Ian Welsh

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

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Trump Takes Share Of US Company Profits & Pentagon Guarantees Rare Earth Prices

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On August 25, 2025

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The US government is to take a 15% cut of Nvidia and AMD chip sale profits to China. There are also discussion of taking a 10% stock share in Intel.

Meanwhile the Pentagon has taken a hundred million dollar stake in a rare earth miner, and guaranteed minimum prices.

As Albert Pinto notes, this isn’t neoliberalism. Neoliberalism is dying, if not dead, in the US, though the Euros are clinging to it. Everyone’s noticed that China’s hybrid model absolutely trounced the West, and, hey, it’s a chance to get even richer. Pinto thinks that Trump is trying to change the nature of the oligarchy:

8/ Winters’ model of oligarchy:

1 Warring: armed oligarchs defend property claims separately

2 Ruling: oligarchs institutionalise defence

3 Sultanistic: 1 oligarch monopolises armed wealth and defence

4 Civil: state defends property regime Trump: US from 4->3?

Now I don’t think America’s oligarchy going to go Sultanistic, in the sense of one ruling oligarch. The only way that happens is if Trump manages to turn the Presidency into a Trump family matter, and that seems unlikely. But a rotating sultantic Presidency until, perhaps, someone manages to make it permanent: that’s possible.

But the days of laissez-faire are clearly over. Now this isn’t entirely stupid, I’ve been calling for what Trump did for rare earths for twenty years. It’s the obvious thing to do. Likewise, ensuring stable domestic production of necessary resources is sane and necessary and if one has to pay a little bit more, so be it.

Owning shares in US companies isn’t necessarily a bad thing. The truth is that every fundamental innovation which made the internet and smart phones possible was government funded. Tesla doesn’t exist without a massive government loan back when it was nothing. But the government doesn’t share in the upside nearly as much as it should, because large corporations pay almost no taxes. The government takes the risks (Solyndra was given about the same amount of money as Tesla at the same time, and went bankrupt) but doesn’t share in the upside. Tesla just paid back the loan, but if the US had an equity share, it’d have made out very well.

Golden shares, a 10% ownership in large or important firms used to be quite common. It’s not a new policy, but it used to be associated with the left wing. What’s going on now is a right wing version of the same thing.

The President is the strong man who runs the government. Everything private companies do they do because he allows it, therefore government has a right to a share of the profits and to exercise control when it chooses to. The President picks winners and losers, determines the effect of court decisions, and so on.

It’s the logical extension of the tendency to Imperial Presidency. Every other power in society is weakened, the President is above all. An elected dictator, as it were. (Similar to parliamentary democracies in that sense, but very un-American and without the protections of Westminister government, where new parties are possible and governments can fall easily.)

Right now the scramble is to see which faction will control the Presidency after Trump. The best bet is probably the tech-bro faction, since Vance is Peter Thiel, the Palantir surveillance state magnate’s creature. (Though puppets have a tendency to cut their strings when they attain supreme power.)

All of this entails a vast misunderstanding of how the Chinese public/private system works, by the way. For one, China probably has the most competitive (free) markets in the world in those sectors which are private. For another, the system is not run to maximize profit, but to produce certain social and policy outcomes, including a good life for the majority of the population. China has both deliberately reduced housing and rent prices, crashing the housing market and costing owners a huge amount of money, and it has been deliberately reducing the number of billionaires.

These aren’t incidental matters, and just saying “well, we’ll move to a mixed model” misses what makes China’s economy work so well.

But no society run by a financial oligarchy is capable of understanding that “more profit” isn’t the way to win economically, so America will continue to learn the wrong lessons from China. As for Europe, they aren’t even learning the wrong lessons, they’re just doubling down on austerity and increasing military spending in a way which will make some Americans rich and hardly help them at all. Not even in the game.

More on all this later.

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Yeah, America’s Gone Fascist

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On August 25, 2025

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I think we can put a peg in this. For years everyone’s being “we’re going fascist.”

It’s done. It’s over. The US has gone fascist.

