risk of market punishment. As a result, green ambition could be trimmed to what markets will tolerate, not what climate science demands, and that is how radicalism is quietly neutralised, as I fear might be possible if those whom I am challenging get their way.

If you accept that the state must first persuade or appease financial markets before it can act, then the green transition is already compromised. Large-scale public investment becomes conditional. Industrial strategy becomes hesitant. Public ownership becomes politically “difficult”. And climate action is reduced to nudging private behaviour rather than reshaping the economy….

Markets do not lead transitions that undermine their own profitability. They resist them. That resistance can only be overcome by a state willing to act decisively: investing directly, owning strategically, regulating firmly, and accepting that public purpose must take precedence over private return. But that requires abandoning the idea that the state must ask permission from capital before it acts….

Open Thread

By Ian Welsh

On December 20, 2025

22 Comments

Use to discuss topics unrelated to recent posts.

We Don’t Have To Live In Hell

By Ian Welsh

On December 18, 2025

29 Comments

A friend of mine once used the metaphor of “The Lords of Hell” to describe most of the world. There are a few people with lots of money and power, a few billion people who live in constant fear of not having enough, and a billion or so who don’t have enough. There is more than sufficient food in the world to feed everyone, but people go hungry. The entire western world has more empty homes than it does homeless people, yet there are increasing numbers of homeless. It costs less to give everyone health care than it does to “optimize returns” yet sick people go without medicine and help, and the disabled at left to rot with the least possible care in many countries. (Britain has literally stopped paying for wheelchairs for many disabled.)

Over the years my writing has had many themes, but they all boil down to one Ur-Theme.

We don’t have to live in hell. It’s a choice.

We have other choices. There are ways to make the economy work for everyone, and ways that we, the human species, can live well without driving mass numbers of other species to extinction. Indeed, by destroying the environment and extincting other species, we damage the very ecosystem which, long term, makes our own prosperity and well-being possible.

The worst lie in the world is always some version of “there is no other option. This is as good as it can be.”

It has many variants. “Capitalism is the only thing that can work.” “Some people must be homeless and poor for the economy to work.” “We need that oil no matter how many species die.” “People will only work if they’re driven by fear.” “Rich people are job creators”. “Human nature means we’ll always be evil and mean.” “Everything has to be owned by someone because commons don’t work.” (They have worked for hundreds of years at a time.)

Many, many more.

They are all lies. As humans we have an angelic nature as well as a demonic one. One of the most useful books to read in this regard is “A Heaven Made In Hell.” The author studied how people act after great catastrophes. Strangely enough behaviour like looting occurs far less than people helping each other, coming together and fixing things. In fact, people who go through this often find it was heavenly: for once almost everyone is taking care of everyone. Trust and community flourish.

There is great joy in helping. Great joy in care. Great joy in not being scared all the time. The best economies are always full of optimism and hope and have a rising tide that lifts all boats. (Rising tides don’t lift all boats unless we make sure that no boats have holes in their hulls.)

China has, recently, proved this yet again, despite some significant flaws. (FDR proved it before, and he was not the first.) We can take care of each other. We can live without fear that one bad bounce means homelessness, misery and death.

It’s a choice. We have made other choices far too often, but we can choose to be happy, prosperous and realistically optimistic because we take care of each other.

And while my writing often seems negative, this is the hope that underpins my criticisms. There is no point in criticizing something if some law of nature means that it must be so. But there is, despite claims otherwise, no law of nature which says we have to be bastards to each other or to the species we share this world with.

And in that is a genuine hope.

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Revisiting The Ivy League “Super Conformer” Thesis

By Ian Welsh

On December 16, 2025

22 Comments

Back in 2021 I wrote

What the Ivies have tended towards for generations now are “super conformers” — straight As and spent all their time in adult run extra-curriculars. People who spent all their time doing what authority wants. But in the past, they did seek out a few of the very smartest, too.

But, with the triumphal fall of the USSR and the “End of History” the Ivies decided that the system no longer needed smart people and stopped looking for them, they wanted nothing but super-conformers. But every system needs some smart people who aren’t entirely conformist.

This was anecdotal but fit everything I was seeing. Now here’s another data point:

This tracks my interactions with Ivy League grads exactly. Some of the older ones are brilliant, but anyone younger than their later 40s is a drone. Perhaps an intelligent drone, but a drone nonetheless.

People who are super conformers can’t actually be good analysts or creatives, because they can’t think original thoughts or challenge consensus views. And if you can’t do that, you can’t do paradigm changing real things or say “uh, boss, what we’re doing won’t work.”