  • Purges of the military, intelligence and law enforcement agencies to install personal loyalists;
  • Troops in the capital, armed, with law enforcement rights, and a promise to do the same in other cities;
  • Vast personal corruption by the man at the top, including blackmailing companies into personal bribes;
  • Masked men who often don’t show badges or warrants roaming the lands, forcing people to prove their citizenship (and often ignoring proof) and seizing people and throwing them into unmarked vans;
  • Full executive immunity;
  • A supreme court which has or appears poised to legalize all of the above; and,
  • Threatening ABC and NBCs broadcast licenses.
  • Yada, yada (add your examples in comments)

There isn’t much point in dancing around this. Perhaps there’s a technical case that this isn’t fascism, but some other form of nasty right wing government ideology, but whatever it is, the constitution and the important pieces of the constitution and bill of rights are dead or dying, including habeas corpus, the principle that no one’s above the law, the idea that troops shouldn’t be used domestically, etc, etc.

This has been coming for a loooonnnnngggg time, and plenty of people have warned about it. The fascism experts from Harvard who fled the country, much as many sneered at them, weren’t wrong in their diagnosis. Remember, a lot of people who left it too late to flee Germany (or Pinochet’s Chile, or your choice of example) got a permanent plot of land, a long government paid for stay in a small room or in Argentina a helicopter trip ending with a spectacular fall

(Pinochet is notable for training dogs to rape the wives of his opponents. Hopefully Trump won’t sink quite that low.)

I would suggest that the UK is almost there, and so is Germany. The EU as a whole, with its growing habit of just making protest and unwelcome parties illegal is trending hard. (Or, if you’re lucky, they’ll just make you a non-person, making it illegal for any bank or credit company to do business with you, or anyone to give you money.)

I don’t expect to spend a lot of time on this, though I’ll keep covering it. It’s been coming for a long time, it’s not a surprise and in some ways it’s not news. But a lot of people with suffer as a result.

For those who say “but Kamala” I note only that to win she had to either:

  1. Not say that she wouldn’t have done anything different than Biden; or,
  2. Come out against genocide.

Apparently supporting genocide was a red line for her, and fascism in the US a secondary issue. Neoliberals will always choose fascism over anything remotely left wing, including the left wing value of opposing a new Holocaust.

This is where we are.

 

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Open Thread

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On August 23, 2025

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Use to discuss topics unrelated to recent posts.

What Is Society For & What Makes A Society Good? (Laws of Heaven)

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On August 22, 2025

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Before I give my answers, I’d appreciate if you, the reader, would consider these three questions yourself. In the West:

  1. What is society for? What is it set up to do?
  2. What should society be for?
  3. What makes a society or group good?

Some years ago I considered the issue of who is let in to Heaven.

Good people, only.

That seemed pretty awful to me. No one wants to go to a hell and I don’t want even bad people to suffer.

But then I asked myself the question, “what makes a society or group good?” I thought back on my own experiences and I came to a simple conclusion: it’s always the people which make a group, of any size, good or bad.

Bad people. Bad group. It is really that simple. Leaders have an outsize influence, but leaders require buy-in from society, at least from the coercive elements and often from much more than that. (See my politics series for more on that.)

People who are cruel, power-hungry, greed, selfish or otherwise have nasty vices or personalities make a group hell. People who are kind, generous, humble and so on make a group good.

Again, it’s that simple.

So the conclusion I came to is that if heavens exist, they don’t let in bad people (or very few) because if they did, they soon wouldn’t be heavens. Bad people go to places with other bad people, and that’s what makes such places hell.

Now let’s move back to the first of our questions. What are our Western societies for. I think it’s close to inarguable that under neoliberal ideology, they exist to make sure that those with power and money retain their power and money and increase it. That premise predicts almost all the actions our societies have taken since around 1979 or so.

If you’re rich and powerful, you run the society and you run it for your own good.

This brings us to our second question. What should a society be for? This is a prescriptive question, there is no “correct” answer. The Pharoah, or Barack Obama or Elon Musk are going to give different questions than you or I, odds are (their true answer, not the one they tell suckers) and so is the Pope, let alone Torquemada. Mennonites have their answer, and so on.

My answer is a simple one. A society, or any group, should make its members happy, good, and if they are happy and good, it should make them strong. It should do that, as much as is possible, for as many of its members as possible and any society which doesn’t is a bad society.

Certainly it is impossible to create a lasting good society if the primary virtues of the society are greed and selfishness, as they generally are under capitalism and as they specifically are under neoliberalism. (New Deal capitalism did not exalt greed and selfishness.)

This is the start of a new series, “The Laws of Heaven”, where we’ll discuss the laws, principles and methods of creating good societies and groups. There is no current possibility of these principles being followed, but knowing what they are is important and opens up the possibility of a better future.