American elites didn’t want any non-conformists any more. They wanted smart yes-men. So they lost Russia and sold their military, technological and industrial lead to China. They got filthy rich in exchange, in dollars that in 20 years won’t buy anything that matters internationally, leaving them as the equivalent of rich Indians in 1990. Yeah, you have servants and gold toilets and a mansion, but you run a country that doesn’t actually matter, and outside your gilded circle your society is a garbage dump. (If you visited India in those years you know that’s barely a metaphor. It’s just a description.)

What I have seen over and over again thru my adult life is that being right against the consensus is a career killer. (It sure did nothing for my career, but I’ve seen it in plenty of cases so this isn’t just “Ian is a bitter failure!” Heh.) I remember a study looking at media pundits who got the Iraq war right: people in the system already—fired, laid off or never promoted again. Pundits who got it wrong, but with the consensus? Their careers did well, thanks.

Incentives like this are picked up on quickly. You want everyone to be wrong with the elite consensus? You’ll get it! (See Matt Yglesias and Ezra Klein for the centrist pundit versions.)

And this is just as true in most corporations. Look at all the morons jumping on the AI train. Spending trillions rather than just waiting and buying the tech once it’s clear which models work (and probably just using a Chinese open source model.)

Now, of course, this “be wrong with the crowd” incentive has always been most of the case in the sense that being wrong against the crowd would get you fired, and being wrong with the crowd wouldn’t usually hurt your career. But there was a time when the mavericks who were right against the crowd were rewarded and glorified, and that mattered.

Post collapse of the USSR and during the “End of History” era (Fukuyama is the poster boy for “got everything wrong but said what elites wanted to hear so was rewarded far beyond his merits”) elites didn’t want to hear anything but how everything they produced, including their shit, smelled like roses. There was no competition, so they didn’t have to be competent or care about results.

Or so they thought. Turns out that Russia wasn’t down permanently, just for a generation or two, and that China was real competition, but being smart they followed Deng’s prescription “Hide your strength, bide your time” and sucked up to American elites, whispering “send us your industry and we’ll make you rich and you won’t have to put up with uppity American workers and unions!”

American elites got what they wanted. The pure peace of being able to smash anyone who contradicted them, the joy of forcing workers to work for less and less and shut the fuck up about wanting to share in profits, vast wealth, plus two generations of courtiers who were entirely yes men, telling them how wonderful they were. “Oh no my lord, your shit smells like lilacs! Yes my lord, I’d love to lick it up, it tastes like bacon!”

China got what it wanted: the tech and industrial lead and the end of American hegemony.

No leader worth his salt doesn’t have a few people around him saying “you know, Jack, I don’t think this is a good idea.”

It’s been a long time since America had any leaders worth their salt.

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Higher US Profits Are WHY The US Can’t Compete (American won’t re-industrialize)

By Ian Welsh

On December 15, 2025

14 Comments

A couple weeks ago we discussed why money still flows into America: returns are higher.

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.

This is a good thing (sort of) if you’re rich and own a lot of assets in the US. It is a bad thing if you don’t, and you’re American. (Europe is similar, but in some ways better for ordinary people.)

American companies just aren’t competitive, because they are always seeking higher profits, which means higher prices, and they actively work to make sure there is no real competition inside the US. Everyone wants to be a monopoly or part of an oligopoly. They want a “moat”, something that means other companies can’t compete with them and government refuses to regulate price gouging.

That produces higher returns, but if you’re going up against a country which has actual competitive markets you’re screwed because they have lower prices and always will. This is the argument for tariffs, to keep American companies competitive in America against cheaper foreign goods. To re-industrialize it would have to be profitable, and it isn’t. The US market is increasingly only America and whatever allies can be convinced to tariff China (which many do, but will they continue to do so?)

Plus, even then, American companies won’t invest unless they can make profits higher than what Chinese companies would accept.

American companies are all financialized. They’re looking for unfair profits, they’re not actually competitive and worse, they don’t want to compete.

OTOH, a lot of Chinese companies are sharks. They compete savagely and they are willing to cut profits razor thin to gain market share.

Additionally the Chinese just move faster, and they have 90% of their own stack in China, while the US has less than 50%. America, ironically, needs China’s help if it wants to rapidly re-industrialize, it needs aggressive anti-trust enforcement, and it needs to change various laws to make financialization far more difficult.

Start with just outlawing PE. Get rid of stock buybacks. Stop pumping the stock market. Ruthlessly go after everyone deliberately raising real-estate, rent, food and other prices.