I hope you’ll join me in this exploration.

 

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China is a Rich Society. No Western Country Is.

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On August 20, 2025

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Chinese and American flags flying together

Saw this recently, from the University of Chicago:


The commentary is a bit of an exaggeration. But not too much.

Now if this was just one data point, it wouldn’t matter, but the bottom line is that funding for universities, including university research, in being massively cut in America and the UK, with issues in most Western countries. It’s not just about the humanities, science is getting hit hard, as is engineering.

As best I can tell, China has opened about 1,700 new universities and colleges in the past 25 years. Those that existed have expanded enrollment. It’s very reminiscent of the post war period in America. And the best of universities are excellent.

Americans are ostensibly rich, yes, but the society is not. A lot of the apparent wealth is false: if it costs one fifth as much to get dental or health care or one tenth as much to buy a good pair of earphones; if it costs one-third as much to buy an electric car, well, all of the extra cost in America goes to GDP, and Americans have higher incomes, but who’s actually richer?

And when you look at Chinese cities and provinces they are building infrastructure massively. The cities are beautifully lit up at night. There is a huge space program, even as the American space program is cut, and cut and cut. There are dozens of EV companies and in general there is competition in most of the cutting edge parts of the society. Coffee is cheaper (which is why Starbucks is getting shellacked in China). Everything is cheaper, there’s more of it and the government and private actors spend money on huge new projects, on research and on infrastructure.

China is a rich society, because they can do things. America’s last real gasp as a rich society was the Apollo program, ever since then, it’s been in retreat. Europe, well, Europe had a good time in the post war period, but since then, despite some success in the 90s and early 2000’s, it’s been in retreat and it has recently chosen the path of de-industrialization and xenophobic isolationism, which is not going to serve it. University cuts in the UK, in particular, have been savage, but Europe, even taken as a whole is behind China, the US, Japan and South Korea in research and technological advancement.

 

 

The Chinese have built massive high speed rail, lead in civilians drones, in robotics and are competitive in AI, which is 20x cheaper to run (more importantly, it uses FAR less energy than American AI, which draws more energy than entire countries.) They are ahead in most material sciences, catching up in civilian aviation (soon they will be ahead), have vastly more shipbuilding capacity, are ahead in missile technology, will soon eat SpaceX’s lunch  in launch costs (no, I will not be wrong about this.)

China does thing. The government is rich. Corporations are not spending all their money in stock buybacks and acquisitions, but are actually competing and trying to create new and better products than their competitors.

The best parallel is probably not post-war America, but pre-WWI America. China has taken the lead from America, there is zero chance of America catching up absent a large meteor hitting China, but they don’t actually spend much on their military. I was shocked to find out that the Chinese military has about 2.2 million soldiers out of a population of 1.4 billion. All of this with a sincere effort to provide a decent standard of living to everyone and a genuine attack on inequality. (Chinese inequality is very high, but it is concentrated in the top 10%, not the top .01%, which is being attacked by the government.)

China is a civilian society, with a civilian economy. It is in a vastly expansive phase, one which could last as much as sixty to eighty years, assuming environmental or international issues don’t derail it. (They will.)

China is where the future is. If you are younger, learn Mandarin. It will be as essential as English was for the past hundred and twenty years.

Hope for the future now rests in China. You may not like that, but it’s just a fact. They’re the country that can actually do things, and whether our problems are fixed, or mitigated (more likely) is up to them, just as for a long time it was up to the US (which failed almost completely, play “I see no evil, I hear no evil” every since 1980.

I don’t know if I for one welcome our Chinese overlords, but it doesn’t matter. They’re here. The West has already lost the race and is retreating into a poorer, more backwards second world situation, similar to the late USSR and Warsaw Pact.

It will end as well for the US and NATO as it did for the USSR and the Warsaw Pact.

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Trump’s Budget & The NATO 5% Of GDP Requirement Have The Same Effect

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On August 18, 2025

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Despite all the flakiness and back and forth Trump’s actions have a unified purpose. Like the Democrats, but even more so, they disproportionately benefit the rich. (We’ll leave aside the pandemic response, which is complicated and an emergency.)

This table is older, and based on the House version of Trump’s budget and tariffs, but should be substantially correct:

Tariffs effect the rich less, because they spend less of their income on goods. The biggest companies often get exceptions to the tariffs as well. Currently that includes Apple, Coca-Cola, Stellantis and GM.