Slash, in general, all excess profits (like healthcare). Crash the cost structure. Free up consumer demand.

Everything’s being spent on AI, which is increasing energy costs for every other business in the country, and draining investment from anything actually productive. and the US cannot win the AI race, it’s impossible. At best it can get a draw and I doubt it’ll even get that. Chinese AI is open source and uses far less energy, plus the Chinese are building new energy like crazy.

To re-industrialize and compete with China is impossible for the time being. Not in theory, it’s possible theoretically, but it is impossible in practice.

Why? Because NO ONE in power or who can get into power wants to give up their outsized unfair financialized profits.

This is why it’s all Kabuki bullshit. China will keep pulling away. The US cannot compete, because the US refuses to compete. Its only effective policy is to loot its vassals, but that won’t save it.

To a large degree this is why I don’t bother with wonky analysis any more, except occasionally to show it’s pointless. The game is over. The US lost its last chance in 2009, everything since then has just been playing out a game the US cannot win because its elites will never allow the policies necessary to win.

The only way out is thru. The US economy will have to essentially collapse, this type of elite will have to be driven entirely out of power and replaced by industrial elites. Only IF and THEN will it be possible to re-industrialize. That is, best case, a decade in the future, and will start from an even worse position than now.

By then we’ll have even worse climate change and cascading environmental problems.

The next 40 years are going to be UGLY for most of the West.

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Week-end Wrap – Political Economy – December 14, 2025

By Tony Wikrent

On December 14, 2025

18 Comments

Week-end Wrap – Political Economy – December 14, 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]

White House Refuses to Rule Out Summary Executions of People on Its Secret Domestic Terrorist List

Nick Turse, December 12 2025 [The Intercept]

The Trump administration ignored questions about whether it would order the killings of those on its NSPM-7 list — even while answering our other queries.

Hegseth Ousted Head of US Southern Command Who Raised Concerns About Boat Strikes

[defenddemocracy.press, 12-07-2025]

FBI Making List of American “Extremists,” Leaked Memo Reveals

Ken Klippenstein, via Naked Capitalism 12-07-2025]

SCOOP: Trump Admin Is Preparing to Revoke Visas of Critics of Elon Musk’s Twitter

Prem Thakker and Asawin Suebsaeng, Dec 11, 2025 [Zeteo]

Trump officials are considering revoking the visas of former European Union Commissioner Thierry Breton and Imran Ahmed, of the Center for Countering Digital Hate.

USA: New Findings Reveal Human Rights Violations at Florida’s “Alligator Alcatraz” and Krome Detention Centers

[Amnesty International, via Naked Capitalism 12-07-2025]

Senate Report Exposes Systematic Abuse of U.S. Citizens by ICE and CBP, Directly Contradicting Noem’s Denials

[Migrant Insider, via Naked Capitalism 12-10-2025]

The Data Doesn’t Lie: How ProPublica Reports the Truth in an Era of False Claims

Stephen Engelberg, December 6, 2025 [ProPublica]

Trump pardons major drug traffickers despite his anti-drug rhetoric

[Washington Post, Dec 8, 2025]

The president has granted clemency to about 100 people accused of drug-related crimes during his time in office, a Post analysis shows.

Trump’s Pardon Racket

Stephen Holmes, Dec 9, 2025 [project-syndicate.org]

The pardon power is the only authority the US Constitution places entirely in the president’s hands, immune from legislative override or judicial review. For Alexander Hamilton, who assumed that shame would restrain abuse, Donald Trump is the nightmare scenario….

Hamilton was wrong. He did not anticipate a shameless president.

Hamilton’s case for the pardon was political, not moral. He barely mentioned mercy. The power’s core purpose was emergency peace-making: “in seasons of insurrection or rebellion, there are often critical moments, when a welltimed offer of pardon to the insurgents or rebels may restore the tranquillity of the commonwealth.” ….

Trump’s Ethnonational Security Strategy

Michael Burleigh, Richard Haass, Stephen Holmes, and Zaki Laïdi, Dec 9, 2025 [project-syndicate.org]

The United States’ new National Security Strategy is a tissue of populist ideology that reflects no understanding of the real challenges facing the country and views the main threat as liberal democracy itself. The result will be bad for most Americans and their European allies, but highly beneficial for financiers, tech billionaires, racists, and authoritarian powers, especially Russia and China.

Nordics, Not “Shithole Countries” — How American eugenics shaped U.S. immigration policy for decades, inspired Hitler, and paved the way for Trump, Musk and Miller.

Jim Stewartson, Dec 10, 2025 [MindWar]

Man Charged for Wiping Phone Before CBP Could Search It

[404 Media, via Naked Capitalism 12-10-2025]

How Donald Trump Jr’s Fortune Jumped Six-Fold In A Year

[Forbes, via Naked Capitalism 12-11-2025]

Eric Trump Has Gotten 10 Times Richer Since Dad’s Election

[Forbes, via Naked Capitalism 12-11-2025]

Open Thread

By Ian Welsh

On December 13, 2025

15 Comments

Use to discuss topics unrelated to recent posts.

The Rules Of Good Easy Writing

By Ian Welsh

On December 12, 2025

8 Comments

Every writer I’ve ever talked to knows that the best writing is the easiest. You get in the flow and the words spill out. You can barely keep up, and it feels like transcription. It’s a great feeling, too, one of the best in the world.

This is why there were and are so many alcoholic and drug using writers. We all know that the best writing comes when you turn off the filters; when you don’t give a damn and just write. Any anxiety kills the flow and destroys one’s best writing. (Please don’t take this as a suggestion to down a fifth of gin before writing. It’ll destroy you in the not very long run.)

Over the years I’ve read dozens of books on writing. Almost all of them were about craft: how to outline, the elements of style, grammar, story structure, etc, etc… At one point I used to teach essay writing. Only two of those books were about the psychology of writing. The first, which I read years ago, was “The War of Art” by Pressfield. To oversimplify, his advice is to push thru the resistance. It’s a popular book and its helped a lot of people, I think, but it didn’t work for me. If I’m pushing thru resistance, I’m not writing well and I’m not enjoying myself. Defeats the whole damn point.

The second was “Fearless Writing” by William Kenower. Kenower’s take on writing is the same as mine: you want to be in the flow. His approach to resistance is that if you’re feeling it, you know something’s off and your job is to find the effortless flow.

Now if you’re a long time reader you may be thinking “wait, you’ve written thousand of articles. Sometimes multiple articles a day. You have trouble writing?”

Mostly, actually, I don’t have trouble: not in writing writing essays. I know that even my bad essays are “OK”, I don’t fear the audience reaction and I know what I’m trying to communicate (“we don’t have to live in Hell. There are other options.”) But when I write fiction or longer non fiction, oh yes, resistance is there, so much so that I often don’t write.

This mostly comes down to fear of some sort. Kenower has 6 rules for getting into the flow in writing (they’re also, with slight alteration, great for things other than writing.)

I must have a willingness to be surprised.
I must trust where the flow takes me.
I cannot worry about the past or the future.
I must exert no effort, the correct path is always the effortless path.
There is no right or wrong in the flow. There is only what belongs in the story and what doesn’t.
I must not care what anyone else thinks about what I’ve written.

The moment you start wondering what other people will think of what you’re writing, while you’re writing, you will drop out of the flow.

The moment you start wondering “is this good?” you will drop out of the flow.

The moment you wonder “will an agent be interested” you’re out of the flow.

The moment you start second guessing what you’re transcribing while in the flow, you’re sunk. (You do pay attention to resistance. If a word feels wrong, it is wrong. But if your thought is “this is bad” which quickly cascades into “I am bad”, you’re toast.)

The secret of writing that all writers know (and I bet it’s the same for artists and whatever art they practice) is that when you’re in the groove nothing feels better. It’s amazing. This is what drives writers back to the desk, even writers who find nine out of ten sessions miserable: the memories of that one great session.

I think of all the rules the most important is to not care what other people think. It’s OK to think of who you’re writing for, and what you’re giving to them with your story, but not to wonder if they’ll like it or think it’s good. The truth, in my experience, and I have ludicrous amounts of experience with feedback, is that some people will love it and some people will hate it. You may write what you believe is the best piece in your entire career and someone will comment “I don’t get it” and another person will write, essentially, “this is bullshit, and you’re stupid.”

You can’t let that influence you while you’re writing or get to you after you’ve written. If you do, it will destroy your ability to get in the flow, to actually write well, and to enjoy writing, which, after all, is why you write. (Even writers who brag they write just for money are usually full of it. Heinlein said anyone who wrote for any reason but for money was a fool, but he once wrote an entire novel in under a month because he was so inspired. Bullshit that he wrote just for the money.)

If you enjoy writing (sometimes), and you’re having trouble because it often seems so hard to write, you might want to read Kenower’s book. I can’t guarantee it will help, but it’s certainly the book on the psychology of writing which was most helpful to me.

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