We are also seeing signs of “Greedflation”, using the tariffs as an excuse to raise prices faster than costs. This was huge during the pandemic,and it will be huge this time. Overall the really reach will benefit from tariffs, not be hurt by them. Trump talked a good game about making sure companies wouldn’t use tariffs as an excuse to raise prices, but that’s all it was, talk. For tariffs to improve the lives of the working and middle class, they would have to translate into well paid jobs, and there is no effective mechanism for that in America.

Let us turn then to the “NATO nations must spend 5% of GDP on their military.” That’s a lot, and it means that either taxes must be raised (they won’t be except for consumption taxes on the poor) or other priorities must be slashed. So the poor and middle class in those countries will get it in the neck.

Now, if that 5% was spent on domestically produced weapons and on hiring more soldiers and support staff, at least it would get back into recirculation. Indeed, there’ll be some of it, but most countries have agreed to buy Americans weapons and equipment.

And who will that benefit the most? The American rich.

In some cases buying American is so foolish it boggles the mind. Canada’s only real active military threat is America, and American weapon systems these days are mostly online and can’t be used if America doesn’t want them to be, even leaving aside the possibility of simply bricking them with an update.

But in general, increased military spending was an opportunity for industrial policy and to cut the aprons to the US, and actual statesmen would smile at Trump, make the promises and use the 5% in ways that would benefit their own country. Instead most of the benefits will flow to America.

As for the idea that America is a reliable security partner, well, they couped Ukraine, built its army up massively, encouraged it not make peace when easy and favorable terms were offered and is now cutting a deal with Russia after extorting mineral concessions from Ukraine.

Never ally with America if there is any other option.

But the core point here is simply that the “does it make the rich even richer” metric, which works for American politicians as a group, is even more predictive of Trump. Oh sure, he’ll throw the hoi polloi some social policy red meat, and yes, some of the moderately rich are being hurt by his policies, but the real rich, they’ll mostly make out like bandits.

Until China eats their lunch, which they are and will.

Right now America’s policies appear to be “loot the satrapies and form a non-Chinese bloc which is smaller, weaker and poorer than the China bloc.”

Smells like the USSR to me, except the USSR started out very strong and with higher economic growth than the West. America is trying the strategy as its in terminal decline.

 

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Open Thread

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On August 16, 2025

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Use to discuss topics unrelated to recent posts.

Politicians V.S. Serial Killers: Introducing The Serial Killer Count

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On August 15, 2025

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One of the themes of this blog is that, with some exceptions, the people who are most dangerous are politicians. Since rich people own politicians, indirectly, they are included.

We’ve been, as a society, obsessed with serial killers for some time. They are seen, by many, as the ultimate evil. The average serial killer is responsible for about six deaths.

The Iraq war killed about half a million people (we don’t really know, since we didn’t count, but the post-fact estimates are credible.) That means George W. Bush, as the primary driver of the Iraq War, was the equivalent of over eighty-three thousand serial killers.

If we want to spread out the blame, US and UK politician who were for the war were the equivalent of over 83,000 serial killers.

The high end estimate of active serial killers in America is 2,000 active killers.

Recently I did a bit of research into the effect of Clinton’s “Welfare Reform” bill, in which he cut access to Welfare significantly. Interestingly, it’s really impossible to tell how many people the bill killed or made homeless (which is a delayed death sentence).

We don’t count.

But I’m guessing Bill’s serial killer number is pretty high. Let’s ignore how many Americans he killed. Iraq sanctions killed somewhere between 200K to a million people, with Madeleine Albright famously saying that if 500K children had been killed, it was worth it.

Even 200K suggests a serial killer count of over 33,000.

Obama’s policies deliberately helped banks steal (foreclose) American homes (steal is the correct terminology, they used documents with fake information and signatures.)  Once again, we don’t really know how many people had their homes taken, but 750K were included in a single class action suit, so that’s the lower bound estimate. I wonder how many of those became homeless or died as a result? Again, we don’t know, but it’s bound to be a lot of people. There’s no possibility that it doesn’t massively increase Obama’s “serial killer count.”

Yesterday we discussed prosecuting those who have enabled the Gaza genocide. Of course there’s plenty of blame to go around, but assuming a death count of half a million, which is going to be a low end estimate, we’ve got a serial killer count of over 83K.

Don’t worry about serial killers. They kill hardly anyone.

Politicians, at the behest of their owners, on the other hand, now they have bloody, bloody hands.

 

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